MNJ & MEB (No.2)
[2004] FMCAfam 294
•1 July 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MNJ & MEB (No.2) | [2004] FMCAfam 294 |
| FAMILY LAW – Property – parties previously married – resumption of cohabitation after divorce and long separation – previous property settlement orders made at time of divorce – property settlement orders fully executed – wife applies to set aside previous property settlement orders under section 79A(1A) – orders set aside – neither party makes full or frank disclosure of his or her financial position – wife living in de facto relationship with third party since time of final separation – wife fails to provide adequate details of financial arrangements relating to the cohabitation – assessment of various forms of contribution. |
Family Law Act1975
Hickey (2003) FamCA 395
Jones & Dunkel (1959) 101 CLR 298
Phillips (2002) FLC 93-104
Chang & Su (2002) FamCA 156
Stein (1986) FLC 91-779
Mezzacappa (1987) FLC 91-853
Black & Kellner (1992) FLC 92-287
Weir (1993) FLC 92-338
Giunti (1986) FLC 91-759
Briese (1986) FLC 91-713
Oriolo (1985) FLC 91-653
Kannis (2002) FamCA 1150 (unreported)
Fox & Percy (2003) 197 ALR 201
Soulemezis & Dudley Holdings Pty Ltd (1987) 10 NSWLR 247
Louth & Diprose (1992) 175 CLR 621
Waters & Jurek (1995) FLC 92-635
Clauson (1995) FLC 92-595
Bland (1994) 19 FamLR 325
Farnell (1996) 20 FamLR 513
DJM & JLM (1998) 23 FamLR 396
Milankov (2002) FamLR 514
| Applicant: | MNJ |
| Respondent: | MEB |
| File No: | MLM 9961 of 2002 |
| Delivered on: | 1 July 2004 |
| Delivered at: | Melbourne |
| Hearing Date: | 27-28 May 2004 |
| Judgment of: | Walters FM |
REPRESENTATION
| Counsel for the Applicant: | Mr K. Nicholson |
| Solicitors for the Applicant: | Maria Barbayannis & Co |
| Counsel for the Respondent: | Mr T. Serra |
| Solicitors for the Respondent: | Robert A McHugh |
ORDERS
Counsel will be heard as to the orders that each considers are appropriate to give effect to these Reasons.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 9961 of 2002
| MNJ |
Applicant
and
| MEB |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties in this case are not married. They used to be married, but were divorced in 1988. Some eight years later (in 1995 or 1996) they resumed cohabitation, but they did not remarry. They separated for the second time in August 2001, and the wife now seeks orders for property settlement or alternation of property interests.
Because final property orders were made in September 1988 (“the 1988 Orders”) ¾ shortly after the parties separated on the first occasion ¾ the husband argued that this Court did not have jurisdiction to make further orders for property settlement pursuant to s.79 of the Family Law Act. He argued that the Court must first set aside or vary the 1988 Orders, pursuant to the provisions of s.79A.
This Court has Power to deal with the Wife’s Application
At the commencement of the hearing, I heard argument from counsel for the parties as to the preliminary issue raised by the husband.
I concluded that the court does have power to hear and determine the wife's applications pursuant to ss.79A and 79 of the Family Law Act.
I found that the parties had — by their conduct — consented to the setting aside of the 1988 Orders, and that s.79A(1A) applies to the situation in which the parties now find themselves.
Concessions have been made
It was then conceded that the court need not concern itself with the usual considerations that are relevant in applications pursuant to s.79A. In other words, it was conceded that the 1988 Orders should be set aside, and that fresh orders for property settlement should be made. The only question for trial was: What property settlement orders are now appropriate?
It was also conceded that the court should regard the 1988 Orders as comprising a wholly appropriate exercise of the court's jurisdiction at that time, and the embodiment of a just and equitable distribution of the assets and liabilities of the parties as they then existed. As a corollary, it was agreed that the court need not (and should not) revisit any aspects of the parties' relationship prior to the date upon which the 1988 Orders were made.
The parties agreed that their relationship was to be treated as if it had commenced on 7 September 1988 (being the date upon which the 1988 Orders were made). Both parties’ cases were run on that basis.
Documents Relied upon
The wife relied upon the following documents:
a)Further Amended Application for Final Orders filed 14 May 2004;
b)her affidavit sworn 5 August 2003; and
c)her financial statement sworn 14 June 2002.
