Menzies and Menzies
[2008] FMCAfam 584
•28 May 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MENZIES & MENZIES | [2008] FMCAfam 584 |
| FAMILY LAW – Property – assessment of contributions – long marriage. |
Family Law Act 1975, ss.75, 106A |
| Applicant: | MS MENZIES |
| Respondent: | MR MENZIES |
| File Number: | BRC 9054 of 2007 |
| Judgment of: | Cameron FM |
| Hearing date: | 26 May 2008 |
| Date of Last Submission: | 26 May 2008 |
| Delivered at: | Brisbane |
| Delivered on: | 28 May 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr R. Hamwood |
| Solicitors for the Applicant: | Simonidis Shoebridge Lawyers |
| Counsel for the Respondent: | Ms D.C Spence |
| Solicitors for the Respondent: | McDonald Brown Solicitors |
DECLARATION
The property of the applicant and respondent found to be $479,509.51 is to be divided as to $287,705.71 to the wife and $191,803.80 to the husband.
ORDERS
Cash payment
That within sixty days (60) days of the date of these Orders the respondent shall pay to the trust account of the solicitors for the applicant the sum of $97,614.20.
Property M
That contemporaneously with the payment referred to in Order 1, the applicant shall transfer to the respondent all right, title and interest the applicant may hold in or to the property situated at Property M, in the State of Queensland.
That contemporaneously with the transfer in Order 1, the respondent shall refinance the current CBA mortgage (mortgage number [7]), including Colonial loans numbered [3] and [8], registered over Property M into his sole name and indemnify and forever hold indemnified the applicant in relation to same.
That the respondent be responsible for the preparation of any and all documents, and the costs of same, necessary to effect Orders 2 and 3.
That in the event that the respondent fails to comply with Order 1, the applicant and respondent shall do all such things, acts and deeds and sign all documents necessary to list Property M for sale on the following terms and conditions:
(a)the listing price be agreed by the parties and failing agreement as may be nominated by the chief executive officer of the Real Estate Institute of Queensland or his nominee;
(b)a Real Estate Agent be engaged, as agreed by the parties and failing agreement as nominated by the chief executive officer of the Real Estate Institute of Queensland or his nominee;
(c)that should the property not sell by private treaty for a period of four (4) months, that the said property be sold by public auction unless otherwise agreed by the parties;
(d)that the reserve price be set by agreement between the parties and failing agreement at a reserve nominated by the chief executive officer of the Real Estate Institute of Queensland or his nominee;
(e)that the parties shall agree upon the auctioneer and that in the event that the parties are unable to agree as to the auctioneer then the auctioneer be nominated by the chief executive officer of the Real Estate Institute of Queensland or his nominee;
(f)that the proceeds of sale (whether by private treaty or auction) pertaining to the said property be disbursed in the following manner:-
(i)to discharge any and all registered mortgages secured over the property situated at Property M, in the State of Queensland;
(ii)to meet all reasonable costs of sale including agent’s commission, legal fees, auction expenses (if applicable) and payment of all rates and usual adjustments of sale;
(iii)the balance of proceeds to be divided between the parties as set out in Order 6 below.
For the purposes of the adjustment of property herein, the property of the parties shall be divided as follows:
(a)For the purposes of these Orders the assets and liabilities of the parties (and the value of each) is regarded as follows:
(i)Net proceeds of sale of Property M as referred to in Order 5(f) above;
(ii)Coffs Harbour Time Share valued at $2,855.00;
(iii)[M Pty Ltd] Equipment & Vehicles valued at $20,070.00;
(iv)Superannuation of wife valued at $52,740.00;
(v)Corolla Motor Vehicle of wife valued at $3,500.00;
(vi)Proceeds of sale of Gallant Motor Vehicle valued at $2,000.00;
(vii)Mitsubishi Van in the possession of the husband valued at $6,400.00;
(viii)Household Contents in the possession of the husband valued at $12,015.00;
(ix)Household Contents in the possession of the wife valued at $888.00;
(x)Wife’s bank accounts valued at $10,000.00;
(xi)Wife’s interest in New Zealand Property valued at $143,000.00;
(xii)Wife’s interest in New Zealand Partnership Bank Account valued at $2,108.00;
(xiii)CBA Loan secured by mortgage over the Property M property valued at $274,000.00;
(xiv)Loan from Wife’s father valued at $25,000.00;
(xv)[M Pty Ltd] Partnership Debt to ATO valued at $7,067.00.
