MILLER & KAHN
[2013] FMCAfam 50
•21 January 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MILLER & KAHN | [2013] FMCAfam 50 |
| FAMILY LAW – Property Adjustment – de facto spouses – assessment of competing proposals. |
| Family Law Act 1975 ss.75(2), s.79, 79(4)(a), 79(4)(b), 79(4)(c) Evidence Act 1995 s.79 |
| Jones v Dunkel (1959) 101 CLR 298 |
| Applicant: | MS MILLER |
| Respondent: | MR KAHN |
| File Number: | BRC 7740 of 2009 |
| Judgment of: | Burnett FM |
| Hearing date: | 6 June 2011 |
| Date of Last Submission: | 6 June 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 21 January 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr T F Jordan |
| Solicitors for the Applicant: | Barry Nilsson Lawyers |
| Counsel for the Respondent: | Mr G N Gunn |
| Solicitors for the Respondent: | Adrian Hawkes Lawyers |
ORDERS
That the applicant pay to the respondent the sum of $6,420.25.
That save for order 1 the parties otherwise stand possessed of all items including cash and superannuation funds together with real and personal property in their possession as at the date of trial.
That the applicant should continue to hold her interest in the real estate situated at Property M, free of any ongoing claims by the respondent.
IT IS NOTED that publication of this judgment under the pseudonym Miller & Kahn is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 7740 of 2009
| MS MILLER |
Applicant
And
| MR KAHN |
Respondent
REASONS FOR JUDGMENT
The parties to this application had cohabitated for approximately 15 years prior to permanently separating on or about 17 April 2009. The applicant and respondent are each now about 62 years of age. The applicant’s date of birth is [omitted] 1951. The respondent’s date of birth [is] 1952. They first met and commenced cohabitation in or about 1994. Each of them had been in prior relationships and had children from those relationships. The children of those relationships are now all adults and save for a son of the respondent who lived with the parties for a number of years as a teenager the children of the parties do not appear to have featured in the issues between these parties.
The parties had no children from their relationship. The estate is of modest proportions and generally its quantum is not in issue. There are a number of minor matters in issue which I will address shortly. The issues that fall into dispute between the parties largely concern allowances that ought be applied to the applicant against the respondent’s interests in estate because of:
a)A greater initial contribution to the establishment of the estate by the applicant;
b)Violence directed by the respondent to the applicant during the course of their relationship; and
c)Greater demonstrated s.75(2) entitlements on the applicant’s part.
The applicant contends for a 70/30 split of the estate in her favour. The respondent contends that the split should be 50/50.
Initial contributions
Exhibit 1 summarises the evolution of the estate. Save for two matters which I address below it was agreed that the estate had at commencement a value of approximately $129,662.00 made up as follows:
Assets
Property G
$140,000.00
Share Portfolio
$39,183.00
Mortgage in respect of real estate
-$100,000.00
Interim Cash payments due to the respondent from a property settlement
$13,419.00
Boat and bus
$8,000.00
Further cash payment to the respondent from his property settlement
$23,240.00
Subaru Motor Vehicle
$1,000.00
Shed
$2,000.00
Tools
$500.00
Commonwealth Bank Savings Account
$320.00
National Australia Bank Savings Account
$2,000.00
Total:
$129,662.00
The items in dispute concern the respondent’s valuation of a boat and bus of $8,000.00 and savings in the National Australia Bank account of $2,000.00. No valuation evidence concerning the boat and bus was produced. They were at best, guesstimates by the respondent who led no admissible evidence consistent with the provisions of s.79 of the Evidence Act 1995 to prove up the value of such items.
I do not know what they were worth and attribute no value to them. I will allow the sum of $2,000.00 for the National Australia Bank account. That gives an initial value of the joint estate at $121,662.00 of which the applicant provided approximately $80,000.00 in value and the respondent provided approximately $40,000.00 in value. That is approximately two thirds to one third. Most significantly the applicant introduced real estate in the form of the residential property at Property G, a property that she had purchased in December 1991.
