Meek and Anson
[2016] FCCA 2502
•29 September 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MEEK & ANSON | [2016] FCCA 2502 |
| Catchwords: FAMILY LAW – Property settlement – five year marriage – no children –greater contributions by the husband – financial resources held by the husband overseas –adverse impact of marriage on income and income earning capacity of the wife. |
| Legislation: Family Law Act 1975, ss.75, 79, 90 |
| Lee & Hutton [2013] FamCA 745 Kennon v Kennon (1997) FLC 92-757 |
| Applicant: | MS MEEK |
| Respondent: | MR ANSON |
| File Number: | CAC 680 of 2014 |
| Judgment of: | Judge Hughes |
| Hearing dates: | 26, 27 & 28 October 2015 |
| Date of Last Submission: | 28 October 2015 |
| Delivered at: | Canberra |
| Delivered on: | 29 September 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr O’Shannessy |
| Solicitors for the Applicant: | Robinson McGuinness |
| Counsel for the Respondent: | Mr Givney |
| Solicitors for the Respondent: | Walsh & Blair |
ORDERS
Within 60 days of the date of these orders the husband shall pay to the wife the sum of $691,200 (“the payment”).
In the event of default in the payment, the husband shall forthwith sell the property known as (Property A) with the proceeds of sale to be allocated as follows:
(a)first, to pay any commission and other costs of sale;
(b)secondly, to discharge any mortgage or other encumbrances on the title to the property;
(c)thirdly, to make the payment to the wife along with interest calculated at the family law scale from the date the payment was due until it is made; and
(d)fourthly, the balance to the husband.
Except as provided by these orders, each party is hereby declared to be the sole owner of all items of property in their possession and choses in action in their name at the date of these orders.
Otherwise, all extant applications are hereby dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Meek & Anson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 680 of 2014
| MS MEEK |
Applicant
And
| MR ANSON |
Respondent
REASONS FOR JUDGMENT
These are property settlement proceedings after a five year marriage.
The parties were married on (omitted) 2008 and separated on 23 March 2013. It was the first marriage for both and they have no children together.
The husband made the overwhelming financial contributions to the property. The wife argued that her financial position has been significantly adversely affected by the marriage because she left a well-paid job in Sydney to live with the husband in (country omitted) and has been unable to obtain employment at a similar level since.
Background
The husband was born in (country omitted). He grew up on a family farm in (country omitted). He has an interest in five tracts of farming land in (country omitted) as well as shares and cash in bank accounts in (country omitted). He moved permanently to Australia in 1994 and became an Australian citizen in 2008.
The wife is an Australian citizen by birth.
The parties commenced a relationship in April 2004. At the time the wife was living in Canberra and the husband in Sydney. The wife moved to Sydney in January 2006 but lived separately. She regarded herself as being in a committed and exclusive relationship with the husband from late 2005. Although the husband had a different view of the nature of their relationship, in December 2006 he asked the wife to move with him to (country omitted) where he was due to take up employment with (company name omitted) as the (occupation omitted). The wife agreed to do so provided they were committed to marry. That was agreed and the parties began to plan their life together.
The husband moved to (country omitted) in February 2007. The wife remained living and working in Sydney that year but travelled twice to (country omitted) and the husband returned to Australia three times. The parties planned to marry in (omitted) 2007. The wife gave notice to her employer in August 2007 and ceased working on 7 December 2007. For various reasons, including the parties’ respective work and travel commitments, the wedding was postponed until (omitted) 2008. After the wedding the wife moved to (country omitted) to live with the husband.
Before the husband moved to (country omitted) he bought a property at Property A, New South Wales, for $1,070,000. Stamp duty and legal expenses brought the total cost to $1,121,168. The settlement of the sale occurred in May 2007. To fund the purchase the husband borrowed $745,000 from (omitted) and paid the balance from his savings.
The husband’s evidence is that he has always kept his assets in Australia and the (country omitted) completely separate. Any income or interest earned on assets in the (country omitted) is banked there and any costs associated with those assets are paid from funds held in the (country omitted).
Until the wife resigned in December 2007 she was employed as (occupation omitted) for the (employer omitted). Her annual salary package including superannuation was $180,000. She also owned a small (business omitted), through which she planned to do work in the (omitted) industry while living in (country omitted). She had more difficulty obtaining work in (country omitted) than she anticipated. In about August 2009 she secured a contract with the (omitted) based (business omitted) but was unable to proceed with that employment because in September 2009 the husband was transferred by (employer omitted) on short notice to work in Melbourne. He left (country omitted) immediately and the wife remained in (country omitted) to pack up the apartment and ship the parties’ belongings back to Australia. At that time the wife had also been invited to nominate for a position as chair of the (organisation omitted) but did not pursue that course given the parties’ relocation to Australia.
Upon their return to Australia the parties rented an apartment (suburb omitted) in Melbourne. The wife assumed she would be able to easily find work at a senior level in the Australian (omitted) sector as she had left it less than two years earlier but, again, had great difficulty securing work. She obtained some part-time project work in 2010 and was paid a small sum for a series of articles published in the (publication omitted). She began to look for work in other fields and in October 2010 secured a part-time position with (organisation omitted) as the (occupation omitted). The full-time equivalent salary was $100,000 per annum. She was paid $60,000 plus superannuation for three days a week. In January 2012 the position increased to four days a week. The wife retained the position until the contract ended on 1 March 2013 which was close in time to the end of the parties’ relationship.
After their return to Australia in late 2009 the parties travelled from Melbourne to Property A almost every weekend, which involved a ten hour round trip. They mostly drove but sometimes travelled by train. They both worked on the farm over the weekend before returning to Melbourne.
The wife described the husband as having a serious anger management problem which resulted in him periodically “exploding” in a rage, being verbally abusive of her and, occasionally, physically abusive. I will return to these issues later.