(b)The applicant shall be entitled to retain for her sole use and benefit:
(i)Coffs Harbour Time Share valued at $2,855.00;
(ii)Superannuation of wife valued at $52,740.00;
(iii)Corolla Motor Vehicle of wife valued at $3,500.00;
(iv)Household Contents in the possession of the wife valued at $888.00;
(v)Wife’s bank accounts valued at $10,000.00;
(vi)Wife’s interest in New Zealand Property valued at $143,000.00;
(vii)Wife’s interest in New Zealand Partnership Bank Account valued at $2,108.00;
(viii)Loan from wife’s father valued at $25,000.00.
(c)The respondent shall be entitled to retain for his sole use and benefit
(i)[M Pty Ltd] Equipment & Vehicles valued at $20,070.00;
(ii)Proceeds of sale of Gallant Motor Vehicle valued at $2,000.00;
(iii)Mitsubishi Van in the possession of the husband valued at $6,400.00;
(iv)Household Contents in the possession of the husband valued at $12,015.00;
(v)[M Pty Ltd] Partnership Debt to ATO valued at $7,067.00.
(d)The net proceeds of sale referred to in Order 5(f) shall be divided between the applicant and respondent such that the applicant receives 60% of the net total of the property of the parties, inclusive of those items particularised in Order 6(b) above.
(e)The net proceeds of sale referred to in Order 5(f) shall be divided between the applicant and respondent such that the respondent receives 40% of the net total of the property of the parties, inclusive of those items particularised in Order 6(c) above.
That pending completion of the sale of Property M:
(a)the respondent has the sole right to occupy Property M;
(b)the respondent is to keep Property M and surrounds well maintained;
(c)the respondent shall pay all rates on Property M as they fall due;
(d)both parties are hereby restrained from taking any step to encumber or further encumber Property M without the consent of the other party or prior order of the Court.
(e)Both parties are hereby restrained from taking any step that would have the effect of increasing the amount of debt currently secured against Property M.
Coffs Harbour Time Share
That within sixty (60) days of the date of these Orders the respondent shall transfer to the applicant all right, title and interest the respondent may hold in or to the Coffs Harbour time share investment unit.
That the applicant be responsible for the preparation of any documentation necessary to effect the transfer referred to in Order 8.
Division of personal property
That save and except as provided for above, the applicant forthwith retain as her absolute property, the title and possession of, and the respondent forthwith relinquish and/or transfer all right, title and interest that he may have in and to, all property currently in the applicant’s possession including but not limited to the following property and financial resources:
(a)any real property held by, or on behalf, of the applicant including, but not limited to, the interest the applicant holds in the property situated at Property N, Christchurch, New Zealand;
(b)the applicant’s bank account(s);
(c)the applicant’s superannuation entitlements;
(d)the motor vehicle/s currently in the applicant’s possession; and
(e)all other proprietary interests of whatsoever nature in the applicant’s current possession and/or control.
Save and except as previously provided for herein, the respondent forthwith retain as his absolute property, the title and possession of, and the applicant forthwith relinquish and/or transfer all right, title and interest that she may have in and to, all property currently in the respondent’s possession including but not limited to the following property and financial resources:
(a)the business ‘M Pty Ltd’;
(b)the respondent’s bank account(s);
(c)the motor vehicle currently in the respondent’s possession;
(d)the household goods and chattels currently in the property situated at Property M, in the State of Queensland,
(e)the respondent’s superannuation entitlements; and
(f)all other proprietary interests of whatsoever nature in the respondent’s current possession and/or control.
Miscellaneous
That the applicant and respondent each be responsible for liabilities incurred in their names including all borrowings, personal loans and credit card facilities and tax debts and shall indemnify and keep indemnified the other against any liability that occur in respect thereof.
That the respondent indemnify, and forever hold indemnified, the applicant in relation to any and debts and liabilities of the business ‘ [M Pty Ltd] including but not limited to Australian Taxation Office debt.
That the applicant indemnify, and forever hold indemnified, the respondent in relation to any and all loans provided to the parties by the family, or any members of the family, of the applicant at any time during the course of the relationship.