The husband relied upon the following documents:
a)Amended Response to an Application for Final Orders filed 20 May 2004;
b)his affidavit sworn 25 May 2004; and
c)his financial statement sworn 20 May 2004.
An outline of case document was filed on behalf of the wife on 18 May 2004. No equivalent document was filed on behalf of the husband, but his counsel (Mr Serra) handed up an outline of submissions at the commencement of the trial on 26 May 2004.
The husband's submissions related to the preliminary, jurisdictional issue only. They did not refer to the substantive application for property settlement.
Background Facts
Relevant background facts are as follows:
a)The husband is 62. He was born in August 1941.
b)The wife is 55. She was born in September 1948.
c)The parties were married in May 1970. They separated in 1986.
d)There are five children of the marriage. Two of the children were either adults or (I assume) self supporting at the time of the making of the final orders in September 1988. The other three children (all boys) are referred to in the 1988 Orders. They were then aged 16, 12 and 10.
e)A decree nisi of dissolution of the parties' marriage was granted on 31 May 1988. It became absolute on 1 July 1988.
f)Final orders were made (by consent) in the Family Court of Australia at Melbourne on 7 September 1988. Copies of the 1988 Orders are annexed to both parties' affidavit material.
g)Amongst other things, the 1988 Orders dealt with the issue of property settlement and included a notation (pursuant to s.81 of the Family Law Act) to the effect that "…the parties intend that these orders are made insofar as practicable to finally determine the financial relationship between the parties and to avoid further proceedings between them."
h)Pursuant to the 1988 Orders, the wife received 75 per cent of the net proceeds of sale of the parties' former matrimonial home. The husband received the remaining 25 per cent.
i)In 1989, and using her share of the net proceeds of sale of the former matrimonial home, the wife purchased a property at 39 Pembroke Drive, Somerville ("the Somerville property"). The Somerville property was purchased in the wife's sole name.
j)At the time of the making of the 1988 Orders, the husband had recently purchased a property at 8 Luxton Terrace, Seaford ("the Seaford property").
k)The husband lived in the Seaford property with two of the parties' children. The other three children lived with the wife — but the husband asserts that they also "shared the accommodation" at the Seaford property for various periods until 1991.
l)At the time of the making of the 1988 Orders, the husband was living in a de facto relationship with C.
m)In 1991, the husband purchased a home at 36 Radiata Street, Frankston ("Radiata Street"). The property was registered in C's sole name. I do not know what happened to Radiata Street. I do not know, for example, whether the husband retained an equitable interest in it. The husband was not cross-examined in relation to this matter.
n)In April 1995 (according to the husband) or March 1996 (according to the wife) the parties resumed cohabitation. The husband commenced living in the Somerville property.
o)Both parties were in full time employment at the time that they resumed cohabitation.
p)The parties separated for the second time on 22 August 2001. At the time of the separation, the parties' youngest son (L) was living in the Somerville property. The wife's father was also living there.
q)According to the wife, the husband "ransacked" the Somerville property at the time of separation. He took a number of items with him when he left the home.
r)The wife did not reside in the Somerville property after separation. She placed it on the market for sale.
s)On 29 October 2001, the husband lodged a caveat over the Somerville property. He claimed "an estate in fee simple". His grounds of claim were as follows:
On a constructive trust in favour of the caveator by the registered proprietor, the ex-wife of the caveator.
t)Following the sale of the Somerville property, and by agreement between the parties, the caveat was lifted on condition that the net proceeds of sale be held on trust.
u)The net proceeds of sale (amounting to approximately $31,000.00) continue to be held in trust by the wife's solicitors. It was agreed between the parties that these moneys were to be held on trust pending the determination of the parties' respective claims to them.
v)At a time which is unclear, but which is likely to be shortly after the parties separated, the wife commenced cohabitation with Mr K.
w)The husband sold the Seaford property in or about September 2001 to the parties’ son Dean and his wife. According to the husband, the net proceeds of the sale (after the discharge of the mortgage encumbering the property) amounted to $42,000.00.
x)The husband asserts that he has not been employed on a full time basis since February 2003, due to a shoulder injury that he sustained at that time.
y)In October 2002, the husband and the parties’ son Darren purchased a property at 101 Franciscan Way, Frankston (“Franciscan Way”). Franciscan Way was sold in or about April 2004, and the husband’s share of the net proceeds of the sale amounted to approximately $10,000.00.
z)The wife continues to reside with Mr K. They live in South Australia.
aa)According to the wife, she works in a newsagency business owned by Mr K. She asserts that she is not paid for her work in this regard, and that she is supported by Mr K.
