Minh & Dieu
[2021] FedCFamC2F 649
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Minh & Dieu [2021] FedCFamC2F 649
File number(s): PAC 4882 of 2017 Judgment of: JUDGE TURNBULL Date of judgment: 23 December 2021 Catchwords: FAMILY LAW – PROPERTY – De facto relationship – relationship of 8 years – parties have one child where party’s income is unknown due to false declarations on tax returns – addbacks – legal fees – where party has used joint funds post-separation – where party spent superannuation at commencement of relationship on failed business venture – just and equitable – one party remains resident in home with children, wishes to retain – whether just and equitable to order superannuation split instead of cash payment to ensure the home can be retained. Legislation: Family Law Act 1975 (Cth), ss.4AA, 90SM, 90SF, 90XT Cases cited: Beck & Beck (1983) FLC 91-318
Bevan & Bevan [2013] FamCAFC 116
Blatch v Archer (1774) 98 ER 969
C & C [1998] FamCA 143
Clauson & Clauson [1995] FamCA 10; FLC 92-595
Dawes & Dawes [1989] FamCA 71
Dickons & Dickons [2012] FamCAFC 154
Fields & Smith [2015] FamCAFC 57
Fitzmaurice & Woolridge [2020] FamCAFC 64
Gosper & Gosper [1987] FamCA 43; FLC 91-818
Greir & Malphas [2016] FamCAFC 84
Hutton & Hutton [2007] FamCA 1701
Jabour & Jabour [2019] FamCAFC 78
Jones v Dunkel [1959] HCA 8; 101 CLR 298
Koch & Kest [2021] FamCA 408
Kowaliw & Kowaliw (1981) FLC 91-092
Lotta & Lotta [2017] FamCA 50
M & M [2006] FamCA 913
Mabb & Mabb [2020] FamCAFC 18
Mayne & Mayne [2011] FamCAFC 192
NHC & RHC [2004] FamCA 633
Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195
Parshen & Parshen [1996] FamCA 141; FLC 92-720
Phillips & Phillips [2002] FamCA 350
Robb & Robb [1994] FamCA 136
Semperton & Semperton [2012] FamCAFC 132
Stanford & Stanford [2012] HCA 52; 247 CLR 108
Vass & Vass [2015] FamCAFC 51Division: Division 2 Family Law Number of paragraphs: 338 Date of last submission/s: 12 August 2021 Date of hearing: 11 - 12 August 2021 Place: Hobart Counsel for the Applicant: Ms R Druitt Solicitor for the Applicant: Family Focus Legal Pty Ltd Counsel for the Respondent: Mr R Hanrahan Solicitor for the Respondent: Alliance Compensation & Litigations ORDERS
PAC 4882 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MINH
ApplicantAND: MS DIEU
Respondent
ORDER MADE BY:
JUDGE TURNBULL
DATE OF ORDER:
23 DECEMBER 2021
THE COURT ORDERS THAT:
1.Within 21 days of the date of this order, the sum of controlled monies in the amount of $16,754.00 (together with any interest accrued thereon), held by Blanchfield Nicholls Lawyers, be paid to the Applicant;
2.The Respondent within one-hundred and twenty days (120) days of the date of this order pay to the Applicant the sum of $108,582.25 (‘the sum’);
3.In the event that the Respondent defaults on the payment to the Applicant pursuant to paragraph 2 above the following will occur:
(a)the Respondent will immediately do all acts and things necessary to sell the property situated and known as B Street, Suburb C in New South Wales (‘the B Street, Suburb C property’) and to that end will:
(i)list the property with a real estate agent for a price not less than $650,000.00; and
(ii)will follow the reasonable advice of the real estate agent as to the method of sale and advertising of the property; and
(b)upon the finalisation of the sale of the B Street, Suburb C property, the Respondent will pay to the Applicant a cash amount equivalent to 16.70% of the gross sale price;
4.Upon the sum being paid by the Respondent to the Applicant pursuant to paragraph 2 of this order, the Applicant will transfer to the Respondent all and any right, title and interest he holds in the B Street, Suburb C property and will withdraw (at his cost) any caveat that he has lodged against the title to the B Street, Suburb C property;
5.The Court allocate, pursuant to s 90XT(4) of the Family Law Act 1975 (Cth), a base amount of $25,162.50 from Ms Dieu’s superannuation to Mr Minh out of Ms Dieu’s interest in the D Super Fund (‘the Fund’);
6.Pursuant to s 90XT(1)(a) of the Family Law Act 1975, whenever the Trustee of Ms Dieu’s Superannuation Fund makes a splittable payment out of Ms Dieu’s interest in the Fund, the Trustee shall pay to Mr Minh, or his legal personal representative, the entitlement calculated in accordance with pt 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the base amount allocated in paragraph 5 above and there be a corresponding reduction to the entitlement Ms Dieu would have had in the Fund but for this order;
7.Paragraph 6 above has effect from the operative time, being four (4) business days from the date of service of the sealed order on the Trustee of D Super;
8.This order binds the Trustee of D Super to observe the Trustee obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001;
9.Subject to other terms of this order, the parties otherwise retain all property, real estate, motor vehicles, chattels, shares, debentures, insurances, pensions, bank accounts, financial resources and liabilities in their names and/or possession, and for this purpose bank accounts are deemed to be in the possession of the party whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker therein and service pensions are deemed to be the property of the person in receipt of the same;
10.The parties indemnify each other as to any outstanding liability encumbering any item of property to which that party is entitled pursuant to this order and in relation to any outstanding debts otherwise owed by them as at the date of this order;
11.The parties undertake all things, do all acts and sign all relevant documentation to give effect to the terms of this order;
12.If either party refuses or neglects to sign or execute any documents, instruments or writing or comply with any part of this order after seven (7) days of being requested to do so by the other party in writing, then the Registrar of the Court be empowered pursuant to s 106A of the Family Law Act 1975 to sign and execute such documents, instruments or writings on behalf of either party as may be necessary to give full force and effect to the order;
13.This order is binding upon the parties’ heirs, executors and beneficiaries; and
14.All extant property orders, save for the order of his Honour Judge Dunkley dated 30 July 2021, be discharged and all extant proceedings be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Minh & Dieu has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Judge Turnbull
INTRODUCTION
Mr Minh (‘the Applicant’) was born in 1980 in Vietnam, and is currently 41 years of age. He migrated to Australia with his parents in 1991, qualified as a tradesman in 2002, and currently works in construction.