In March 2011 the apartment in which the parties were living was sold and the parties rented another property in (omitted). The husband accused the wife being extravagant in her desire to rent a larger and more expensive apartment than they required. The wife said she took on board the husband’s concerns and rented a cheaper apartment than their previous one. She produced email correspondence between the parties to show that the decision was a joint one. The husband said there were oral conversations in which he insisted the rent not be beyond a certain level but which the wife did not heed. The husband refused to sign the lease and, after contributing to the bond and the first four weeks rent, contributed no more. Thereafter the wife paid the rent from her salary.
In June 2011 the husband resigned from his employment with (employer omitted). He went overseas from June until late October 2011 to explore some business options and to visit his family in the (country omitted). The wife continued to travel to the farm on weekends and oversaw its operations.
In November 2011 the husband moved permanently to Property A. The wife remained living in the (omitted) unit but travelled on most weekends to the farm. The husband also spent time with the wife in Melbourne. The parties agreed that the wife should keep her job in Melbourne as the husband’s employment situation was uncertain.
In January 2012 the wife’s employer agreed to allow her to trial an arrangement in which she worked from (town omitted). That was successful and in September 2012 her employer agreed to allow her to relocate permanently to (town omitted).
The wife rented a small house in (town omitted) to use as an office. This was a point of contention between the parties. The husband said the wife moved to (town omitted) rather than to the farm and he took that as a sign she no longer wished to live with him. The wife said she could not work from the farm because it had inadequate facilities and only intermittent mobile phone coverage. She said the advantage of the house in (town omitted), in addition to being able to be used by her as an office, was that it enabled her to store furniture and other possessions which had been in commercial storage since she left Sydney in 2008. She said there was insufficient space in the farmhouse for her furniture because it was full of the husband’s furniture and the parties were planning to renovate the farmhouse which would require the furniture to be stored elsewhere again. She said she kept her work clothes in the (town omitted) house but otherwise all her personal possessions were at the farm. The wife said she slept at the farm except for a total of five or six nights when she had an early flight to catch the next morning. She said the parties also occasionally stayed together in (town omitted) after attending a function in town. I accept her evidence.
In 2002 the husband had established a business called Company A. He remained an active principal of the business until 2007. In July 2011 he became chairman of a new start-up company, Company B. In December 2012 two of the directors of Company B bought out the other four directors including the husband and changed the name of the company. The husband was paid $125,000 for his interest. The terms of sale enabled the directors of Company A to rename it Company B. The husband then worked for Company B as a (occupations omitted). From 1 July 2014 he worked for (company omitted) as the (occupation omitted). He resigned from that position in June 2015. At the time of the trial in October 2015 he was not in paid employment apart from his (omitted) business.
The wife’s employment with (employer omitted) ended on 1 March 2013. The parties separated later that month and the wife moved to live with her mother in (town omitted) NSW because the husband gave her no financial support and, without an income, she could not afford to rent a property on her own. She lived off her savings and received Newstart payments from Centrelink from the end of May 2013. Until October 2013 she received an exemption from having to look for work on the basis that she was suffering anxiety and depression.
In December 2013 the wife withdrew $10,000 from her superannuation fund on hardship grounds. The net payment to her was $8,073. She also received a tax refund and borrowed $2,000 from each of her two brothers which she used for living expenses and legal fees.
The wife’s mother suffered a series of strokes in October 2013 and for the next four months the wife cared for her on an almost full-time basis. She received a carer’s allowance from Centrelink during that period.
In January 2014 the wife commenced part-time work for (employer omitted). Although her contract was due to end on 18 December 2014, at the time of the trial in October 2015 it was being extended on a month-to-month basis. At that time the wife was working three days per week for $65,550 per annum, inclusive of superannuation. The full-time equivalent salary is a little over $100,000 per annum.
On 22 December 2014 the husband was ordered to pay the wife the sum of $100,000 to be characterised at trial. Both parties agreed that this should be characterised as a partial property settlement.
The parties’ attempts to have a child
Both parties very much wanted to have children. In early 2007, before the husband moved to (country omitted), they began trying to conceive a child. At the time the wife was aged 43 and the husband 47. The wife became pregnant in (omitted) 2007 as a result of assisted fertility treatment but miscarried the pregnancy in (omitted) of that year. She said it was heartbreaking for both parties.
The parties attempted further assisted fertility treatment but did not conceive. The wife described an exhausting process of juggling her part-time paid employment and her work at the farm with travelling to Sydney for IVF treatment and, in preparation for that treatment, having blood tests in (town omitted). The parties considered the options of IVF using a donor egg and surrogacy but the husband was ambivalent about those options and would not commit to them. The wife said that throughout the marriage she felt the pressure of the husband’s unhappiness, which he verbalised, that she was unable to conceive. In the end this became the major factor in the husband’s commitment to the marriage.
In November 2012 the wife flew from (town omitted) to Melbourne for a work meeting. At the baggage carousel she received a text message from the husband which was as follows:
Hope you have a safe trip to Melbourne. Fyi – I am hoping to catch up with two friends in Sydney to discuss the possibility of having kids. I hope you understand my need to have kids and we can find a way to work through this together. Hopefully amicably and together.
The wife said she was so shocked when she read the message that she nearly collapsed. She was distraught and unable to work the following day.
At the time the parties separated in March 2013 the husband asked the wife if she would like to be godmother if he fathered a child with another woman. He said in his evidence he did this because he knew how important it was for the wife to have a child and thought she might like to be involved. The wife said this extraordinary request caused her to feel dumbfounded, grief stricken and traumatised.
One year after the separation of the parties, the husband had a child with his current partner.