The Law
The general approach that should be adopted by the court in relation to a property settlement application has been described in many cases[1]. The court must first identify the property of the parties. It must then attribute a value to each item of property — usually as at the date of the hearing. Thereafter, it must assess the extent of each party’s contributions under the various subheadings described in section 79(4) of the Family Law Act. Finally, the court must consider the financial resources, means and needs of the parties, and the other matters set out in section 75(2) so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment take place. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means.
[1] see, for example, Pastrikos (1980) FLC 91-987, Lee-Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335, Clauson (1995) FLC 92-595 and Whitely (1996) FLC 92-684
In relation to the contribution of the parties under section 79(4) generally, it has been held that a “global” approach will usually be more convenient than an “asset by asset” approach — although the application of an asset by asset approach does not (of itself) amount to an error of law[2].
[2] see Norbis (1986) FLC 91-712
Section 75(2) is concerned with the process of arriving at a just and equitable result. It follows that there may be circumstances in which the justice and equity of the case, and the specific provisions of section 75(2), support an adjustment in a party’s favour for matters which cannot comfortably be described as being of financial or economic significance.[3]
[3] see McMahon (1995) FLC 92-606 at 82,043
Under section 79(2), the court is required to be satisfied that the order to be made is just and equitable — and not simply that the underlying percentage division of the net value of the parties’ assets is appropriate. In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered[4].
[4] see Russell (1999) FLC 92-877
Section 79(2) and the so called "Fourth Step"
One of the most recent authorities dealing with the correct approach to be applied in property settlement cases is the Full Court decision in Hickey (2003) FamCA 395, where their Honours said:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; Davut & Raif (1994) FLC 92-503; Prpic (1995) FLC 92-574; Clauson (1995) FLC 92-595; Townsend (1995) FLC 92-569; Biltoft (1995) FLC 92-614; McLay (1996) FLC 92-667; JEL & DDF (2001) FLC 93-075 and Phillips (2002) FLC 93-104. (Emphasis added)
Notwithstanding the Full Court’s reference to four steps in the above passage, it is my view that the testing of any proposed orders by reference to section 79(2) is not a fourth substantive step (properly so called) in the property settlement exercise.
In Russell[5], consideration was given to precisely that question. It has been considered in other cases as well[6].
[5] (1999) FLC 92-877 (at 86,439)
[6] see JEL & DDF (2001) FLC 93-075; but see Phillips (2002) FLC 93-1041
The problem with considering the application of section 79(2) as a stand alone requirement or consideration is that it is impossible to determine what factors may direct the court in its consideration of what may or may not be a just and equitable result in proceedings. Nygh J, in early cases, referred to concepts such as “palm tree justice” or “a soup kitchen approach” in relation to subjects such as these. It is impossible to look at the question of whether an order or a result is “just and equitable” without measuring or assessing that consideration by some yardstick. The approach set out in section 79 requires that the court use the considerations in section 79(4) as the yardstick, and not other (wholly undisclosed) considerations.
I note that the Full Court in Hickey did not refer to the so called fourth step as a substantive adjusting process. It clearly indicated that the process relates to the form of the orders that are ultimately to be made (and, in that regard, I refer to the words to which I have given emphasis in the passage from Hickey quoted above).
The high point (as it were) of the Full Court's approach in this regard is to be found in Phillips (2002) FLC 93-104. In that case, the Full Court said (on page 88, 986):
In determining an application pursuant to section 79 findings will usually be made as to the entitlements of the parties expressed as a percentage of the net assets of the parties having regard to the matters of contribution and the other factors. However, when considering whether or not the overall result is just and equitable a further adjustment may be warranted depending on the circumstances of the case.
Earlier in its decision[7], the Full Court metaphorically described this process as follows:
... it is necessary to “stand back” and consider if overall the ultimate award was just and equitable to both parties...
[7] see paragraph 70 on page 88, 986
In my view, Phillips is not and cannot reasonably be interpreted as authority for the proposition that a Court exercising jurisdiction under the Family Law Act in relation to property settlement should “stand back” and make substantive alterations to the result that has been reached after the application of what has been described as the first three steps in the property settlement exercise. The Full Court in Phillips recognised that the order which it considered to be just and equitable in all the circumstances (after allowing the appeal and exercising its own discretion) was an order that itself fell within the range of reasonable and appropriate orders having regard to the specific findings made by the trial Judge. The Full Court did not suggest that any form of additional “loading” could or should be added to (in that case) the wife's overall entitlement. Clearly, the “further adjustment” to which the Full Court referred in the passage quoted above[8] could only comprise an adjustment to the form, structure or balance (for want of a better description) of the relevant orders. Alternatively, the Full Court could only have intended to mean that the “further adjustment” associated with the “fourth step” would be an adjustment from one (slightly less) just and equitable result based on the first three steps of the property settlement exercise to another (slightly more) just and equitable result based on those same three steps.