Ms Dieu (‘the Respondent’) was born in 1982 in Country E, and is currently 39 years of age. She migrated to Australia with her family in 1991, completed a Bachelor of Healthcare in 2005, and later obtained further postgraduate qualifications. She currently works as a health care worker.
The parties currently live in the greater Sydney area.
There is one child of the parties’ relationship — X (‘X’) born in 2011.[1]
[1] Family Law Act 1975 (Cth), s 90RB.
The Applicant initiated parenting and property proceedings against the Respondent on 27 September 2017.
The Respondent has two other children — F (‘F’) born in 2004, and G (‘G’) born in 2018. Though the Applicant was involved in F’s life by virtue of his relationship with the Respondent, X forms the primary focus of the parenting and property proceedings.
On 18 February 2021 the parties substantially settled their parenting applications with consent orders. Those orders confirm that X lives with the Respondent and spends alternate weekends, half of his holidays and special days with the Applicant.
On 26 August 2021 the parties engaged in a final hearing to finalise the outstanding contentions in their parenting dispute. His Honour Judge Dunkley made further orders regarding special days, international travel and some specific issues.
Pursuant to his Honour Judge Dunkley’s order of 30 July 2021, I heard the matter in relation to the remaining property dispute via Microsoft Teams on 11 August 2021 from Hobart.
FACTS
Before the Applicant met the Respondent he had, in 2004, registered H Pty Ltd. That company was deregistered in 2006.
Also in 2004, the Respondent gave birth to her first child F. She had care of F when she met the Applicant.
The Applicant and the Respondent met in 2007. They commenced a relationship in early 2008 and commenced cohabitation a few months later. The Applicant says cohabitation commenced in March 2008,[2] but the Respondent says that this occurred in June 2008.[3]
[2] Affidavit of Mr Minh, 16 August 2019, [5].
[3] Affidavit of Ms Dieu, 4 June 2020, [12].
I note here, before commencing the chronology of relevant facts, that issues concerning the Applicant’s income and employment throughout the relationship were deeply explored during cross-examination. Of course, the topic is highly relevant to the issue of contributions. The Applicant’s answers during cross-examination were to potentially incriminate him, and as such I issued a certificate under s 128 of the Evidence Act 1995 (Cth).
Mr Hanrahan, Counsel for the Respondent, suggested to the Applicant that his annual income throughout the relationship was less than $6,000.00. The Applicant did not agree, saying that in reality he earned ‘a bit more’ than the income declared on his tax returns for the last three years of the relationship. The amount of income declared on those tax returns was less than $18,000.00. The Applicant did not produce tax returns for the majority of the years of the relationship.
The degree to which the Applicant financially contributed to the relationship, both throughout it and at specific points, forms a key issue towards this Court’s ultimate determination.
To commence the chronology, the parties first lived in a rental property at Suburb J (‘the Suburb J rental property’) for a period of six months. The Respondent had been living at that property with F since January 2008. The Applicant did not pay rent at the Suburb J rental property, though the Respondent says that he gave her $2,000.00 when he first moved in. The Applicant further agreed during cross-examination that his name did not appear on the lease.
Neither party had any significant assets at the beginning of their relationship, though they both held modest superannuation interests.
While the parties lived at the Suburb J rental property, the Respondent purchased a motor vehicle 1 for which she took out a loan of $60,000.00. The Applicant was asked about the Motor Vehicle 1 during cross-examination, and agreed that the Respondent took out that loan to purchase the vehicle. He further accepted that, while the loan was in the Respondent’s name, he also drove that vehicle.
The Motor Vehicle 1 was written off upon being stolen and burned. He said that he had no idea who stole and damaged the car, or how those events might have happened. He agreed that the Respondent continued to repay the loan after the vehicle was written off.
The Applicant left for Vietnam in October 2008. He did so with the ambition to start a business there, with business partners Mr K and another person named Mr L. To support this venture, the Applicant drew an amount from his self-managed superannuation fund. The sum of that amount is contested by the parties. Mr Hanrahan asked the Applicant during cross-examination whether he agreed to that amount being $90,000.00. The Applicant denied this, instead estimating that the amount was $30,000.00. Notwithstanding their disagreement about the sum itself, the parties agree that the monies for this purpose were sourced in full from the Applicant’s self-managed superannuation fund. The funds dedicated to the Applicant’s business aspirations in Vietnam were lost in their entirety.
In March 2009, while the Applicant was in Vietnam, the Respondent purchased a house at B Street, Suburb C (‘the B Street, Suburb C property’). The purchase price was $317,000.00, of which the Respondent borrowed $50,000.00 from her parents. A sum of $20,000 of the loaned amount from the Respondent’s parents was repaid during the relationship. The rest of the purchase price was financed by a mortgage to Westpac Bank. The B Street, Suburb C property was registered solely in the Respondent’s name.
The Applicant’s business venture ultimately being unsuccessful, he returned to Australia in May 2009. He says that upon his return he continued to work as a self-employed tradesman.[4] The Respondent, on the other hand, says that the Applicant did not work for six months after he returned from Vietnam.[5]
[4] Affidavit of Mr Minh, 16 August 2019 (n 2), [11].
[5] Affidavit of Ms Dieu, 4 June 2020 (n 3), [23].
While the B Street, Suburb C property settled in April 2009, the parties did not take up residence there until December of the same year. In the meantime, the parties lived with the Respondent’s parents. The B Street, Suburb C property required renovations before they could move into it — the parties disagree as to the extent of their contributions in this respect. The Applicant details in his affidavit the work undertaken by him on the B Street, Suburb C property, comprising a number of substantial tasks.[6] The Respondent conceded during cross-examination that, for the most part, the Applicant’s account of his work was correct. She did not, however, agree that he built wardrobes nor did she agree that he undertook garden work to the extent he claims. The Applicant agreed during cross-examination that the Respondent met the costs of tradespeople and materials for the renovations, and further agreed that the Respondent’s family helped renovate the B Street, Suburb C property.