That the applicant and respondent each do all acts and things necessary, including signing all necessary documents, so as to give full force and effect to the provision of these Orders and in the event that either party refuses or neglects to comply with any provision of these Orders within fourteen (14) days of a written request to do so by the other party, then a Deputy Registrar of the Family Court of Australia at Brisbane be hereby appointed, pursuant to Section 106A of the Family Law Act, to execute all documents in the name of that party and do all acts and things necessary to give validity and operation to these Orders.
That the parties each bear their own costs of, and incidental to, these proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Menzies & Menzies is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 9054 of 2007
| MS MENZIES |
Applicant
And
| MR MENZIES |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
The parties to these proceedings are Ms Menzies and Mr Menzies. They were married in New Zealand in 1976, separated in Australia on 22 April 2005, and were divorced in Australia on 5 August 2006.
The law prescribes that there be a four-step process in the determination of matters involving property under the Family Law Act 1975 (“Act”). It is first necessary that the Court determines the property of the parties at the time of the hearing. Secondly, it is necessary to assess the contribution of the parties to the accumulation of that property. Thirdly, it is necessary to determine the application of any factors under s.75(2) of the Act and, finally, it is necessary for the Court to determine whether the outcome of the proceedings is just and equitable.
As to the assets and liabilities of the parties, many items were agreed but a number of matters require comment and consideration. The matters which were agreed were:
Assets
$
House at Property M
530,000.00
Coffs Harbour time share
2,855.00
Wife’s superannuation
52,740.00
Wife’s Toyota Corolla
3,500.00
Husband’s Mitsubishi van
6,400.00
Contents in the husband’s possession
12,015.00
Contents in the wife’s possession
888.00
Liabilities
Amount owing under the mortgage on the house at Property M
274,000.00
Matters in issue
The first of the matters in issue is the [M Pty Ltd] partnership. The husband says that he has only a half share in this business. I do not accept this as accurate. Exhibit E, being the tax return for that partnership, demonstrates that in the 2007 year the earnings of that partnership were paid exclusively to the husband and not to the son of the parties, who is a partner in that business. In the circumstances, I am of the view that all the assets associated with that partnership are truly the assets of the husband.
The next matter is the Gallant motor vehicle which was sold for $2,000.00. This vehicle was disposed of in a barter arrangement by which labour for the [M Pty Ltd] partnership was acquired. It became, in essence, a liquid asset which was used to generate income for that business. While it was suggested that the proceeds of the sale of the vehicle became part of a different physical asset, I do not accept that to be so any more than any other income earned by the business would have done so. It was an asset, in effect converted to cash, and spent on a non-capital expense. It should be considered as an asset of the husband.
The husband’s bank account of $3,000.00, I accept is, in all probability, an asset created post-separation, and as post-separation savings it should be excluded from the pool of assets.
The wife’s bank account at separation stood at $10,000.00 and has reduced to $1,000.00 because of expenditure on legal fees. This amount should be added back and the account, for the purposes of the pool, should stand at $10,000.00.
In relation to the wife’s one in sixth share in a block of flats in Christchurch New Zealand that, in my view, should form part of the pool of assets. Although it was submitted that this partnership share should be identified as a separate pool, it is clear on the evidence that the income derived from this asset was used for the family as a whole. I accept that it was, in reality, an asset of the marriage and treated as such by the parties. Thus it should be included generally in the pool of assets.
Turning to the undistributed cash held by the New Zealand partnership, the husband has submitted that there is a large pool of money in New Zealand represented by partnership earnings not distributed to the wife. The New Zealand partnership annual reports give the lie to this proposition. Page 4 of the 2007 accounts, which are Exhibit B, show the current assets of the partnership, as distinct from non-current assets of the partnership, held at the National Bank of New Zealand to be NZ$15,413.00. Divided by six and converted into Australian dollars as at yesterday, I have calculated the wife’s share of that amount to be $2,108.51.00. This amount should be included in the pool as an asset of the wife.
The husband’s Visa card debt did not exist at separation and represents legal fees paid by him. This liability should not be taken into account when determining the net asset pool.