[8] see paragraph 20 above
I am strengthened in my view in this regard by the fact that the Full Court in Phillips gave no guidance (in the form of guidelines or otherwise) as to the types of factors that might be relevant in the exercise of the discretion so obviously involved in the application of this so called “fourth step”.
The Full Court’s use of the expressions “overall result” and “ultimate award” in the passages quoted above does not alter my view of nature of the so called “fourth step”. These expressions do not obviously relate to the financial result of the proceedings, and in my opinion, can only fairly be understood as referring to the actual orders that the court may be minded to make. Once again, there does not seem to be any clear suggestion that the process associated with the so called “fourth step” could possibly lead to a significant change in the overall financial consequences to the parties of the result achieved following the proper application of the first three steps.
Section 79(2) is Phrased in the Negative
Section 79(2) is phrased in the negative. It reads:
The Court shall 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. (Emphasis added)
The preamble to s 79(4) directs the Court to take into account the matters set out in s 79(4)(a) to (g) for the purpose of determining what order (if any) should be made under s 79 in property settlement proceedings. Section 79(1) empowers the Court to make "such order as it considers appropriate" altering relevant property interests (amongst other things).
Thus ss 79(1), (2) and (4) all refer to the making of orders and not, for example, to the division of property. In my opinion, a careful reading of ss 79(2) and (4) – without more – leads to the inevitable conclusion that s 79(2) does not contain any power to vary or recast a substantive division of property reached after the application of what have been described as the first three steps in the property settlement exercise. That proposition can be tested in the following way:
a)Section 79(2) directs the Court not to make an order (under s 79) unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
b)"The order" referred to in the last two words of s 79(2) can only mean the order that the Court is or may otherwise be minded to make under s 79.
c)But s 79(4) compels the Court to take into account the matters set out in s 79(4)(a) to (g) in the process of considering what order (if any) should be made under s 79.
d)In other words, if the Court scrutinises a proposed order that it is minded to make for the purpose of determining whether that proposed order is indeed just and equitable — as it is obliged to do pursuant to the provisions of s 79(2) — and concludes that it is not just and equitable to make that particular proposed order, then the Court has no option but to revisit s 79(4) to determine what other, alternative or additional order or orders should be made.
e)Section 79(4) must be revisited because that subsection clearly states that the considerations set out in it must be taken into account in determining what order (i.e. what order altering the interests of the parties in their property, including, if appropriate, an order for a settlement of property) should be made.
f)If the property settlement exercise was carried out correctly by the Court on the first occasion, then it is clear that the same overall division of the property of the parties must be achieved when the court revisits s.79(4). All that is left in such a circumstance is to alter the form, structure or balance of the orders required to give effect to that overall division, in order to ensure that s 79(2) is not offended.
g)The only other possibility, it seems to me, is that the Court may conclude – after due consideration of s. 79(2) – that it did not carry out the property settlement exercise correctly on the first occasion, and that that is why it now considers that the proposed order that it was minded to make is not just and equitable. Such a conclusion will necessarily lead the Court to either reassess the parties’ contributions (in all their various guises), or to attribute different weight to the various s 75(2) factors (or both). Either way, the overall process can only, ultimately, involve three substantive steps (being the first three steps referred to in Hickey).
In other words, and as I have already explained, the determination of the proportional or other distribution or division of the property between the parties must necessarily be concluded before one looks at the justice and equity of the actual orders that are utilised to effect that distribution or division.
In any event, and as I have inferred in paragraph 29(g) above, I am of the view that the consideration and application of the factors referred to in s 75(2) in the "third step" of the property settlement exercise provide the Court with ample scope to ensure that the provisions of s 79(2) are not offended. Section 75(2)(o), in particular, enables the Court to take into account a miscellany of relevant circumstances.
Property of the Parties
The first step in the property settlement exercise relates to the identification and valuation of the property of the parties at trial.