[6] Affidavit of Mr Minh, 16 August 2019 (n 2), [12].
The Applicant denied during cross-examination that, around the time the Respondent purchased the B Street, Suburb C property, his income was only approximately $300.00 per week. He said that he received cash as income, and further denied that these monies so received were spent only on himself. According to the Applicant, he worked six-day weeks at this time and contributed his income in this respect to rent and household expenses.
In December 2009, upon completing the renovations, the parties took up residence in the B Street, Suburb C. The renovation and demolition work on the B Street, Suburb C property was completed prior to X’s birth.
X was born in 2011. The Respondent took some time off work while she was pregnant, and took further time as maternity leave after X was born. The Applicant was working odd jobs at this time for which he did not submit a tax return.
In November 2011, the parties refinanced the B Street, Suburb C property with a loan from ANZ Bank.
In June 2012, the Applicant began receiving wages from M Pty Ltd. The company was wholly owned by the Applicant’s mother, Ms N (‘Ms N’), and was deregistered in 2018. The Applicant agreed during cross-examination that he continued to receive income from Ms N, as the owner of the company, until 2015. He further agreed that during this time he only declared earnings of $380.00 per week on his income tax return.
The Applicant also received and had use of the M Pty Ltd company car, which he says has since been sold. He also had access to the company’s credit card, and agreed that his use of the credit card effectively supplemented his income.
The parties agree that, since at least mid-2012, the Respondent held a second job. They disagree about the Respondent’s motivation for doing so. The Applicant says that the Respondent did not take up a second job for extra income. Instead, he says that she did so to acquire skills working for a health practitioner for the purpose of aiding her entry into the beauty industry. The Respondent says that she commenced working two jobs in 2012 to ‘help ease the financial burden’.[7]
[7] Affidavit of Ms Dieu, 4 June 2020 (n 3), [43].
In 2014, the parties purchased a property in Suburb O (‘the Suburb O property’). The property was purchased solely in the Respondent’s name, and the Applicant agreed during cross-examination that he was not named on title as a registered proprietor. He says, however, that this was not sinister. Instead, he said that it was easier for the Respondent to obtain a loan if the property was in her name only.
The purchase price of the Suburb O property was $390,000.00, with $360,000.00 finance from a mortgage to the ANZ Bank. The Suburb O property remained tenanted, and produced approximately $400.00 per week in rental income (with some periods vacant) until it was sold in October 2018.
The Respondent agreed during cross-examination that, prior to its sale, the Suburb O property was rented to an acquaintance. She further agreed that she received rent for that property until it was sold. The parties disagree, however, as to amounts purportedly retained by the Applicant after collecting rent on the Respondent’s behalf.
Also in 2014, the Applicant opened a bank account in his own name for the first time. He explained that is English is “not great” and that he is not good with computers, so he finds it easier to manage cash.
The Respondent, in August 2015, applied to the ANZ Bank for a redraw of $179,974.60, which she received.[8] The redraw was secured against the B Street, Suburb C and Suburb O properties, and was to be utilised to purchase a property at Suburb P (‘the Suburb P property’). The monies were drawn down in October 2015.
[8] Affidavit of Mr Minh, 16 August 2019 (n 2), annex B, 28. The ANZ One Statement account number #2620-41435 of the Respondent from 9 October 2015 to 11 October 2017 shows a credit on 19 October 2015 of $179,974.60 as ‘proceeds of loan drawdown’.
The Applicant agreed during cross-examination that he met the mortgage broker with the Respondent and that he did not object to the Respondent borrowing sufficient funds to purchase the Suburb P property. The parties attended the auction for the property in December 2015, but ultimately did not purchase it.
A key issue in this matter is the Respondent’s use of the redraw monies after this point in time.
The Applicant said during cross-examination that he did not know what became of those funds, and could not confirm the Respondent’s claim that they were used for household expenses. He did, importantly, concede that he did not show much interest in the parties’ financial affairs because he effectively trusted the Respondent to properly manage and expend their finances.
On the Respondent’s own admission, the redraw was spent largely post-separation. In the Respondent’s view, those funds were hers to use as she desired without reference to the Applicant. The difficulty created by her position is that the redraw monies were paid back to ANZ Bank from the Suburb O property sale proceeds, a property purchased during the relationship.
Ms Druitt, Counsel for the Applicant, suggested to the Respondent that the Applicant was not aware that she kept the redraw monies in her own account. The Respondent conceded, saying that the Applicant knew about the redraw for the purposes of purchasing the Suburb P property but did not know that she kept it for her own use.
The use of the redraw funds raised evidentiary and substantive issues at trial, of which an important aspect was her payment of legal fees. The Respondent conceded during cross-examination that she spent between $30,000.00 and $40,000.00 of the redrawn monies on her legal fees. As of the date of final hearing, the Respondent had spent all of the redraw monies. The Applicant maintains that he had no knowledge about Respondent’s use of these funds.
In late 2015, the Respondent holidayed in the Country Q for three weeks. She returned in November, and asserts that around this time she and the Applicant were separated under one roof.
The parties agree that separation occurred no later than March 2016, ending an eight-year cohabitation period.
The Applicant moved into his parents’ home in Suburb R. The Respondent continued living in the B Street, Suburb C property with F and X.
Following separation, the Applicant’s employment was initially with S Pty Ltd as a construction manager. He held this position for 18 months, and confirmed during cross-examination that while working with this firm he earned over $2,000.00 per week. In September 2017 the Applicant was made redundant from that position. He explained that his redundancy resulted from industry downturn and the completion of the project for which he was hired as a construction manager. The Applicant confirmed that he now works in construction, and earns approximately $55,000.00 per annum.
The Respondent received child support from the Applicant (at times with the assistance of Ms N) of approximately $2,000.00 per month from April 2016 to February 2017.
The Respondent commenced a relationship with Mr T (‘Mr T’) in late 2018, and gave birth to her third child G. She said during cross-examination that Mr T did not contribute greatly to household expenses during their cohabitation and instead spent his own money on himself. I note that this contradicts her affidavit in which she said Mr T did contribute to household expenses.[9] Mr T moved out of the Respondent’s home in late 2020 after two years’ cohabitation. The Respondent said that Mr T took G with him, and that she is currently being denied any time with G. She does not pay child support for G.