Allegations of violence
The wife alleged the husband was verbally abusive to her during the relationship and was at times physically violent. She gave some examples in her affidavit filed on 19 May 2014 and deposed to further incidents in her affidavit filed on 1 October 2015, less than one month prior to the final hearing. In summary her evidence about the incidents was as follows:
a)In late 2007, during an argument in the car, the husband slammed on the brakes and swerved to a stop at the side of the highway. The wife grabbed her handbag and got out of the car. The husband drove off. He came back 20 minutes later to collect the wife who was walking along the highway. The husband took no major issue with the wife’s description of this incident.
b)In 2009 the husband yelled at the wife and spoke cruelly to her when she pressed him to see a doctor because he was unwell. He said “You’re just like all the other women I’ve been with (wife’s name omitted). No, you’re worse because you’re smart. I detest women like you.” The husband denied the allegation.
c)In July 2010 the husband hit the wife on the side of the face and her shoulder with his fur hat while she was driving the car. The husband said he threw the wife’s coat at her, not his hat. Later that evening the wife wrote to the husband’s parents to ask for their help in dealing with the husband’s behaviour.
d)In August 2010 the husband hit the windscreen when upset about something the wife said. The wife initially said he smashed the windscreen but later conceded that a more accurate description was that he cracked it. The husband said he believed the damage was caused from a pre-existing chip in the windscreen which developed into a crack when he hit it.
e)In January 2011 the husband yelled abuse at the wife when he disapproved of a decision she made about a load of grain. He said “Get out of here. You cost me money, that’s all you do, you’re a meddling fucking bitch”. The husband conceded he yelled at her but denied calling her a bitch.
f)In August 2012 the husband drove furiously with the wife in the car after an argument. He was driving her to the train station. He drove fast and applied the brakes heavily in the station car park bringing the car to a hard stop. The wife got out in a distressed state. She said she was too affected by the incident to go to work the following day. The husband said the incident did not happen.
g)In 2013 the husband refused to slow down when asked by the wife to do so while driving on a dirt road. The vehicle fish-tailed in loose gravel going around a bend and narrowly missed hitting another car. The husband said an incident of the sort occurred. He said the wife asked him to slow down and he suggested she drive next time. He said the car probably fish-tailed on the bend but he denied narrowly missing another car.
h)In March 2013, the night before the wife was to permanently leave the property, the parties dined at a restaurant. The husband said to the wife words to the effect of “You continuously disregard, diminish and dismiss my need to have a baby”. When the wife raised the issue of surrogacy the husband slammed his fist on the table and said words to the effect of “You just don’t get it do you?” He then stood up and left the restaurant. The husband agreed in cross-examination that this account of the incident was essentially correct. He said he “thumped, slapped or pushed the table back and walked away”. The wife said she was distressed and humiliated by his actions.
In addition to these incidents, the wife alleged there were about five occasions where the husband pushed her and pinned her against a wall. She gave few particulars other than that one of those occasions occurred in (country omitted) in November 2008 and the rest in Australia. The husband said in relation to the (country omitted) incident that an argument between the parties was escalating and he wanted to leave the apartment. He said the wife wanted to continue the argument and stood blocking the hallway. He said he pushed past her to get out of the apartment. He denied there were any other incidents in which he pushed her.
It is clear from the evidence that during the marriage the husband grew increasingly resentful about the wife not having a baby and not having paid employment. He also spoke in disparaging terms to her about “doing nothing” and being “a dead weight” on him financially.
The wife’s evidence about these matters was relied upon by her counsel to base a submission that the contributions made by the wife ought to be accorded greater weight due to the arduous circumstances in which they were made. He relied upon the principles in the case of Kennon v Kennon[1] to which I will return shortly.
[1] (1997) FLC 92-757
The wife’s mental health
The wife said that when the parties returned to Australia from (country omitted) in September 2009 she felt intensely the pressure of her own desire and that of the husband to have a baby and for her to find a well-paid job. Her lack of success in relation to both despite her best efforts and the husband’s poor treatment of her caused her to feel depressed. Her general practitioner referred her to a clinical psychologist, Dr R, who saw her for six sessions commencing in September 2010.
After separation the wife was twice referred by her general practitioner to a psychologist, Ms D, for treatment under a mental health plan. The first referral was on 27 August 2014 and the second on 14 September 2015. Ms D affirmed an affidavit on 1 October 2015 to which she annexed two reports, dated 6 October 2014 and 30 September 2015 respectively. Ms D also gave brief oral evidence in the trial on 27 October 2015 and was cross-examined.
Ms D said that during the wife’s first appointment with her in May 2014 she administered the Depression Anxiety Stress Scale (DASS) which indicated the wife was suffering severe levels of stress, moderate anxiety and severe levels of depression. Her scores on each scale increased slightly when the test was administered again on 6 October 2014. Ms D concluded on the basis of the testing and her clinical observations that the wife was suffering an adjustment disorder with depression. She said her condition was primarily attributable to the end of the marriage, the circumstances in which it occurred and the loss of her career. In her October 2014 report she said as follows:
The majority (> than %90) of Ms Meek’s condition and current mental health appears attributable to the end of the marriage which occurred in a way that disrespected and ignored her. This is compounded by the effect of her current mental health status on functioning effectively in her job and ability to pursue a position more consistent with her employment background. She presents as an honest and unassuming woman with consistent personal and social values and ethics respecting others, taking responsibility, being inclusive and honest.
Some of her current stress is also likely to be attributable to her mother’s variable health. [2]
[2] Report of Ms D 6 October 2014 at page 5
Under cross-examination Ms D was asked about the impact on the wife’s mental health of her caring responsibilities for her mother. She confirmed that the wife had expressed the view that her condition was partly attributable to the need to care for her ailing mother and a feeling that her siblings were not carrying a fair share of that burden. However Ms D reiterated that the major source of the wife’s difficulties was the breakdown of the marriage compounded by her poor employment situation.
Earlier in her first report Ms D more specifically addressed the issues concerning the loss of the wife’s career:
As she learns to adapt to her new life as a single woman again at 51, Ms Meek is especially distraught and concerned about her future given that she willingly relinquished a significant and influential career in order to marry and facilitate the career of her husband while building a life together. Given her age and the inability to work in a meaningful or recognised fulltime position since 2008 due to prioritising her husband’s relocations and career, she is despairing about the loss of both her career (having finally achieved a leading position as a woman in (omitted)) as well as her marriage. [3]
[3] Report of Ms D 6 October 2014 at page 1
In her second report Ms D opined that the wife was suffering from adjustment disorder with mixed anxiety and depression. She said she expected the wife to recover once the litigation is over but noted that the recovery may take longer given the loss of the wife’s career and the security associated with it and the marriage:
I would expect that when the court case has been finalised and she is able to focus on living without further threat to her future, she should recover. However, the loss of financial and relationship security has depleted her emotional resources and recovery may take longer than would typically be expected. [4]
[4] Report of Ms D 30 September 2015 at page 2
I accept the evidence of Ms D, none of which was undermined as a result of her cross-examination.