During the course of the trial, the identity and value of certain items were agreed. Those items were as follows:
Net proceeds of sale of Somerville property (held in Trust)
$ 31,000.00
Wife’s “drawdown”
$ 31,000.00
Wife’s savings (formally with ING)
$ 8,000.00
Wife’s motor vehicle
$ 8,000.00
Wife’s legal fees (added back)
$ 600.00
Husband’s savings (being husband’s share of proceeds from sale of Franciscan Way)
$ 10,000.00
Husband’s superannuation entitlements
$ 9,813.00
Husband’s motor vehicle
$ 1,000.00
Husband’s boat
$ 2,000.00
Husband’s legal fees (added back)
$ 13,600.00
TOTAL
$115,013.00
Some of the above items require explanation.
The wife admitted drawing down $31,000.00 against the mortgage encumbering the Somerville property. In paragraph 9 of her affidavit, she admitted that the drawdown was for her own use. Mr Nicholson (for the wife) agreed that the drawdown should be treated as an asset (or, alternatively, as a notional asset) in the hands of the wife.
Both parties agreed that the legal fees that they have paid should be treated as an “add back”[9].
[9] See Bland (1994) 19 FamLR 325; Farnell (1996) 20 FamLR 513 and DJM & JLM (1998) 23 FamLR 396; see also the decision of the majority (Nicholson CJ and Buckley J) in Milankov (2002) FamLR 514
It was not in dispute that the husband’s superannuation entitlements can properly be described as an asset in his hands.
There was no agreement as to whether various other items should be included in the “pool” of property available for distribution between the parties.
Husband’s Income Tax Liability
The husband asserted that he owes approximately $27,000.00 in respect of “total income tax assessed and unpaid in previous financial years”. The figure is referred to in item 49 of the husband’s financial statement.
The husband did not explain this alleged debt in his affidavit. It was disputed by the wife.
On 7 August 2003, Federal Magistrate Connolly made orders (by consent) fixing the trial date and providing for various procedural matters. The orders made on that day (so far as they are relevant) are as follows:
2.The wife be excused from precisely formulating the financial orders sought until there has been a full disclosure by the husband of his financial position.
3.The husband file a Response within 21 days and have leave to withdraw his Response filed 10 February 2003.
5.The wife file and serve all further material upon which she wishes to rely 28 days prior to the hearing.
6.The husband file and serve all further material upon which he wishes to rely 14 days prior to the hearing.
7.The parties file a Case Summary 72 hours prior to the hearing.
As is apparent from paragraph 8 of these Reasons, the only relevant document filed by the wife after August 2003 was her further amended application for final orders – which was filed on 14 May 2004, approximately 2 weeks before the trial.
Notwithstanding the provisions of paragraph 6 of the Orders made by Federal Magistrate Connolly in August 2003, the husband filed his financial statement on 20 May 2004 and his affidavit of evidence in chief on 25 May 2004. His amended response was filed on 20 May 2004.
The late filing of the husband’s affidavit and financial statement left the wife with little opportunity to investigate the husband’s financial position. Whilst it is true that the wife could have issued subpoenas at an earlier stage, or brought the matter back to court to seek an order for discovery, the reality is that the parameters of the dispute as they were then understood by the parties did not warrant pro-active steps on the wife’s part and the attendant costs associated with such steps. Both parties were aware that the preliminary issue as to the court’s power to hear and determine the wife’s application would have to be determined at the outset. The husband’s material was filed unconscionably late in the context of both parties' clear desire and intention to have the proceedings (in this court) brought to a conclusion as soon as possible. In my opinion, it is fair to infer that the husband was well aware that the wife would not be minded to seek an adjournment of the trial (after the determination of the preliminary question) in order to investigate the assertions made in his trial material.
The husband did not produce any evidence of the alleged tax liability. His evidence in relation to it was vague, and he appeared uncertain as to the years to which it related and how it had arisen. Given that the husband had previously “earned a high income as a business manager”[10], and that he had worked in the area of motor vehicle finance, I am not prepared to accept that the husband is financially naive. For these reasons (and other reasons, to which I shall refer later in this Judgment) I am not prepared to accept the husband’s evidence as the existence of this alleged liability.
[10] see paragraph 7 of the husband’s affidavit
Husband’s Personal Loan
Item 50 of the husband’s financial statement records that the husband owes $12,000.00 in respect of a personal loan from the Bank of Melbourne.
Notwithstanding the misgivings that I have regarding the husband’s credibility (see below), the fact of the matter is that the husband was not cross examined regarding this liability. I am prepared to accept, therefore, that it should be taken into account.