[9] Affidavit of Ms Dieu, 4 June 2020 (n 3), [11].
In late 2018, the Suburb O property was sold. The Respondent said during cross-examination that it ultimately sold for $445,000.00, being reduced from a sale price of $550,000.00 due to asbestos issues. She said that the loan for the Suburb O property and the $179,974.60 redraw was repaid to the bank from the sale proceeds. The bank retained approximately $391,000.00, with the balance being deposited with her solicitors and put towards outstanding loans. Just over $16,000 remains.
The Applicant confirmed that he had to take out a loan with ANZ Bank to pay his legal fees, and that he had to increase his borrowings to $42,000.00 again to meet his legal costs. The outstanding balance on that loan currently amounts to $29,000.00. He also confirmed that his parents have loaned him money to pay his legal fees and associated expenses.
Also following separation, the Applicant sent money to a friend known only as Mr U. The Applicant agreed that he did so. He further said that he introduced the Respondent to Mr U, and that the Respondent purchased eyelash extensions from Mr U to on-sell for a profit. The Respondent said this venture took place many years ago, while the parties still lived together, and that she still holds the stock as it was never on-sold or used. Further, she said that the company behind the cosmetics business was registered in 2011 and deregistered in 2017, and that her accountant controlled the deregistration process and the relevant documentation. With respect to payments to Mr U which were not consideration for cosmetic stock, the Respondent says that she transferred money out of naïve belief that the Applicant and Mr U were not romantically involved and that Mr U was experiencing ‘hardship’.[10]
[10] Ibid [38].
The Applicant claims he currently pays $72.00 per month in child support — a claim supported by the Respondent’s Financial Statement.[11] During cross-examination, the Applicant expressed uncertainty as to whether this was actually the amount required of him. He said that the figure had been recalculated over time, and that the recalculations resulted in his monthly payments being reduced from $2,140.00 to $72.00. The Respondent’s affidavit annexes child support assessments for 2020/21, which instead show his monthly rate as $36.92.[12] No evidence was produced to show that the figure has changed. The issue of child support is addressed under the issue of adjustments to be made under s 90SM(4)(d)-(g) of the Family Law Act 1975 (Cth) (‘the Act’). Crucially, the Applicant denied that he was not interested in financially supporting X.
[11] Financial Statement of Ms Dieu, 16 February 2021, [13].
[12] Affidavit of Ms Dieu, 4 June 2020 (n 3), annex F.
As for the parties’ current living arrangements, the Applicant says that he lives with his parents but that his continued residence with them is not guaranteed. The Respondent remains resident in the B Street, Suburb C property with F and X.
The Respondent agreed during cross-examination that she receives $300.00 per week from her parents as financial support. Those funds are advanced by her parents for the purpose of the Respondent purchasing groceries and other items. The Respondent further agreed that she has also drawn down $10,000.00 from her superannuation interest to meet necessary expenses. She maintains that, even with the Suburb O property sold and her associated mortgage liability absolved, her credit card debt remains high due to necessary expenses.
ORDERS SOUGHT
The Applicant seeks the following orders in his case outline:
1.That the Respondent within thirty-five (35) days from the date of Order pay to the Applicant the sum of $150,000.00 and in default of payment that the Applicant be appointed trustee for sale of the said property and pay to the Applicant from any sale proceed the sum of $150,000.00 or 23% of the gross sale price whichever is the greater.
2.That the sum held by Blanchfield Nicholls Partners solicitors be paid to the Applicant.
3.Upon payment of the sum referred to in Order 1, the Respondent is declared the sole owner of B Street, Suburb C and the Motor Vehicle 2 registration number ….
4.
4.1That the Court allocate, as required by Section 90XT(4) of the Family Law Act 1975, a base amount of $50,000.00 from Ms Dieu’s superannuation to Mr Minh out of Ms Dieu’s interest in the D Super “The Fund”.
4.2That pursuant to Section 90XT(1)(a) of the Family Law Act 1975, whenever the Trustee of Ms Dieu’s Superannuation Fund makes a splittable payment out of Ms Dieu’s interest in the superannuation fund, the Trustee shall pay to Mr Minh, or his legal personal representative, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount allocated in the proceeding [sic] Order and there be a corresponding reduction to the entitlement Ms Dieu would have had in the Fund but for this Order.
4.3That the above order has effect from the operative time, being four (4) business days from the date of service of the sealed Orders on the Trustee of D Super.
4.4That these Orders bind the Trustee of D Super to observe the Trustee obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
5.Unless specifically referred to herein that the Applicant and Respondent be declared to have the sole right title and interest in; -
5.1Any chattels, goods, furnishings and other property which are at the date hereof in their respective possession; and
5.2Any monies, shares, bank accounts, debentures, insurances, or superannuation entitlements which stand in their respective sole names as at the date hereof.
6.That if either party refuses or neglects to sign or execute any documents, instruments or writing or comply with any Order contained herein after seven (7) days of being requested to do so by the other party in writing, then the Registrar of the Court be empowered pursuant to Section 106A of the Family Law Act to sign and execute such documents, instruments or writings on behalf of either party as may be necessary to give full force and effect to the Orders herein.
7.That the Respondent pay the Applicant’s costs of the property proceedings.
The Respondent seeks the following orders in her case outline:
1. Alteration of Property Rights pursuant to s79 [sic] of the Act
(a)That the Respondent retain all right, title and interest in the property at B Street, Suburb C, known as Lot … in DP …
(b)That within 3 months from the date of this Order the Respondent pay the Applicant a lump sum payment of $50,000.
(c)That the Respondent retain all right, title and interest in the Motor Vehicle 2 Reg … and all furniture and other personal effects in the possession of the Respondent.
(d)That the Respondent retain all her right, title and interest in the Superannuation Fund with Super Fund V.