In April 1996, that is two years after the parties commenced cohabitation, the applicant sold that property and realised a sum of $52,486.82 nett of the mortgage. The contract price was $148,000.00 and the mortgage payout was $95,513.18. She also incurred the usual fees associated with the sale being real estate agent’s fees and legal fees. However, these matters were not particularised though the applicant stated in her affidavit-in-chief that the nett proceeds of sale on that property was the sum of $48,337.27 which funds were then applied to the purchase of another property. I assume the difference between $52,000.00 and the $48,000.00 sum is associated with those unspoken expenses.
Contemporaneous with that sale she settled on the purchase of vacant land being [omitted]. This property was purchased solely in her name for a sum of $92,000.00. As noted earlier the nett proceeds of sale of the Property G property were applied to this purchase. The balance of the $43,662.73 was sourced from the realisation of the applicant’s share portfolio. I assume this fund was exhausted by the [L] purchase as it no longer featured in the applicant’s affairs after that time.
The [L] property was unencumbered. That property was subject to some minor improvements by cleaning and excavating a site for a shed and also some turfing. In January 1998 the [L] property was sold for $120,000.00. The difference between its purchase price of $92,000.00 and the sale price being a sum of $28,000.00. That sum was split between the parties with each receiving a sum of $14,000.00. I note the applicant’s accounting did not allow for sale expenses or other holding expenses she would have incurred such as rates.
The respondent did not challenge this evidence. In my view this conduct demonstrated a sense of generosity by the applicant toward the respondent which was perhaps undeserved given other matters evident in their relationship as are discussed below. At this juncture I note concerning this property the respondent contends:
a)He paid a sum of $3,000.00 by way of deposit;
b)He shared the holding expenses.
He also contended that he permitted the applicant to hold the property in her name solely so as not to complicate his property settlement proceedings underway with his former wife. I do not accept his evidence. The trust account receipt issued on payment of the deposit was issued on 8 January 1996 for the receipt of cash of $3,000.00 then received into the agent’s account from “Ms Miller”, the applicant.
No material was placed before the court to support the contention that the respondent was then involved in property settlement negotiations and accordingly did not wish to complicate matters as he says. This could readily have been done by him introducing into evidence a copy of his deed of property settlement or orders if any were made. The respondent was the party best positioned to introduce this evidence as he would have had knowledge of it and a ready capacity to obtain it. He didn’t. In the circumstances, I think it is appropriate to draw the inference permitted by Jones v Dunkel (1959) 101 CLR 298 that the failure to call the evidence was because such evidence would have been adverse to the respondent.
I accept the receipt on its face demonstrates that the applicant paid the deposit. I accept that she had the means to pay the deposit from her own funds sourced from the sale of shares that she had held and realised as part of the funding of that transaction.
At this point I will make some additional general observations on the credit of both the applicant and the respondent. While clearly the parties were engaged in dispute and each exhibited a passionately mutual attitude of dislike toward each other I am satisfied that generally the applicant was far more reliable as a witness than can be said of the respondent. A number of factors led me to draw this conclusion. First, there are demonstrated instances of embellishment by the respondent. For example, in an affidavit filed on this application on 29 October 2009, he deposed to his boat and bus having values of $15,000.00 and $2,000.00 respectively, however, in a draft affidavit prepared for other proceedings he stated their combined value at under $8,000.00. For those purpose it was to his advantage to understate or overstate, as the case may be, the value of those two particular items.
I have earlier noted there was no appropriate valuation evidence produced in any event. However, notwithstanding that matter the bus was not in working order. From the photographs forming part of the evidence, I think it would be overly generous to describe it as junk. The boat was at best described as a work in progress. Its value was, in fact, its potential, a fact realised in the course of the relationship between the applicant and the respondent. Plainly, however, the overvaluation in these proceedings would simply have served to enhance the respective percentages of initial contribution although probably only a matter of marginal moment in circumstances such as these where there had been a reasonably lengthy relationship.
Secondly the respondent sought to underplay the reprehensible conduct on his part alleged against him. In particular, an incident occurred in August 2009 where there was alleged cruelty by him towards one of the applicant’s pet dogs. The dog in question was a [breed omitted] terrier. The breed is well known and it’s hardly of the kind to strike terror in the hearts of most able-bodied persons. The respondent’s conduct resulted in a domestic violence order being made by a court against the respondent following a contested hearing. He denied any wrongdoing.