Husband’s Credit Card Debts
Item 51 of the husband’s financial statement asserts that the husband owes $24,600.00 in respect of two credit cards.
During cross examination, the husband said that the amount owing in respect of one of his credit cards had increased from approximately $16,000.00 in March 2003 to approximately $22,000.00 at the date of trial.
In item 18 of the husband’s financial statement, he confirms that Westpac General Insurance is paying a total of $252.00 per week in respect of the minimum monthly payments on his credit cards. In cross-examination, the husband said that the payment was $970.00 per month, and that Westpac had been making the payments for approximately 8 or 10 months. It had paid a total of approximately $8,000.00.
For the same reasons as those that led me to conclude that the husband’s alleged income tax liability should be ignored, I have concluded that I should also ignore the husband’s alleged credit card debts.
The Husband’s Evidence was unsatisfactory
As indicated in the previous paragraphs, I found much of the husband’s evidence regarding financial matters to be vague and unsatisfactory. By way of example:
a)In paragraph 29 of his affidavit, the husband said that he received a net amount of $42,000.00 in late 2001 as a result of the sale of the Seaford property to his son, Dean (and Dean’s wife). The husband continued:
Of the net remaining figure of $42,000.00, I expended $28,000.00 on my daughter’s wedding in Los Vegas and reception in the United Kingdom plus all travel expenses and accommodation for myself, my daughter and the son in law. The balance of the money from sale was then expended on further living expenses and the current litigation. Also as I have not been in full time employment since February 2003 any savings have been dissipated on general living expenses.
b)In paragraph 30 of his affidavit, the husband said that he spent $12,000.00 on renovations to Franciscan Way. He also contributed $2,000.00 to the purchase of the property.
c)Franciscan Way was purchased in October 2002, and sold in April 2004. The husband did not identify the source of the total of $14,000.00 allegedly contributed by him to the purchase of Franciscan Way, and he did not suggest that any of it was sourced in the net proceeds of sale of the Seaford property. Nor did he suggest that it was funded through his credit cards.
d)I have already found that the husband’s personal loan from the Bank of Melbourne is a liability that should be taken into account in these proceedings. The amount owing is $12,000.00. I can assume (although I do not know) that the personal loan was taken out for the purpose of carrying out the renovations to Franciscan Way.
e)During cross examination, the husband said that he provided one of his sons with $24,000.00 from the net proceeds of sale of the Seaford property because his son “was going to lose his house”. He also said that he paid $7,000.00 to another son, $1,000.00 towards his car and approximately $5,500.00 to the parties’ daughter “to go into business”. He then said that he financed the daughter’s wedding and overseas trip on his credit card.
f)Clearly, the husband’s evidence as summarised in the preceding paragraph differs from his evidence in paragraph 29 of his affidavit.
g)During cross examination, the husband said that he had borrowed approximately $5,500.00 from his daughter, and approximately $12,500.00 from his son in law’s business.
h)In item 53 of his financial statement, the husband asserted that he owes “family members” a total of $15,000.00. It appears to be the case from the evidence given by the husband during his cross examination, however, that three of the parties’ children owe him (or can be regarded as owing him) something in the order of $36,000.00.
i)No evidence was produced by the husband — from the parties’ children or from any other source — to confirm the financial arrangements described in the preceding sub-paragraphs.
j)Having regard to the fact that the husband well knew from at least August 2003 that his financial position was or would be a relevant issue in these proceedings, I am of the view that it is appropriate for me to take the husband’s failure to call any members of his family as witnesses into account in assessing matters such as his description of his financial dealings with them. No explanation was provided as to why the husband failed to obtain evidence from the children (or any of them). In my opinion, the matters raised by the wife in her affidavit (and, indeed, by the husband in his affidavit) fairly required some form of corroboration from the children — and affidavits from them may have greatly assisted the husband’s case.
k)I do not suggest that the observations that I have recorded in the previous paragraph necessarily lead to a strict application of the rule in Jones & Dunkel (1959) 101 CLR 298. Nevertheless, in my view, it would have been natural for the husband to produce the children (or one or some of them) as witnesses, and one would have expected them to have been available to him in that role. I do not infer from the absence of this form of evidence that it would have necessarily been damaging to the husband’s case if it had, in fact, been called. I can and do infer, however, that it may not have helped his case.
The Husband has not made Full and Frank Disclosure
The duty to make full and frank disclosure of one’s financial position has been set out in a number of cases determined by the Full Court over the years. They are helpfully summarised in Chang & Su (2002) FamCA 156.