DOCUMENTS RELIED UPON
The Applicant relies upon the following documents:
·Further Amended Initiating Application filed 16 August 2019;
·Affidavit of Mr Minh filed 16 August 2019;
·Financial Statement of Mr Minh filed 11 February 2021;
·Tender Bundle 6, titled ‘Documents for Tender of Submission’ tendered 12 August 2021 and labelled Exhibit ‘A1’; and
·Applicant’s case outline tendered on 12 August 2021 and labelled Exhibit ‘A2’.
The Respondent relies upon the following documents:
·Amended Response to Initiating Application filed 31 May 2018;
·Affidavit of Ms Dieu filed 4 June 2020;
·Financial Statement of Ms Dieu filed 16 February 2021;
·Further Amended Tender Bundle 2 titled ‘Other Documents’ and including documents to which the Affidavit filed 4 June 2020 refers;
·‘List of References on the Respondent’s Submissions to Documents’ and all the documents referred to therein, tendered 12 August 2021 and labelled Exhibit ‘R1’; and
·‘Summary – Extract from Respondents [sic] Westpac Ac #... Re Addbacks’, tendered 12 August 2021 and labelled Exhibit ‘R2’.
Both parties also rely upon the following documents:
·Affidavit of Mr W, single expert witness, filed 28 May 2020;
·Updated valuation filed 7 July 2021; and
·Joint Balance Sheet amended by consent and tendered 12 August 2021 and labelled Exhibit ‘C’.
ISSUES IN DISPUTE
Before considering the parties’ contentions as to the adjustment of property interests under s 90SM, I must determine the following preliminary issues:
(1)The Respondent’s use of the $179,974.60 redraw from the mortgage secured against the Suburb O property, and whether it justifies an addback of those monies (either in full or in part); and
(2)Whether the Applicant’s expenditure of his superannuation early in the relationship amounted to waste, and whether this expenditure justifies an addback of those monies.
With respect to the substantive application pursuant to s 90SM of the Act, .the following issues require final determination:
(1)The nature and extent of the Applicant’s financial contributions both during and post the relationship;
(2)The nature and extent of the Applicant’s non-financial contributions, particularly to the renovations on the B Street, Suburb C and Suburb O properties;
(3)The nature and extent of the Applicant’s homemaking contributions, particularly in relation to his care of X;
(4)The extent of any adjustment to the Respondent (if any) for s 90SF(2) factors;
(5)Whether there should be an alteration of the parties’ superannuation interests and, if an alteration should be made, the appropriate division of those assets; and
(6)Whether it is just and equitable to meet a proportion of the Applicant’s non-superannuation entitlement with a superannuation split, the aim being to ensure the Applicant retains the home at B Street, Suburb C.
EVIDENCE
I note at the outset that both parties allege that the other has not made full and frank disclosure. With respect to the primary issues focussed upon in cross-examination, I also have concerns about aspects of evidence from both parties.
The Applicant’s evidence
The Applicant confirmed as true and correct the contents of his affidavit and Financial Statement. He further confirmed that he currently lives with his parents at their home in Suburb R. He was then cross-examined by Mr Hanrahan.
Mr Hanrahan devoted considerable attention during cross-examination to the Applicant’s income and employment as it concerned his financial contributions both during and after the relationship. As stated, the Applicant was issued a certificate under s 128 of the Evidence Act 1995 for this purpose.
The Respondent alleges that the Applicant has not cast sufficient light on his financial circumstances in general, and in particular on his income prior to and following separation.
The Applicant did not agree with the Respondent’s position that she worked more than him and received a greater income during the relationship. He maintained this position notwithstanding his low income as declared for the years in which he filed tax returns. As stated earlier, he agreed that he received cash but did not agree that his cash income was solely spent on himself. Instead, he said that he contributed those funds to the relationship by way of rent or other household expenses. It was later put to him that he made little financial or non-financial contributions to the relationship, to which the Applicant did not agree.
With respect to M Pty Ltd, the true nature of the Applicant’s income and benefits from that company may have been clearer if Ms N gave evidence.
The Applicant’s evidence in relation to his financial contributions, income, and earning capacity was evasive and undetailed. Further, his memory appeared to be sparse in relation to the redraw of funds. As such, I accept that the majority of the parties’ joint financial decisions were left to the Respondent — most likely because she earned a greater income.
I am also suspicious of the Applicant’s evidence in relation to his financial contributions because of the issues surrounding child support and payments to Mr U. His current level of child support (assessed at $36.92 notwithstanding his current income) is concerning, particularly because of his concession that he sends money to Mr U. Further, the fact that he was concerned about self-incrimination due to false representations made to the Australian Taxation Office as to his income does not aid his credibility in this respect.
The balance of the Applicant’s evidence was largely uncontroversial. In relation to homemaking contributions he mostly conceded that the housekeeping responsibilities were left to the Respondent. His non-financial contributions, asserted by him as renovating the parties’ properties and the Respondent’s parents’ home, were largely conceded by the Respondent in her oral evidence.
The Applicant otherwise gave evidence in accordance with his affidavit.
The Respondent’s evidence
The Respondent confirmed as true and correct the contents of her affidavit and Financial Statement. She was then cross-examined by Ms Druitt.
Ms Druitt questioned the Respondent in detail about the redraw funds, pointing her to several items of expenditure in her bank statements which showed her use of those monies. The bank statements evidenced that, from time to time, the Respondent withdrew large sums of money.
During cross-examination, the Respondent gave the following evidence in response to Ms Druitt’s questions about the contents of the bank statements:
·on 23 September 2020 the Respondent withdrew approximately $50,000.00 to purchase a motor vehicle, which was ultimately not purchased with the Respondent believing those monies to have been largely returned to the account over time;
·in March 2016 the Respondent withdrew and then advanced to a friend named Ms Y a sum of $50,000.00, and believes to have been repaid in full a few weeks later (though she conceded that the loan was undocumented);
·in July 2016 the Respondent withdrew and then advanced to other friends sums of $10,000.00 and $15,000.00, not remembering at trial the specific purpose of these loans, which were again undocumented and with no proof of repayment;
·in August 2016 the Respondent again withdrew and then advanced to friends sums of $5,000.00 and $10,000.00, again undocumented and with no proof of repayment;
·in September 2015 the Respondent withdrew sums of $45,000.00, $1,000.00 and $25,000.00, and though she could not remember the purpose of each withdrawal she noted that this was prior to separation and that she did not keep track of who paid for what during the relationship;
·with respect to a series of deposits as shown on the bank statements, some of which occurred in February 2016, the Respondent could not say by whom the payments were made or for what purpose the sums were initially withdrawn; and
·despite initially denying that she used the redraw funds to pay her credit card debts post-separation, the Respondent said that she paid some of the Commonwealth Bank account after being shown a part of her affidavit proving the same.