Credibility
The applicant was a credible witness. She gave her evidence in a careful and considered manner; she conceded reasonably; was frequently generous in her statements about the husband; and her answers were, in the main, responsive to the questions.
Counsel for the husband submitted the wife lacked credibility because of the lack of particulars in relation to the violent incidents upon which she ultimately sought to rely. I agree that if a party wishes to rely upon violent conduct to base a Kennon argument, full particulars of the alleged violence should be given early in the proceedings to allow the other party an adequate opportunity to answer them. That did not occur in this case. The wife said she did not provide many particulars in the beginning because she did not think she needed to and because it was very painful to go into detail about the incidents. She also said she was hoping that the parties would be able to resolve the matter without getting to a final hearing and therefore did not provide the detail until it became obvious that the matter needed to be heard. Although open to criticism, the wife’s presentation of the evidence about violence did not undermine her credibility.
The husband was also a reasonably credible witness. There were three aspects of his evidence relied upon by counsel for the wife to suggest he was dishonest. The first concerned the statements he made about his income in his affidavit and financial statement both filed on 16 July 2014. In his financial statement the husband declared he was working for Company B. He declared his total gross salary was $1,154 a week or $60,000 per annum which he pointed out was less than the wife’s income. The husband had, in fact, ceased working for Company B on 30 June 2014 and had commenced working with (company omitted) on 1 July 2014. His gross salary at (company omitted) was $3,073.44 per week or $160,000 per annum in round terms plus superannuation. The husband said he completed his financial statement as a snap shot of his circumstances at 30 June 2014 when he was still technically employed by Company B. He said he started work for (company omitted) on the basis of a handshake deal and no specific details about employment conditions including salary had been negotiated at that time. He said that remained an ongoing problem and he never actually signed an employment contract with (company omitted) which is why he left the Company in June 2015.
The husband began to receive salary payments from (company omitted) on 16 July 2014, the day he filed his financial statement. He conceded that the figures in his financial statement filed on 16 July 2014 were incorrect but maintained that he did not know what he would be receiving at the time he completed the document. The financial statement was therefore potentially quite misleading and he ought to have at least made a note at Part O to explain the situation. However, it is common ground that the husband made full financial disclosure to the wife about his employment with (company omitted), including his salary when he received it. The wife annexed a copy of his first pay advice for the period 15 July to 21 July 2014 to her affidavit filed on 3 December 2014. There was therefore no real prospect of the wife or the Court being misled about his circumstances.
The second credibility issue for the husband concerns the mortgage over Property A which was in two parts. In his financial statement filed on 16 July 2014 the husband declared the outstanding mortgages to be $450,580 and $124,420 respectively. However in December 2012 he had received almost $160,000 for the sale of his share of the former Company B and some severance pay which was deposited into the second mortgage account. That deposit put the loan account into credit at that time. The amount owing at 15 June 2014, one month before he swore his financial statement, was $5,444. He overstated the liability by almost $120,000. During cross-examination the husband conceded that was correct. He said that he looked at the mortgage statements when he was completing the form but “picked up” the wrong number.
The third credibility issue concerned the value of shares in (company name omitted) held by the husband and for which he was due to be paid out. The husband worked for (company name omitted) in (country omitted) and Australia from 2007 until 2011. He received $100,000 worth of shares when he signed his employment contract in February 2007. During his employment he accrued additional shares as part of the Company’s equity participation plan. The husband said in his affidavit filed on 19 October 2015 that the total amount owing to him was $214,161.77 comprised as follows:
a)$102,670.08 for the initial sign-on shares;
b)$ 95,756.41 for shares accrued during his employment; and
c)$ 15,735.28 representing the net dividend on the shares.
The husband said in his affidavit of 19 October 2015 that he had not yet arranged to receive the payment because he wanted to work out a way to minimise the tax which would be payable upon receipt. He said he was content for the whole amount to be taken into account for the purpose of these proceedings without an allowance for the unknown tax consequences. In his financial statement filed on 16 July 2014 the husband failed to declare any amount owing to him for the shares. In his affidavit filed on the same date he said he had received $100,000 worth of shares for signing on to work for the Company and that additional shares had accrued during his employment. He said at that stage there was an unresolved dispute about the number of shares owed to him. He said “My best guess is that the gross value ultimately payable on the participation plan shares will be less than $100,000”.[5] It was submitted by counsel for the wife that this evidence was misleading as it suggested the total amount he would receive was less than $100,000. I reject that. His evidence is clear that he already owned $100,000 worth of shares for signing on and had accrued further shares as part of the equity participation plan and for which he anticipated receiving less than $100,000. According to the figures above, that was accurate.
[5] The husband’s affidavit filed 16 July 2014 at paragraph 58
While the husband is open to criticism for the first two errors described above, they did not affect my assessment of his credibility generally.
The Law
Section 79(1) of the Family Law Act 1975 empowers the Court to make orders altering the property interests of the parties to a marriage but only if it is satisfied that in the circumstances of the case it is just and equitable to do so.[6] The first step in such a process is to identify the parties’ legal and equitable interests in property.
[6] S79(2)
The value of all of the property owned by the parties at the time of the trial is agreed. The husband’s (country omitted) real estate was valued by Mr S, a certified general appraiser in (country omitted). He valued the land in which the husband has an interest. His valuation came into evidence as exhibit H2. The parties agreed to adopt the exchange rate on the last day of trial, 26 October 2015, for the purpose of assessing the value of the property. That exchange rate was $1 = AUD $1.38863.