The Full Court in Chang & Su said that the law to be applied and the approach that may be adopted in cases where, through the lack of a full and frank disclosure, the Court is unable to fully ascertain the extent of a parties’ wealth, are well settled. It then referred to Stein (1986) FLC 91-779, Mezzacappa (1987) FLC 91-853, Black & Kellner (1992) FLC 92-287 and Weir (1993) FLC 92-338. Indirect reference was also made to Giunti (1986) FLC 91-759, Briese (1986) FLC 91-713 and Oriolo (1985) FLC 91-653.
In Weir, the Full Court said (at page 79-593):
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-759 , and Mezzacappa and Mezzacappa (1987) FLC 91-853 . It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It is true that in the case of Monte and Monte (1986) FLC 91-757, the Full Court said that to found jurisdiction under s. 79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identify and value.
We confess to some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The difficulty then arises as to what order should be made. However, we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed.
In Kannis (2002) FamCA 1150 (unreported), the Full Court said (at paragraph 51):
Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.
Conclusion as to Husband’s Alleged Liabilities
Having regard to the matters discussed in the previous sections of this Judgment, I am not persuaded that I should take into account the husband’s alleged credit card debts, and his alleged debts to family members.
Although Mr Nicholson (for the wife) argued that I should treat the amount of approximately $35,000.00 allegedly owed to the husband by certain of his children as an asset, I am not persuaded that it is appropriate to take this course of action either. On the basis of the evidence before me, and taking into account the husband’s failure to make full and frank disclosure of his financial position (and the fact that the law is to the effect that I should not be unduly cautious in such circumstances about making a finding in favour of the party who is seen — in that regard — as being the innocent party) I am of the view that the fairest and most sensible way of proceeding is to conclude that the husband has available to him, or should have had available to him — if he had acted in a prudent manner — assets of sufficient value to enable him to meet any tax liability, credit card debts or debts to members of his family that he may have. In other words, the only liability of the husband that I am prepared to take into account is his personal loan (in relation to which there was no cross examination).
It follows that the husband’s personal loan should be added to the schedule of assets and liabilities appearing in paragraph 33 above. Thus, I find that the property available for distribution between the parties is as follows:
Net proceeds of sale of Somerville property (held in Trust)
$ 31,000.00
Wife’s “draw down”
$ 31,000.00
Wife’s savings (formally with ING)
$ 8,000.00
Wife’s motor vehicle
$ 8,000.00
Wife’s legal fees (added back)
$ 600.00
Husband’s savings (being husband’s share of proceeds from sale of Franciscan Way)
$ 10,000.00
Husband’s superannuation entitlements
$ 9,813.00
Husband’s motor vehicle
$ 1,000.00
Husband’s boat
$ 2,000.00
Husband’s legal fees (added back)
$ 13,600.00
Husband’s personal loan (Bank of Melbourne)
($ 12,000.00)
TOTAL
$103,013.00
The Parties’ Credibility
I am not satisfied that either party has been completely open and frank with the Court in relation to his or her financial position, or in relation to all aspects of the history of their relationship. I have already commented on the husband’s failure to make full and frank disclosure of his financial position, and the inaccuracy of some of the statements in his affidavit[11].
[11] See for example paragraph 29 of the husband’s affidavit
In my opinion, the wife failed to make full and frank disclosure of her financial arrangements with Mr K. As well (and by way of example), in paragraph 7 of her affidavit, the wife said:
The husband paid a weekly sum into the mortgage account after the reconciliation by way of his board. I paid all other outgoings for the property at Somerville and for all food and groceries.
The wife conceded that the above statement was incorrect. She admitted that the husband paid certain household expenses, in addition to the mortgage payments. She also admitted that the agreement between the parties when they recommenced their cohabitation was to the effect that the husband was to pay the mortgage payments in respect of the wife’s property (whilst she was to pay the other payments) but that this arrangement later altered to one pursuant to which she was to pay the mortgage and the husband was to pay all other expenses. This reversal of roles (as it were) occurred in approximately June 2000 — approximately 14 months before the parties’ final separation.
A number of details raised in the husband’s affidavit were admitted by the wife during the course of her evidence — making it apparent that the husband’s contributions during the course of the parties’ cohabitation leading to separation in 2001 were more significant than the wife had suggested in her affidavit.
I have had the advantage of carefully observing the husband and the wife in the giving of their evidence. I am aware, of course, that some Judges “…have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses”[12].