There was disagreement between the parties as to whether the sums lent by the wife’s father were still really owing and/or would be forgiven like so many other loans, were they still to be owing. Turning first to the question of whether that debt remains outstanding, I find that it is. So much is clear from Annexure RDCM28 of the husband’s affidavit sworn 22 May 2008. It might be anticipated that this outstanding debt would be forgiven like so many other amounts have been historically forgiven by the wife’s father, but it cannot be predicted with certainty that this will happen. In those circumstances, I consider that this debt should be taken into account.
As for the husband’s tax debt, this stood at $7,067.00 at separation and is now $17,724.00. The lesser of these figures should be taken into account when determining the pool.
Therefore I find that the pool of assets and liabilities to be taken into consideration in this matter is as follows:
Assets
$
House at Property M
530,000.00
Coffs Harbour time share
2,855.00
[M Pty Ltd]
20,070.00
Wife’s Superannuation
52,740.00
Wife’s Toyota Corolla
3,500.00
Gallant motor vehicle
2,000.00
Mitsubishi van
6,400.00
Husband’s contents
12,015.00
Wife’s Contents
888.00
Wife’s Bank account
10,000.00
New Zealand property
143,000.00
Share of New Zealand partnership cash
2,108.51
Total Assets
785,576.51
Liabilities
Visa card
0.00
Mortgage
274,000.00
Loan from Mr L
25,000.00
ATO debt
7,067.00
Total Liabilities
306,067.00
Net value of the asset pool
479,509.51
The facts
The relevant chronology of the relationship between the parties is set out in the wife’s amended case outline dated 26 May 2008. I accept that as a useful outline subject to the following matters emerging in the evidence of the parties.
In the wife’s affidavit sworn 2 May 2005, the following matters emerged:
a)when the parties purchased their first home in Dunedin for $24,000.00, the wife’s mother provided them with a deposit of $2,400.00;
b)the wife ceased employment in 1980 for seven years following the birth of the parties’ second child and was the primary caregiver until she returned to work in 1987 whereafter she, in addition to working as a [healthcare professional], remained the primary caregiver of the children, also being responsible for much of the day to day household duties;
c)for about six months from January to June 1995 the wife lived in the nurses’ residence at [X] Hospital while the sons of the marriage were in boarding school nearby. During that period the husband was unemployed and the wife was the sole income earner;
d)in around 1995 the husband remained unemployed and the wife remained the primary caregiver;
e)in 1995 the parties purchased two two bedroom units at Property A in New Zealand, where the parties carried out much of the work involving painting and wallpapering, new curtains and miscellaneous jobs while, at the same time, the wife was still in paid employment;
f)in 1987 when the wife returned to work as a [healthcare professional], the husband was working in the store which they operated, but during that period the wife’s earnings were their primary income. During that time she also cared for their children and was responsible for much of the business’s paperwork;
g)upon moving to Australia earlier this decade the husband had periods of unemployment and his non-financial contributions were not as great as the wife’s; and
h)since separation the husband has continued to live in the matrimonial home but notwithstanding this, he, the wife and their son [A] have tiled around the pool area of the matrimonial home property.
In her affidavit sworn 26 July 2007 the wife sets out in paras.17 and 18 the records of her income from the year 2000 to the year 2007, together with a summary of the husband’s work history.
In his affidavit sworn 1 May 2008 the husband deposes to having operated the [Z] shop and general store business for ten years, during which time the wife looked after the children. His recollection, deposed to in that affidavit, is that the wife worked on about five occasions in the shop over the ten year period, although she also completed the books for the business at the end of each month.
The husband also deposes to having worked on the Christchurch property in about 1991 and carrying out significant maintenance and other work in that property over time.
In relation to the property at Property M the husband says this:
I designed the construction of the Property M house and had a builder build the house. I constructed stone walls in respect of the house, I painted the house inside and out, attended to the lay out of the gardens and performed all the tiling in respect of the house. In addition over the years I have attended to substantial work in respect of the improvement of the Property M property including the establishment and maintaining of the gardens, establishment and maintaining of the lawns, construction of the garage, installing installation in the ceiling, laying pavers on the property and other significant works. (para.22)
The husband speaks in his affidavit of 1 May 2008 of the work that he did upon the family’s arrival in Australia. He talks of having worked at [Y] and having done a number of jobs after working for them, including working as an upholsterer, selling furniture, attending to stocktaking for approximately six months and working for two months as a painter, following which he worked for six months as a health and safety officer.