The figures in the Mr S valuation were adopted unchanged in the husband’s outline of case document filed on 26 October 2015. There is a variation between the figures in that valuation and the figures that counsel for the wife urged the Court to adopt in relation to one tract of land. Tract 1 as described in the valuation comprises 40 acres and has a value of $440,000. It is comprised of two separate parcels of land which the parties have referred to as Tract 1A and Tract 1B. The husband owns Tract 1A outright. It comprises 20 acres. He has an undivided one half interest in Tract 1B. The husband’s interest in the whole of Tract 1 therefore is three quarters of the whole which amounts to $330,000 or AUD$458,248. The wife’s counsel attributed a value of AUD$275,000 for Tract 1 in his summary of assets but that appears to be an error.
The husband asserted that his parents have a life interest in each of his (country omitted) properties but the only registered life interest is in relation to Tract 3 which was valued at $280,000. The husband holds a one third interest in that property making his share worth $93,333. Counsel for the wife conceded the life interest would reduce the current value of the property and contended a 50 percent reduction in value was appropriate. This would reduce the husband’s interest in that tract to $46,667 or AUD$64,803. In the absence of any evidence or submissions to the contrary, I will adopt that sum.
Tracts 2 and 4 have a value of $370,000 and $300,000 respectively which equate to AUD$513,793 and AUD$416,589.
The value of the Australian property in which the parties have interests was agreed as at the time of the trial.
The total property interests of the parties are set out in the following table:
HUSBAND’S AUSTRALIAN ASSETS
$
Property A
1,860,000
(bank A omitted) Account (omitted)
39,995
(bank B omitted) Acct (omitted)
85,957
(Company A)
23,854
(company omitted) shares 8675
78,075
Vehicles, Plant & Equipment
108,150
Cash owed to husband by (company name omitted)
278,409
Sub-total Husband’s Australian Assets
,
2,474,440
HUSBAND’S LIABILITIES
Mortgage Account (omitted)
105,444
Mortgage Account (omitted)
450,580
Sub-total Husband’s Liabilities
556,024
Husband’s net Australian Assets
1,918,416
WIFE’S ASSETS
Interim property settlement
100,000
Perpetual Share Fund
25,696
(car model omitted)
500
(business omitted)
745
Total Wife’s Assets
126,941
TOTAL COMBINED AUSTRALIAN ASSETS
2,045,357
SUPERANNUATION
Husband’s superannuation
223,468
Wife’s superannuation
205,480
Total Superannuation
428,948
HUSBAND’S (country omitted) ASSETS (in $AUD)
Tract 1
458,248
Tract 2
513,793
Tract 3
64,803
Tract 4
416,589
Checking account
86,656
Savings account
218,004
(omitted) account
2,925
Total Husband’s (country omitted) Assets
1,761,018
Both parties seek orders altering their interests in at least the Australian property. Although the husband owns most of the property, given the wife’s contributions to it and the sacrificing of her career to promote that of the husband, I am satisfied it would be just and equitable for such orders to be made.
The division of the property between the parties must be determined by reference to the following factors:
a)First, the contributions of the parties to the acquisition, conservation or improvement of the property and to the welfare of the family as provided in subsections 79(4)(a),(b) and (c) of the Family Law Act; and
b)Secondly, the matters set out in the remaining subsections of 79(4) which incorporate section 75(2) of the Act. Those matters broadly require a consideration of the financial position and resources of the parties; their age and state of health; their necessary commitments in supporting themselves or any other person; the duration of the marriage and the extent to which it has effected the earning capacity of either party; the effect of any proposed order on the earning capacity of either party and any other fact or circumstance which the justice of the case requires to be taken into account.
A significant matter in contention was whether the Court should adopt an “asset by asset” or “global” approach to an assessment of the division of the parties’ property. Counsel for the husband submitted that while all property interests of the parties had to be taken into account, the Court ought to effectively deal with the property division on a “two pool” basis separating the husband’s (country omitted) assets from his Australian interests. The only exception was the concession by the husband that the sum of $214,161.77 (AUD$278,409) owed to him by (company name omitted) for the shares and dividends he accumulated during his employment with the Company from 2007 to 2011 (which was also during the marriage) ought to be included in the “Australian pool” of assets.
I agree there is a principled basis for adopting a two pool approach in this case. The husband had all of his interests in land in the (country omitted) well before the commencement of the parties’ relationship, the wife made no direct or indirect contribution to them, the parties never had the joint use of them and there is no suggestion that either party intended that the wife would acquire any interest in them by virtue of the marriage. The property in the (country omitted) becomes relevant when considering the section 75(2) factors and I will take it into account at that stage but not in relation to assessing the respective contributions of the parties.
The husband’s counsel submitted that the superannuation interests of the parties should be disregarded as they were of similar value both at the beginning and end of the relationship. Counsel for the wife submitted that the superannuation ought to be included in assessing the value of the property, arguing it would be artificial to distinguish between the superannuation and non-superannuation interests.
I agree with counsel for the husband that the superannuation should be disregarded. It will make almost no difference to the outcome for the following reasons:
a)The value of the superannuation interests is a small portion of the value of the property interests.
b)The wife had $148,000 in superannuation at the commencement of the relationship and $205,480 at the time of the trial, an increase of $57,000 in value in round terms over the course of the relationship. However she withdrew $10,000 after separation so the true increase in value was $67,000.
c)The husband had superannuation funds of $143,405 at the commencement of the relationship and $223,468 at the end, an increase of $80,000 in round terms. This is $13,000 more than the increase in the wife’s superannuation.
d)Each party contributed indirectly to the increase in the superannuation interests of the other during the relationship.
e)Neither party sought a superannuation splitting order.
Contributions
Apart from superannuation, at the commencement of the relationship the wife had a share fund worth approximately $15,000, household furnishings and contents with an estimated value of between $10,000 and $20,000 and she was leasing a car. She terminated the lease on the car prior to the move to (country omitted) and bought a second-hand (car model omitted) which had a value of about $2,000 which she was driving at the time of the trial.