A particularly noteworthy concern is the Respondent’s evidence that she lent proportions of the redraw monies to mostly unnamed ‘friends’ who were not called upon to corroborate her evidence. The Respondent was confident that her debtors had repaid the loans, despite being unable to recollect the amounts loaned or clearly establish that the monies lent were repaid.
The Respondent further agreed that, at the time she was utilising the redraw monies for herself and lending portions of it to ‘friends’, she was receiving income. As such it was not clear as to whether she needed to use the redraw monies to meet necessary expenses for herself and/or her children. The Respondent was also receiving $2,000.00 per month in child support.
The Respondent said that she used the redraw funds to make mortgage repayments. She also denied that she was working anything other than part time during this period, saying that there were times that she was not paid at all due to the impact of COVID-19 upon her employment.
The Respondent agreed that she paid significant legal fees post separation, amounting to approximately $85,000.00. Only about $30,000.00 to 40,000.00 of that amount, however, was sourced from the redraw. She said that the balance of her legal fees was paid through loans from her family.
The Respondent’s evidence regarding her use of the redraw monies was vague. As stated, she conceded that she did not regard the Applicant as having any interest in the redraw monies nor in the B Street, Suburb C property. In essence, she felt unrestricted in her ability to use the redraw funds.
The Respondent’s evidence as to her financial and non-financial contributions were generally unchallenged or unaffected by cross-examination. She said that she did not have access to the Applicant’s money, but that he paid her in cash from time to time. Further, she agreed that she received rental income from the Suburb O property, but said that at times the Applicant withheld rent collected by him on her behalf. Despite not receiving amounts owing to her, she said she continued to meet the mortgage and living expenses. As stated, the Respondent also largely conceded the Applicant’s non-financial contributions in renovating their properties.
The Applicant alleges that the Respondent has not fully and frankly accounted for her expenditure of the redraw monies. I found her evidence of the same to be vague, despite this plainly being a significant issue for trial about which the Respondent was on notice. Further, the evidence in her bank statements fell short of providing a full and detailed account of her expenditure of the redraw monies. The Respondent needed to explain how exactly these funds were spent, and did not adequately undertake this task. This leads me to significantly doubt, to some extent, upon what those funds were spent and whether her expenditure was wise. In particular, I refer here to the Respondent’s evidence that she lent many amounts to ‘friends’. She did not call any of her ‘friends’ as witnesses. The Respondent effectively conceded that the Applicant did not obtain any direct benefit from the redraw, and did not consent to her spending those funds as she did.
The Court may have been assisted if the Respondent, in her affidavit or via an aide memoire, had provided a table evidencing her use of the redraw, with reference to her bank statements. That did not occur.
Otherwise, the Respondent gave evidence in accordance with her affidavit.
SUBMISSIONS
The Applicant’s submissions
The Applicant’s position with respect to the ultimate determination under s 90SM was that he should receive no less than 45% of the non-superannuation assets, with 55% of the same being given to the Respondent. Ms Druitt appeared to premise her submission in this regard upon this Court adding back some, but not all, of the redraw monies spent by the Respondent. If I am to add back the redraw monies in accordance with the Applicant’s case outline, he would receive approximately 33% of the parties’ net non-superannuation assets as agreed in Exhibit C.
Ms Druitt submitted that, regardless of the percentage outcome, the Applicant should receive $150,000.00 in cash. Alternatively, if the B Street, Suburb C property must be sold, the Applicant’s position is that he should receive 23% of the net proceeds of sale. Further, Ms Druitt submitted that he should also receive the remaining sale proceeds from the Suburb O property — the sum of $16,754.00 currently held as controlled monies by Blanchfield Nicholls Lawyers.
With respect to superannuation, Ms Druitt submitted that the Applicant should receive a splittable payment of $50,000.00 from the Respondent’s superannuation fund. That amount would be split to his superannuation fund, in which he currently has $6,271.00. This, it was submitted, amounts to approximately 40% of the current superannuation holdings of the parties.
Ms Druitt also addressed the redraw monies, submitting that the Respondent did fully and adequately disclose her use of those monies. Subsequently, Ms Druitt submitted that I should be cautious to accept the Respondent’s position that the money was spent maintaining herself and her children post-separation.
Ms Druitt further submitted that the sum of $40,000.00, being legal fees paid by the Respondent from the redraw monies, should be added back to the property pool.
As to the balance of the redraw, I was asked to not only consider the vague manner in which the Respondent gave evidence about the expenditure of the redraw, but also the large withdrawals from the account without real explanation. In this regard I was referred to Exhibit A1, which includes an ANZ statement for the loan account for the period commencing 11 January 2016 and ending 11 April 2016. The statement evidences a number of large withdrawals. Ms Druitt submitted that she herself had not traced exactly what monies were deposited and withdrawn from the account because the process was too difficult — the redraw monies had been merged with other monies as deposited to the account by the Respondent and others following separation.
Ultimately, the Applicant’s primary position in relation to the redraw monies is that the entire redraw of almost $180,000.00 should be added back to the property pool. This is because, in the Applicant’s submission, the redraw monies constitute a premature distribution of a matrimonial asset to the Respondent.
Ms Druitt submitted that if I do not add back the balance of the redraw monies spent, those funds should in the alternative be taken into account as a direct financial contribution made by the Applicant post-separation. This is consistent with the decision of Greir & Malphas [2016] FamCAFC 84.[13]
[13] Grier & Malphas [2016] FamCAFC 84, [141] (Murphy and Kent JJ).
On the issue of contributions Ms Druitt submitted that, whatever its actual amount, the Applicant contributed his income to the relationship. Further, the parties had the benefit of using Ms N’s company credit card. The Applicant also addressed in submissions that he undertook significant renovations to the B Street, Suburb C and Suburb O properties.