However, in cross-examination he stated he was trying to retrieve the dog because it had urinated in their bed previously and he thought it was going to do it again. He sought to intervene before it happened but states in the event it was too late. There was no evidence to suggest this was usual behaviour on the part of the dog. Indeed, for a domesticated dog it would be regarded as highly unusual. Given the applicant’s allegation that the respondent was chasing the dog and striking at it with a broom, it is in my view entirely understandable and consistent to hear that the dog did in fact urinate particularly I expect that in the circumstances it would have been fearful.
In my view the applicant’s version has a greater degree of plausibility given the facts which are accepted by the respondent and when considered against the common course of conduct and behaviour. Plainly, he would not wish to admit to cruelty towards the animals nor to the conduct attributed to him. However, I am satisfied that on the balance of probabilities the events occurred as the applicant says. It instanced another occasion where his evidence, in my view, departed from the facts.
Thirdly, there were the instances of domestic violence. Five instances were alleged against him. He had an explanation for two of them. In each instance he sought to downplay his involvement. For instance, the event in the motor vehicle on the return trip from the snow was described by him as a “storm in a tea cup”. However, it involved a serious assault witnessed by another whose evidence of the savagery of the assault was never challenged. These instances serve to illustrate how the respondent has tailored his evidence by downplaying or embellishing as circumstances required to suit his case.
Whilst often there may have been some element of truth in his testimony it was never fulsome. Generally, I have concluded that his evidence is unreliable and the evidence of the applicant ought be preferred where there is any conflict between them.
Following the sale of the [L] property the applicant purchased the property at Property M on 7 July 1997 for $104,000.00. A joint loan from the Commonwealth Bank of Australia was used to acquire the property and that loan was paid out by the applicant upon the settlement of the sale of the [L] property.
The parties had intended to improve the property with a house construction that never occurred. The respondent moved the bus and shed onto the property which became the place of dwelling on the property. Other improvements to the properties included the construction of kennels, some landscaping and the construction of a small plant nursery, however, as the exhibited photographs demonstrate the living conditions remained primitive and were little better than permanently camping out.
I accept both parties have contributed to this situation irrespective of their comparative means which I will address later. By the time of separation the parties not only shared the property but there were other chattels either acquired during the course of the relationship, or in the case of one particular chattel which had been introduced by the respondent and which had been significantly improved, namely the boat. These items were listed on page 2 of exhibit 1 with a total attributed value of $475,419.00. Except for the respondent’s cash at bank which had been reduced by $5,729.00; the applicant’s cash at bank which had been reduced by $35.00; and allowance of $3,000.00 made for the applicant’s [omitted]; an increase of the applicant’s superannuation by $4,723.00; and an increase of the respondent’s superannuation by $231.00 these amounts comprise the assets at trial. There were no liabilities. By the conclusion of trial agreement had been reached on values except for two items, that is, a debt of $3,000.00 paid by Mr W to the respondent and an assertion that the applicant has a business valued at $5,000.00 in respect of the [omitted].
I have earlier expressed my views of the respondent’s credibility. I simply don’t accept him on any contest of evidence as against the applicant. I find that he did in fact receive $3,000.00 from Mr W as is contended by the applicant. The respondent contends that there was a value of $5,000.00 on the applicant’s [omitted]. No valuation evidence was produced to establish this matter. The figure is simply a stab by the respondent. It is inadmissible and his views on the matter are rejected.