Besides his property interests in the (country omitted), at the commencement of the relationship the husband owned the property at Property A, farm equipment which he estimated had a value of $70,000, shares worth $213,630, his interest in Company A worth $311,131, savings of $3,000, a motorbike and household furnishings. [7]
[7] Affidavit of husband filed 19 October 2015 at paragraph 8
Apart from his Australian superannuation fund the husband had retirement funds in Company A and (company name omitted) of $47,834.[8]
[8] Affidavit of husband filed 19 October 2015 at paragraph 8
The parties maintained separate finances throughout the relationship. They did not operate a joint bank account and bought no property together.
The husband made the vast majority of financial contributions to the Australian assets. The major asset is Property A. The parties inspected the property together before its purchase. The husband offered the wife the opportunity to buy a share of it at the time but she was not in a financial position to do so. Nevertheless she made non-financial contributions to its acquisition and improvement. Before the husband signed the contract of sale he sought the wife’s advice as she had expertise in the area. She pointed out some inconsistencies in the contract and made suggestions about boundary surveys, Occupational Health & Safety issues and insurance.
The wife made modest financial contributions and significant non-financial contributions to the preservation and improvement of Property A. The previous owner remained living in the house on the property until February 2008. When he moved out the wife arranged for telephone, electricity and the Internet to be connected to the property. She cleared out rubbish and cleaned the house inside and out in preparation for occupation by the parties. The husband was in (country omitted) at the time.
The wife travelled to the farm to oversee its operations on a regular basis before and after the move to (country omitted) and made several trips back to Australia from (country omitted) for that purpose. From 2007 until the parties’ separation in 2013 the wife did all of the bookkeeping for the farm which included maintaining the accounts, setting up and maintaining an assets register, preparing quarterly BAS statements and preparing documents for the accountant.
The wife contributed her physical labour to a wide variety of work on the farm. She tended to the poultry, assisted the husband to plant trees and kept them watered, weeded, fertilised and mulched. She also developed a bushfire safety plan for the property.
The wife carried out the following tasks related to the cropping operations on the farm:
a)She researched varieties of grain;
b)She sometimes helped with preparing paddocks for planting such as burning stubble and clearing paddocks of branches and sticks;
c)She liaised with the share farmers and the harvester and ordered fertilizer and other chemicals;
d)She was present during planting and harvest when the husband could not be;
e)She made transport arrangements and helped load the grain into and out of silos; and
f)She was very involved in the marketing of the grain.
After the property was flooded in October 2010 and February 2011 the wife helped clean up the debris and carried out repairs. She also coordinated a volunteer team to assist with more substantial repairs to infrastructure damaged by one of the floods.
When the parties lived in Melbourne they travelled to the farm most weekends. When the husband moved to the farm in November 2011 the wife continued to travel to the farm from Melbourne on Friday evenings, arriving close to midnight. She worked on the farm over the weekend and travelled back on Monday evenings in time for her paid employment on Tuesday morning. Although in his first affidavit filed on 16 July 2014 the husband said the wife’s contribution to the farm activities was minimal, he conceded during cross-examination that she brought an enthusiastic and diligent attitude to the farm business and worked hard to make it a success.
During the marriage the value of the property increased from $1,070,000 to $1,860,000, an increase of $790,000. Both parties made financial contributions to the farm. The specific amounts were not specified but I accept the vast majority were from the husband.
The wife’s non-financial contributions to the farm began prior to its purchase and before the parties’ marriage and cohabitation. They continued well after separation in March 2013 as she looked after the farm while the husband was overseas in May, July and October 2013.
The wife also made contributions in a homemaking role. She did most of the housework throughout the relationship. While the parties were in (country omitted) they employed a cleaner once a week but the wife did all of the laundry and grocery shopping. In Australia she did most of the housework and all of the laundry both in Melbourne and at Property A.
The wife used her savings and the income she earned during the relationship to pay for groceries, her travel expenses and vehicle expenses. She paid the full cost of renting the parties’ Melbourne apartment from June 2011 until September 2012.
Counsel for the wife put to the husband that the wife also brought into the marriage qualities that appealed to the husband and which they both understood were going to be her contributions to their married life together. He responded “Yes. Ms Meek has a lot of qualities that I admire and are quite good, yes”.[9]
[9] Transcript 28 October 2015 at page 263
Counsel for the wife argued that the wife’s attempts to conceive a child including undergoing extensive assisted fertility treatment were a contribution on her part to the joint enterprise of the marriage and the welfare of the family and should be taken into account in assessing the weight of her contributions. They were made with a view to becoming pregnant which both parties desired but which were ultimately unsuccessful. Counsel relied on the case of Lee & Hutton [2013] FamCA 745 in which the issue was whether or not the applicant satisfied the statutory requirement for a defacto property settlement. Section 90SB empowers a court to make a declaration concerning the property of the parties if the period of cohabitation is at least two years or there is a child of the relationship.[10] In the absence of those factors the court can only make a declaration if the party seeking the declaration made substantial contributions to, amongst other things, the welfare of the family and a failure to make the declaration would result in serious injustice to them. The trial judge, Watts J found that the de facto relationship had been in existence for 16 days short of the statutory requirement of two years. However, he went on to find that the applicant’s contributions to the welfare of the family included the efforts she made to become pregnant, her discomfort during pregnancy, and the emotional and psychological pain she suffered from a miscarriage of the first pregnancy and a termination of the second. He found those matters elevated her contributions to the welfare of the family to a substantial contribution and that a failure to make the relevant declaration would result in serious injustice to her.
[10] Section 90SB
His Honour said the following:
199. I accept that in this case, the applicant’s contributions to the welfare of the family also include her participating with the respondent in attempting to enlarge their family by having a child. The extent of those contributions have been already described in detail but include the applicant committing to carry a child to term on two occasions; being involved in medical consultations; her physical discomfort during two pregnancies and the physical effects and emotional and psychological pain arising from the foetal demise and from the termination of the second pregnancy.