In relation to factors under s 90SM(4)(d)-(g), Ms Druitt submitted that I should:
·regard the parties as having a similar income, but noted that the Respondent has the ability to earn more;
·take into account, pursuant to Robb & Robb [1994] FamCA 136 (‘Robb’),[14] the Applicant’s care of and contributions to F during the relationship;
·take into account that the Respondent has primary care of X and F, and potentially of G, and that the Applicant also spends time with X and pays child support; and
·take into account that the Respondent has had sole use and occupation of the B Street, Suburb C property for the five and a half years following the parties’ separation without significantly reducing the mortgage, and that the Respondent had the benefit of rental income from the Suburb O property until it sold in 2018.
[14] Robb & Robb [1994] FamCA 136, [67] (Lindenmayer, Finn and Joske JJ).
The Applicant’s position at trial was that, regardless of the property pool’s composition, a just and equitable outcome results in him receiving a total sum of $166,754.00 plus $56,271.00 in superannuation. This, Ms Druitt argued, is justified according to his significant contributions and the factors under s 90SM(4)(d)-(g), including the relevant s 90SF(3) factors.
With respect to superannuation, I was asked to reject any submission that the Respondent should be allowed to pay the amount she owes the Applicant from her superannuation. Ms Druitt submitted that the Respondent adduced no evidence to justify such a proposal, having not substantiated her claim that she could not borrow more than $50,000.00 to pay the Applicant.
The Respondent’s submissions
The Respondent’s position with respect to the ultimate determination under s 90SM was that she should retain the B Street, Suburb C property and the mortgage thereupon, and that the Applicant receive the $16,754.00 in controlled monies and a further $50,000.00. This would result in a total payment to the Applicant of $66,754.00.
Mr Hanrahan submitted that this outcome would be just and equitable, considering that the Respondent may not be able to retain the home if she has to pay the Applicant a greater amount. If any further amount became owing to the Applicant it should, in Mr Hanrahan’s submission, be received from the Respondent’s superannuation fund so as to prevent the B Street, Suburb C property from being sold.
Consistently with the Respondent’s evidence during cross-examination, Mr Hanrahan conceded that the sum of $40,000.00 in legal fees as paid from the redraw should be added back to the property pool.
With respect to the balance of the redraw monies, Mr Hanrahan submitted that the Respondent’s expenditure was for her own and the children’s sustenance and should not constitute an addback. Further, any monies lent to the Respondent’s friends was returned to the account. Mr Hanrahan referred to Exhibit R2, being an extract of the ANZ loan account statement for the period commencing 23 March 2016 and ending 18 August 2017, to support his submission in this regard.
The Respondent’s argument as to her use of the redraw monies was that, after April 2017, she was not receiving a great deal of financial assistance from the Applicant but remained responsible for mortgage and credit card payments.
Mr Hanrahan submitted that, if this Court finds the Respondent’s expenditure to be unexplained, the redraw monies may alternatively be considered as a direct financial contribution in part by the Applicant (as in Grier & Malphas) or addressed under s 90SF(3)(r).
It was further submitted that I should regard as ‘bordering on waste’ the Applicant’s use of his superannuation towards his failed Vietnam business venture and the loss of the Motor Vehicle 1. Mr Hanrahan emphasised the term ‘bordering on’, effectively conceding that the expenditure did not amount to waste in the sense discussed in Kowaliw & Kowaliw (1981) FLC 91-092 (‘Kowaliw’).[15] I questioned Mr Hanrahan as to why those matters could not simply be regarded as vicissitudes of life, instead of waste. I was not pointed to evidence that would establish, on the balance of probabilities, that the Applicant engaged in reckless or wanton behaviour such that the accepted loss can be categorised as waste.
[15] Kowaliw & Kowaliw (1981) FLC 91-092, 76,644.
With respect contributions, Mr Hanrahan submitted that the Respondent made the overwhelming financial contributions both during and after the relationship. I was asked to reject any contention that the Applicant had contributed a significant income, in cash or otherwise, to the relationship. The Applicant’s evidence, in Mr Hanrahan’s submission, was vague at best in relation to his income contributions.
As foreshadowed earlier the Respondent argues that since separation, and particularly since April 2017, she has supported herself and X largely without meaningful financial support from the Applicant.
In essence Mr Hanrahan submitted that the Applicant’s pre and post-separation financial contributions, even taking into account any arguable contribution by him through the redraw, were far inferior to that of the Respondent. Mr Hanrahan asked that I be cautious to accept the Applicant’s unreliable evidence as to his income and financial contributions generally both during the relationship and after separation.
Mr Hanrahan conceded on the Respondent’s behalf that the Applicant contributed his labour and skills to renovations. The Respondent maintained, however, that her family also contributed to the B Street, Suburb C property by way of their labour and skills.
It was further submitted that the Respondent made the overwhelming contributions as a homemaker and parent both during the relationship and after separation. Addressing the Applicant’s purported care of F during the relationship, it was submitted that I should prefer the Respondent’s evidence. The Respondent’s account of the Applicant’s parenting contributions with F were that he provided little assistance to her, and that she was primarily responsible for homemaking and parenting duties in any event. Mr Hanrahan pointed out that the Applicant has no current relationship with F.
In relation to any further adjustments pursuant to s 90SM(4)(d)-(g), including adjustments under s 90SF(3), the Respondent argued that there are no factors which point to an adjustment to the Applicant. If there is to be any adjustment under those factors, Mr Hanrahan submitted, it would be to the Respondent since she has primary care of X and F, and potentially G in the future.
Overall, the Respondent’s position is that the Applicant should be assessed as holding a 15-25% interest in the non-superannuation property pool. The Respondent’s view is that, whatever the percentage outcome, the just and equitable result is a payment of $66,754.00 to the Applicant, including the controlled monies account.
Finally, Mr Hanrahan submitted that there should be no split of superannuation to the Applicant. It was, however, submitted that if more than $66,754.00 became payable to the Applicant any further amount should be split from the Respondent’s superannuation to the Applicant’s superannuation.