The husband also deposes that since the date of separation he has paid all the joint expenses of the wife and himself concerning the Property M property, including the house and contents insurance, council rates, mortgage repayments, household repairs and maintenance and other similar joint expenses.
In para.32 of the husband’s affidavit of 1 May 2008 he says that during the marriage from time to time the wife’s parents lent to the wife and him various moneys and he goes on to say that all those loans were repaid. For the reasons already given, I do not accept this last assertion.
Both of the parties gave evidence and were cross-examined.
Contributions
It is the Court’s role to determine what the contribution of the parties were to the accumulation of the asset pool and in this regard it is to be noted that both the parties started the marriage with very little in the way of assets. This was a long marriage in which the significance of individual contributions has been affected, if not exactly eroded, by the accumulation of contributions by both parties over the years.
I accept the wife’s recollection in preference to the husband’s. While she seemed confused sometimes when giving her evidence, I accept her recollections as genuine and reliable. I did not form so positive a view of the husband. While not exactly evasive, his answers lacked frankness and he avoided giving direct answers if he could temporise or be oblique in his responses.
I accept that both parties put considerable efforts into building, establishing and maintaining the various properties they have owned together. However, I accept that the wife worked longer and harder in paid employment once she returned to paid work in 1987 than did the husband. I accept that the wife was the primary caregiver for the children of the marriage, although in making that finding I make no adverse commentary on the husband’s contribution. I simply assess it to be the lesser of the two.
Coupled with these findings are the gifts and one bequest which the wife has received from her family, being:
a)$2,400.00 from the wife’s mother for the deposit on the first home;
b)$10,000.00 being a gift from the wife’s grandfather;
c)$7,500.00 being a bequest from the grandfather; and
d)$35,000.00 being forgiveness of debts by the wife’s father.
To this should be added the value of the wife’s share in the partnership in the block of flats in Christchurch. These are considerable contributions brought into the marriage over time by the wife.
Given that I have concluded that it is appropriate to consider all of the assets in one pool, I must determine what I consider to be the parties’ contributions to those assets. Proceeding on that basis and assessing the parties respective contributions overall, I find that based on those contributions the assets of the parties should be apportioned 60% to the wife and 40% to the husband.
Section 75(2) considerations
The parties are in good health and both have earning capacity. Although the wife submitted that the husband has a greater earning capacity than she, I doubt, based on his history, that this is actually so. While I note that the husband may, on the face of it, have a lesser working life than the wife, the demands of nursing are not inconsiderable and I think no assumption should be made, given that the parties’ ages are not so different. All in all, reviewing the matters to be taken into account under s.75(2), I am of the view that no further adjustment is appropriate.
Just and equitable
Turning to just and equitable considerations, based on the net assets of the parties already discussed, the assets held by the wife are 66.04% and the assets held by the husband are 33.96%. Those I set out now.
The wife’s assets and liabilities:
Assets
$
House half share
265,000.00
Time share half share
1,427.50
Superannuation
52,740.00
Toyota Corolla
3,500.00
Contents
888.00
Bank account
10,000.00
New Zealand Property
143,000.00
Share of partnership cash
2,108.51
Total Assets
478,664.01
Liabilities
Mortgage half share
137,000.00
Loan from Mr L
25,000.00
Total Liabilities
162,00.00
Net position
316,664.01
The husband’s assets and liabilities:
Assets
$
House half share
265,000.00
Time share half share
1,427.50
[M Pty Ltd]
20,070.00
Gallant motor vehicle
2,000.00
Mitsubishi van
6,400.00
Contents
12,015.00
Total Assets
306,912.50
Liabilities
Mortgage half share
137,000.00
ATO debt
7,067.00
Total Liabilities
144,067.00
Net position
162,845.50
To adjust these figures to reflect the apportionment of 60% to the wife and 40% to the husband, it will be necessary that the wife pay the husband $28,958.30. That will then give the wife a net asset position of $287,705.71 and the husband a net asset position of $191,803.80.
I am satisfied that the apportionment of the assets so described is just and equitable in the circumstances of these proceedings.
Conclusion
Consequently, I declare that the property of the applicant and the respondent found to be $479,509.51 is to be divided as to $287,705.71 to the wife and $191,803.80 to the husband.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Cameron FM
Associate:
Date: 20 June 2008
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