… … …
202. Based on the facts detailed above, the applicant’s contributions to the welfare of the family in attempting to have a child with the respondent lifts her overall contributions to the welfare of the family out of the ordinary. For the purpose of
s 90SM(4)(c) of the Act, I find that the applicant’s contribution to the welfare of the family constituted by the respondent and herself when evaluated within the context of their relationship and their mutual expectations was substantial.
The matter to be determined in that case was different to the present case as it involved the threshold issue of whether or not the applicant was entitled to bring property proceedings at all. Without the finding on contributions the applicant would have had no relief. In the present case the issue is whether or not the lengths to which the wife went to fulfil the mutual desire of the parties to have a child amounts to a contribution to the welfare of the family. Lee & Hutton is a decision of a single judge of a superior court and I am prepared to accept it as authority for the proposition that the steps undertaken by the wife ought to be taken into account as contributions despite the fact they were ultimately unsuccessful. However, if such reliance is misplaced, I would still take the wife’s actions into account under section 75(2)(o) as a matter which the justice of the case requires to be taken into account.
As foreshadowed earlier, counsel for the wife argued that the contributions made by the wife overall ought to attract greater weight because of the arduous circumstances in which they were made given the husband’s poor treatment of her. He relied on Kennon v Kennon[11] in which the Full Court of the Family Court of Australia found that in particular circumstances contributions by one party may attract additional weight because of violent conduct of the other. Fogarty and Lindenmeyer JJ said at page 84,294 as follows:
[11] (1997) FLC 92-757
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact on that party’s contributions to the marriage, or put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
… …
However, it is important to consider the “floodgates” argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and may be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters – a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.
I am satisfied on the evidence that there were occasions during which the husband behaved badly towards the wife and which caused her great distress. However, in my view they do not amount to “a course of violent conduct” towards the wife. The wife conceded that on at least one occasion she struck the husband, hitting him as he walked past. There is also no compelling evidence that the incidents had an adverse impact on the contributions made by the wife or made them significantly more arduous than they ought to have been. Accordingly, I reject that submission.
Counsel for the husband submitted that equal weight should be accorded to the parties’ respective contributions during the marriage but that the property division should be weighted very heavily in the husband’s favour taking into account his vastly superior initial contributions. He submitted the division of the Australian property on contributions should be 95/05 percent in favour of the husband. That in round terms would translate as the husband taking property to the value of $1,943,089 and the wife $102,268. In my view this would be a grossly inadequate recognition of the wife’s contributions. The value of Property A alone increased by $790,000 during the relationship while both parties were making contributions of equal weight. That increase represents approximately 39 percent of the non-superannuation Australian property.
Counsel for the wife submitted that the contributions made by the wife would warrant her being allocated 15 to 20 percent of the entire pool including the (country omitted) assets. That would translate as the wife receiving between $570,956 and $761,275. He conceded that if the Kennon argument was not successful the amount would be towards the lower part of that range as the Kennon weighting would amount to approximately to 2 to 2.5 percent of the contributions. He argued that if the Court was only taking into account the Australian assets the weighting would be greater. I have already determined not to take the (country omitted) assets into account in assessing the parties’ contributions.
I accept that the weight to be accorded to the contributions made by the parties during the relationship should be equal. The husband did however make significantly greater initial contributions. In my view the appropriate allocation to take into account the contributions of both parties would be 80/20 per cent in the husband’s favour. This would translate as an allocation of property worth $1,636,286 to the husband and $409,071 to the wife.
Section 75(2) factors
The wife is aged 53 years. At the time of the trial she was employed part time three days a week and earning $65,550 per year. She was suffering from an adjustment disorder with mixed anxiety and depression. Although her condition is partly related to the ill health of her elderly mother, I am satisfied on the evidence that the major contributors to her poor psychological health are the end of the marriage, the circumstances surrounding its demise and the loss of the income and employment status she enjoyed before the marriage.
There is no doubt the wife’s income earning capacity was adversely affected by the marriage. She gave up a prestigious and well-paid position in order to move to (country omitted) to live with the husband upon their marriage and has been unable to obtain another position at a similar level. Her resignation in 2007 to move to (country omitted) with the husband marked the end of her fulltime employment and heralded years of intermittent and part-time employment and at much lower remuneration. The husband said in cross-examination that he regarded the parties as peers in terms of employment status and salary at the beginning of the relationship. He also conceded that the only way the parties were going to be able to live together was if the wife sacrificed her job at that time. The following passage of evidence makes that clear:
Counsel: And there was no question of you resigning your position in (country omitted) and coming to work in Australia so that Ms Meek could keep her position as (position omitted) of (organisation omitted), was there?
Husband: Is that a “Yes” or “No” question?
Counsel: That’s a “Yes” or “No” question.
Husband: No, I wasn’t – I wasn’t going to forgo the job in (country omitted) to stay in Australia.
Counsel: that’s right. Yes. I think you agree with me. It just wasn’t something that either you or Ms Meek even contemplated that you would?
Husband: It might have been mentioned but not in a serious context.
Counsel: Exactly. Not in a serious way. And so to promote the purpose of the relationship between you and Ms Meek she moved to – she resigned her employment and moved to (country omitted) to live there with you in (country omitted); correct?
Husband: Yes. I mean, that’s a fact.
… …
Counsel: And you acknowledge, don’t you, that she did so for two reasons: firstly, to support you in your career as a (occupation omitted)?
Husband: I don’t know if I will agree to that point.
Counsel: Okay – and this is not necessarily in order of importance; it’s in order of the way I’m putting it to you – and for you to best advance the prospect of having a baby?
Husband: I will agree to that, yes.
Counsel: Yes. And for the purpose of – incidental of being man and wife – the day-to-day comfort and support that comes with that relationship?
Husband: Yes.[12]
[12] Transcript 28 October 2015 at page 265 to 266
The second time the wife sacrificed her own employment opportunities to be with the husband was when she obtained a job with a (omitted) based company in (country omitted) but was unable to take it up because the husband was transferred to Australia and both parties wanted her to accompany him.