PROPERTY SETTLEMENT IN DE FACTO CASES
Preliminary matters
The parties were in a de facto relationship as characterised by the Act.[16] Their relationship lasted approximately eight years,[17] and produced one child of that relationship.[18]
[16] Family Law Act 1975 (Cth), s 4AA.
[17] Ibid s 90SB(a). I note that the parties disagree as to whether or for how long they lived separately at times between 2008 and 2016 as intermittent periods of separation.
[18] Ibid ss 90SB(b), 90RB.
The evidence plainly establishes that, at the time of the application and for at least the last third their de facto relationship, both parties ordinarily resided in Australia. I am therefore satisfied that the parties meet the geographical requirements which empower the Court to make an order with respect to their property interests.[19]
[19] Ibid s 90SK.
Legal principles
In altering the property interests of former de facto partners pursuant to s 90SM(1) of the Act, this Court is bound by the principles extracted in Lotta & Lotta [2017] FamCA 50:
“281. The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
282. The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283. Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284. There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285. In many cases this requirement is readily satisfied where the parties are no longer in a marital or defacto relationship and, thus, for example, the common ownership or use of property by Applicant and Respondent will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286. In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the Respondent seeks an order for adjustment of property and the Applicant contends that there should be no such adjustment.
287. It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
288. In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties present property rights without a consideration of s 79 (4) matters.
289. Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290. The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell [1999] FamCA 1875; (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.”[20]
[20] Lotta & Lotta [2017] FamCA 50, [281]-[290] (Foster J).
Subsections 90SM(1), 90SM(3) and 90SM(4) are, like their respective equivalents in ss 79(1), 79(2) and 79(4), subject to the High Court’s approach and interpretation in Stanford & Stanford [2012] HCA 52; 247 CLR 108 (‘Stanford’).[21]
[21] Hunter & Borman [2020] FamCAFC 250, [31]-[33] (Ryan, Kent and Tree JJ).
The Full Court in Fitzmaurice & Woolridge [2020] FamCAFC 64 condensed the three key steps which must be embarked upon under s 90SM, which are of course subject to s 90SM(3):
“20. The short point however is, whether a staged or another approach is adopted by a judge engaged in determining the parties’ entitlement to property settlement orders, the fundamental responsibility imposed by s 90SM is to:
a.identify the assets and liabilities of the parties available for consideration;
b.consider and assess the parties’ contributions under s 90SM(4)(a)-(c); and
c.consider and assess the matters relevant in s 90SM(4)(d)-(g), including referral to matters in s 90SF(3).”[22]
[22] Fitzmaurice & Woolridge [2020] FamCAFC 64, [20] (Strickland, Ainslie-Wallace and Ryan JJ).
Sections 90SM(1), (3), and (4) and 90SF(3) are extracted below:
90SM Alteration of property interests
(1)In property settlement proceedings after the breakdown of a de facto relationship, the Court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them—altering the interests of the parties to the de facto relationship in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship—altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the de facto relationship; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the Court determines.
…
(3)The Court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the Court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last‑mentioned property;
whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last‑mentioned property;
whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
90SFMatters to be taken into consideration in relation to maintenance
…
(3)The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship); and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
The parties’ existing legal and equitable property interests
Pursuant to the division of the non-superannuation asset pool at paragraph 262, the cash sum payable by the Respondent to the Applicant is $125,336.25. The controlled monies of $16,754.00 will be transferred to the Applicant, leaving the Respondent to pay a further $108,582.25.
The Respondent concedes that she can borrow $50,000.00. She therefore asks that the sum of $58,582.25 be split from her superannuation to meet the Applicant’s full entitlement to the parties’ non-superannuation assets.
As a result of the superannuation property division, the Respondent will hold $106,837.50 in superannuation. It is clear that she could, if so ordered, split a payment of $58,582.25 to the Applicant’s superannuation holding.
If I accept and adopt the Respondent’s alternative submission, the Applicant would receive a fundamentally different asset than the non-superannuation assets to which he is ultimately entitled pursuant to my assessment in paragraph 262. Superannuation cannot generally be accessed until a person reaches preservation age. Given the Applicant’s current age, 41, he will not access his superannuation for many years.
Further, the Respondent did not produce corroborative evidence for her claim that she cannot finance any amount above $50,000.00. She earns income from her employment in the sum of $1,571.00 per week, and receives $300.00 per week from her parents. She also has a long employment history. Importantly, the B Street, Suburb C property as retained by her will have an equity in excess of $300,000.00. In these circumstances, the Respondent should have been able to adduce evidence from a financial institution as to her true borrowing capacity.
This situation is distinguishable from Phillips. In that case, the amount payable to the husband was at most $5,000.00 and there were other assets from which he could receive that sum. The matter before this Court involves no other non-superannuation assets which are available to meet the $58,582.25 payable to the Applicant.
Further, the sum of $58,582.25 represents 46.74% of his entitlement to the parties’ non-superannuation property. This is a sizeable proportion, being almost half of his total entitlement. The Applicant has a right to receive this amount now and to use it for current purposes.
I find that it is not just and equitable for this Court to order the payment of $58,582.25 from the Respondent’s superannuation to the Applicant’s superannuation in substitution for his entitlement to non-superannuation property of the same value.
To ensure that the Applicant receives the amounts owed to him, I will include in the order provisions for the sale of the B Street, Suburb C property in the event that the Respondent cannot secure a loan to pay the entire cash amount as ordered.
The amount owing to him after receiving the monies in the controlled account is $108,582.25, which constitutes 16.70% of the B Street, Suburb C property’s gross value. If the home sells, the Applicant will receive that percentage of the gross sale price.
To accommodate the Respondent’s concerns, I will provide her with four months to pay the Applicant the sum of $108,582.25. I have extended the period one month longer than I would normally give, because this decision has been handed down just before the Christmas and New Year break. That time will allow her to complete the relevant applications for finance to financial institutions.
In conclusion, and having considered the percentage division and its effect upon the actual property of the parties, I consider the terms of the ultimate order in relation to non-superannuation and superannuation assets to be just and equitable.
I certify that the preceding three hundred and thirty-eight (338) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull. Associate:
Dated: 23 December 2021fle
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