It follows that I find that the estate at trial had a value of $452,241.00 made up as follows:
Assets
Property M
$315,000.00
Boat
$42,000.00
Items associated with boat not included in the boat valuation
$9,800.00
Ford Falcon
$7,400.00
Triton Ute
$14,000.00
Cash in bank -Respondent
$10,000.00
Cash in bank- Applicant
$2,485.00
Furniture and Effects Applicant
$1,000.00
Furniture and Effects Respondent
$1,000.00
Flooring
$0.00
Canoe
$0.00
Guns & Firearms
$0.00
Bus at Property M
$2,000.00
Caravan at Property M
$500.00
Items in Container
$500.00
Applicant’s Superannuation
$15,716.00
Respondent’s Superannuation
$26,340.00
Monies receive from Mr W
$3,000.00
Total:
$452,241.00
Section 79 of the Family Law Act1975 deals with the alteration of property interests. It applies to these parties who were in a de facto relationship which lasted approximately 15 years. The approach requires a four step process. First, there must be a quantification of the estate. I have already undertaken that exercise and explained how those figures have been achieved. The second step requires an assessment of the respective contributions by each of the parties to the estate. Section 79(4)(a), (b) and (c) specifically provide:
“(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.”
Dealing then with the matter of direct financial contributions. A number of factors arise for consideration. First is the respondent’s contribution of real estate. Despite the changes in the specific definition of the holdings the applicant has consistently maintained the character of real estate holdings throughout the course of the relationship. She is the only party who has made and continued such a holding. The respondent’s contribution to the real estate was somewhat limited.
As is noted there was some limited assistance in relation to the [L] property and in respect of the Property M property. Further the greater physical contribution was made by the applicant in the context of its maintenance, particularly its development of the gardens, landscaping and the kennels. There were, however, some minor contributions by the respondent particularly in relation to the accommodation which was jointly shared by them.
The respondent’s principal financial contribution to the assets of their relationship was in the form of chattels. Those chattels were of limited value of which the boat was the most significant. The boat, of course, was an asset which was developed largely through the course of the relationship by contributions no doubt made by both parties. There was a sum of money held by the respondent and its consumption was not explained but, in any event, I am satisfied that the money was not appropriated to the real estate which can be accounted for from the applicant’s own financial resources.
I consider that it is more likely than not that the respondent’s fund was applied to the general costs of living as well as to the improvement of the respondent’s boat. I find that the respective financial contributions at the outset were about one third/two third as I have already noted. During the relationship both the parties worked at various jobs and nothing of particular moment could be identified as demonstrating any particular financial contribution by either party through the course of the relationship.
They both lived modestly and there could be no identified particular waste. The respondent did, however, introduce a modest inheritance late into the relationship although arguably those monies too may well have disappeared into the improvement of the boat. The applicant’s fair approach to financial matters I think also warrants particular mention.
As I have earlier noted she split the profit achieved in the sale of property, equally, in respect of the [L] property she did that in circumstances where I think strictly she didn’t have to as the law then stood. The respondent had no equitable claim upon the asset. His benefit has only recently arisen by operation of more recent changes with the introduction of de facto relationship law. I accept the respondent’s submission that in this case the parties have kept their finances separate with the respondent largely applying his funds to his own interests, including his boat, and the applicant applying her funds to the property and her dogs but that they have otherwise shared common expenses.
The applicant contends five per cent should be allowed in her favour on account of this factor. I accept that submission. It reflects a fair allowance for the initial and ongoing financial contributions by the applicant, but whilst acknowledging the length of the relationship between the parties the fact remains that the respondent’s lesser contribution and later ongoing appropriations to his boat favour some small allowance to the applicant.
The next factor concerns the non-financial contributions.
The most significant issue here concerns the applicant’s allegations against the respondent with respect of ongoing domestic violence. I accept the applicant’s complaints and the evidence of the ongoing domestic violence she suffered at the hands of the respondent. The evidence is that these events were not limited. At least five significant instances have been cited, however there were more. Whilst they may not have all been serious, plainly at least one event was. From the medical records of Dr S it is apparent the applicant suffered a five centimetre laceration along the side of her left forearm, left little finger and ring finger.
There was injury to tendons and nerves affecting those areas. She required hospitalisation for those nerve and tendon injuries including surgical repair. The injuries were reported to have left her with permanent damage resulting in lower functionality and collateral depression and other assaults have also had a serious quality. They included a number of attempted events of strangulation and other physical injury together with verbal abuse. I have no doubt that the ongoing nature of these events and their after effect have resulted in the applicant’s contributions being significantly more arduous.