At the time of the trial the wife was earning $120,000 per annum less than she was at the time she gave up her employment to move to (country omitted) with the husband. The wife said she believes that, had she remained in that position, it would have led to opportunities for her to take up directorships on commercial boards which would provide an income after the end of her salaried employment. That was not challenged by the husband.
Counsel for the husband said there was no suggestion the wife ought to have earned more than she did between separation and the time of the trial. However, he submitted that because the wife was capable of working three days a week in a job with the full-time equivalent salary of $100,000, the Court should accept that she is capable of earning that full-time amount. He argued that the wife was only working part time because of her obligations to care for her mother. I do not accept that submission. I am satisfied on the evidence that the reverse is true, namely, that the wife went to live with her mother because she could not afford independent accommodation and, as she did not have a full-time job, she was in a position to care for her mother. At times when she was required to travel for work she was able to make alternative arrangements for her care. At the time of the trial the wife said her mother was likely to go into a nursing home within the following few months.
Counsel for the husband also submitted that the Court ought not accept the wife’s submission that she is unable to obtain higher paid employment in the (omitted) sector because she has not applied for such a position for some years. I reject that submission. It is clear the wife would have taken such a position had it been available to her. The wife annexed to her affidavit filed on 1 October 2015 a list of all the positions she applied for after returning to Australia in late 2009. I am satisfied she made diligent attempts to obtain appropriate employment including in the (omitted) sector when she returned to Australia and only sought work in other areas when she was unsuccessful in obtaining such a position. There is no reason to think she would be more successful now, having been away from the sector for longer.
The adverse impact of the marriage on the wife’s income earning capacity is a particularly weighty consideration in this case as it will affect her for years to come and likely for the rest of her working life.
The wife’s retirement savings have also been adversely affected by the marriage. She made no contributions to her superannuation from December 2007 when she resigned from (employer omitted) until she obtained her job at (organisation omitted) in (omitted) 2010 and again from March 2013 until January 2014. When she did contribute to her superannuation it was at a lower level than previously because of her lower income.
There is some prospect of the wife’s employment situation improving over time. Her psychologist said the end of the litigation will help to improve her psychological health. She may be able to find full-time work but that is uncertain and the weight of the evidence suggests she is most unlikely to return to employment at her pre-marriage level.
The husband is aged 57. He is in good health. At the time of the trial he was unemployed apart from his work on the farm which he declared was generating a loss of $261 per week. However the husband is an experienced (occupations omitted) and has a history of well-paid employment. Although he had periods of unemployment during and after the relationship of the parties, each came about as a result of his voluntary retirement. The weight of the evidence suggests he is not likely to be unemployed for long. He was able to continue to make superannuation contributions throughout the marriage, albeit at a modest level. His capacity to continue to contribute to his retirement income is likely to continue unabated.
The husband has significant financial resources in the form of his (country omitted) assets which at the time of the trial had a value of AUD$1,761,018.
I need to take account of the fact that the husband will have to pay tax of an unknown amount on the funds due to be paid to him by (company name omitted) as this was not taken into account as a liability in assessing the value of the property to be divided.
The husband has a new partner and a young child to support. His partner previously worked at (employer omitted). There is no evidence about whether or when she will return to paid employment and, if so, how much she will earn. Regardless of that, I am satisfied the husband has significant resources and is able to comfortably support himself and his dependants.
Taking these matters into account, in my view the wife should be allocated a further 20 percent of the value of the Australian property, resulting in a total allocation of 40 per cent.
Both parties agreed that the orders should simply require the husband to pay an amount to the wife within a certain period and, in default of payment, Property A be sold.
A 40 percent division of the value of the Australian assets to the wife equates to a value of $818,143. She already has property to the value of $126,941 and would therefore require a cash payment in the sum of $691,202 which I will round down to $691,200. The value of the husband’s 60 percent is $1,227,214.
Counsel for the husband submitted that the wife should only be allocated an additional 10 percent on account of the section 75(2) factors, resulting in an overall distribution to her (on his case) of 15 percent of the value of the Australian assets. On his figures the amount to be paid to the wife would be $177,252.20. He submitted this was in line with a range of “short marriage” cases. However in many of those cases the party who contributed significantly less to the combined property pool returned to employment with income roughly equivalent to what they were earning at the commencement of the relationship. The current case is clearly distinguishable on that basis.
In her case outline filed in Court on 26 October 2015, the wife sought a cash payment of $832,547. That was reduced in her amended case outline filed on the same day to $640,323. The amount she is to be paid as a result of my determination is almost $51,000 more than that. Regardless of the parties’ contentions, I am required to make an order which I assess as being just and equitable in all of the circumstances.
By way of broad cross-check I have attempted to quantify the impact of the most significant of the section 75(2) factors, namely, the diminution in the wife’s income earning capacity as a result of giving up her employment to marry the husband and move with him to (country omitted). I compared the wife’s net income when she was (position omitted) of (organisation omitted) and her net income at the end of the trial. At (organisation) she was earning $180,000 per annum inclusive of superannuation. Assuming the superannuation component was approximately 10 percent, the salary component would have been $164,000 in round terms. According to the Australian Tax Office website, the tax and Medicare levy on that income would be $51,907 leaving net income of $112,093 plus superannuation of $16,400. On her income of $66,550 at the time of the trial, the salary component would be approximately $60,000. Tax and Medicare of $12,247 would be payable leaving $47,753 in net income plus superannuation of $6,500. The difference in net income is $64,340 a year. If the wife retires at 65 years of age that difference over twelve years would amount to $772,080. As a result of these orders she will take $46,063 more than that. However, this rough calculation relates to only one of the s75(2) factors (albeit the most significant one) and not to the rest of those factors or the wife’s contributions. I am satisfied that the result is just and equitable in all the circumstances despite it requiring a higher cash payment to the wife than sought by either party.
I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of Judge Hughes
Date: 29 September 2016
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