I accept the applicant’s submission that 15 per cent reflects an appropriate allowance for this factor. Nothing in the evidence otherwise suggests any other particular allowance ought to be made in favour of either party on account of any non-financial contribution.
The next section, s.79(4)(c) has no relevance in this case. In saying that I have considered the non financial contributions to property as advised earlier.
The third consideration that arises from the matters called for under s.79(4)(d), (e), (f) and (g). Subparagraphs (f) and (g) have no relevance as there were no children to this association. Also the orders will not have any impact on the earning capacity.
The only question remaining is in respect of the ss.75(2) factors. Many of the factors identified in ss.75(2) are not relevant. Dealing with the ones that are, I take into account the respective age and health of each of the parties. I have earlier identified their age and except for the observations concerning the permanent injury to the applicant, I note their health has been generally good. There were complaints of prospective ill-health and whilst that is arguable, nothing in the evidence demonstrates that the ailments are inconsistent with the sorts of ailments that one would expect of persons in their early 60’s.
Next are the questions of income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment. Again, I am conscious of the fact that the applicant is now in paid employment as a [omitted]. The respondent continues with his trade on a part-time basis but, perhaps, more profitably working part-time employed in the [omitted] and other related sectors. He also has had the benefit of a recent inheritance for which no allowance is made in the financial contributions that are part of the award. That positions him much more comfortably than the applicant in terms of their ongoing financial position.
In terms of the commitments of each of the parties necessary to enable them to support themselves, I note that, again, there are no particular claims made by each against the other which could be said to afford any particular need for allowance. In terms of the eligibility of either party for superannuation I note that both are now at a point where their super funds have vested and they are entitled to call upon their funds albeit the sums available to them are modest. In terms of the standard of living and in all the circumstances it would be reasonable.
I have already made observations about the standard that they have enjoyed to date. It is not an overly high standard and accordingly it is a factor that I think does not require any particular weighing. Next is the extent to which the parties whose maintenance is under consideration have contributed to the income earning capacity and property of the financial resources of the other party. Again, beyond my earlier remarks a matter which I think requires no specific comment and doesn’t call for any particular weighing.
Next is the duration of the association and the extent to which it effected the earning capacity of the parties or the party whose maintenance is under consideration was afforded. Again, a factor which has been earlier addressed and it calls for no particular weighing. Finally the terms of any order made under s.79 in relation to the property of the parties.
The applicant contends that a five per cent allowance should be made for her particularly on account of her age, the fact that the nature of the work that she presently undertakes is heavy, at least, for a woman of her age and, of course, she has a limited work life.
The respondent, I note, has received a significant inheritance of approximately $110,000 which will comfortably set him up for his forthcoming retirement. The applicant’s income and earning potential is slightly less than that for the respondent who has not had difficulty finding employment on a part-time basis as required in the [omitted] sector notwithstanding his age. He has highly marketable skills in his trade. In the circumstances, I am of the view that a five per cent allowance should be made for the applicant under ss.75(2) having regard to each of the matters which I have identified.
It follows that at this stage the applicant in my view ought to have a 25 per cent allowance factored in her favour such that the split is 75/25. That requires finally then a consideration of the fourth step, namely, whether or not such an award would be just and equitable. Given the background facts that I have addressed and which I will not repeat, I am satisfied that in these circumstances a 75/25 split is just and equitable. Given then the assets held by the parties it follows that in my estimation the applicant presently holds assets with a value of $345,601.00 in her own name, they being: the property at Property M, $315,000.00; the Ford, $7,400.00; cash $2,485.00; furniture, $1,000.00; the bus $2,000.00; the container of items, $500.00; the container, $1,500.00; and superannuation, $15,716.00.
Accepting the estate has a value of $452,241.00 and needs to be divided 75/25 the applicant’s entitlement is to $339,180.75. It follows that she holds in her possession a sum of $6,420.25 in excess of her entitlement following the proposed distribution. Upon that basis I direct that the respondent have judgment for the applicant in the sum of $6,420.25.00 but that otherwise the parties should stand possessed of all items including cash and other real and personal property in their possession as at the date of trial. I note that the respondent should continue to hold her interests in the real estate free of any ongoing claim by the respondent.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date:24 January 2013.
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