[12] See Fox & Percy (2003) 197 ALR 201 at 209-10 (per Gleeson CJ, Gummo & Kirby JJ; see also pp 238-9, per Callinan J)
In addition to my general observation of the parties’ demeanour, however, I have also taken into account the inherent likelihood of the evidence that they have given in relation to particular issues, and its overall consistency with the affidavit material and other documents relied upon.
Whilst the wife was clearly reluctant to disclose details of her relationship with Mr K, and whilst her affidavit material did not give adequate credit to the husband for the contributions that he had made during the course of the cohabitation leading to separation in August 2001, I am satisfied that, overall, the wife’s evidence is to be preferred to that of the husband (except where I have indicated otherwise). I am certainly not satisfied that I should in all instances accept the husband’s version in preference to that of the wife where their evidence differs[13].
[13] See Soulemezis & Dudley Holdings Pty Ltd (1987) 10 NSWLR 247 at 273-4 and Louth & Diprose (1992) 175 CLR 621 at 640
Contribution
Neither party placed any significant focus upon the period between the making of the 1988 orders and the time that they resumed cohabitation in 1995 of 1996. I accept that both of the parties had one or more of the children residing with them at various times. I also accept that the husband paid appropriate child support for the children that were in the wife’s care from time to time.
I accept that the husband earned “a high income as a business manager” between June 1985 and 1990. His income package amounted to approximately $100,000.00 per annum. Between 1990 and 1997, the husband earned approximately $70.000.00 per annum.
I note that the husband did not deal ¾ in his affidavit material ¾ with his earnings between 1997 and February 2003.
It would appear that, prior to the parties recommencing cohabitation in 1995 or 1996, the husband would occasionally provide the wife with additional amounts of money to buy food or clothes, or to pay gas bills. He purchased a clothes dryer for the wife and the children, together with clothing and shoes for the children (which purchases were in addition to his child support obligations). He paid for the children’s school fees and books, and gave them pocket money from time to time. He also made other small payments to or for the benefit of the wife.
The wife was employed in various part time and full time jobs after the making of the 1988 Orders. She worked in a tavern and in an antique shop. She later worked as a real estate agent. It would appear that she was employed as a manager for Millars Fashion (on a full time basis) for a period of time, but her evidence suggests that she was unemployed and on Newstart Allowance at the time that the husband moved in. She received unemployment benefits for approximately two years. The wife then continued to work on a full time basis until 2001.
In relation to the period between the making of the 1988 Orders and the parties’ resumption of cohabitation, I am unable to conclude that either party made a more significant contribution than did the other — in either a financial or a non financial sense — to the acquisition, conservation or improvement of their property, or to the welfare of the family. Although the husband provided some financial assistance to the wife, it was minimal and insignificant in the context of the period of separation and the separate lives that the parties were leading at that time. Both assisted with the care of the children, and the husband paid such child support as was deemed appropriate at the time. Both acquired assets from the financial resources available to them at the time, and both maintained those assets as best they were able.
I accept the wife’s evidence that the parties recommenced cohabitation in March 1996. At that time, the wife owned the Somerville property. In paragraph 11 of his affidavit, the husband said:
In early 1994 (the wife) was advised by the Minister of Housing that her mortgage had blown out to $85,000.00 and that this was in excess of what they said the property was worth. They insisted she go into either a joint title with the Ministry or transfer back to the Ministry all her title. She rejected either of these options and asked me for help. I immediately paid firstly $1,0000.00 followed by a further $800.00 in March (1994) to allow her to keep the property.
The wife did not deny any of these matters ¾ save that she asserted that the husband paid $800.00 as opposed to $1,800.00. It is fair to conclude, therefore, that the wife had very little equity in the Somerville property at the time the parties commenced cohabitation. She does not appear to have had any other significant assets.
For his part, it would appear that the husband owned the Seaford property at the time of commencement of cohabitation. It is not clear what other assets the husband owned at that time, and is not possible to identify the approximate value of the husband’s then equity in the Seaford property. It would appear to have been modest.
Although the husband earned some $100,000.00 per annum from the time of commencement of cohabitation to approximately 1990, and approximately $70,000.00 per annum from 1990 to 1997, it is not possible to identify from his affidavit material the manner in which or the purposes for which his net income was utilised. He obviously had a motor vehicle and a boat. He also contributed some moneys to superannuation, although his superannuation entitlements are modest and his evidence was to the effect that he had made no contributions since 1998.
The husband said (and the wife did not deny) that, in spite of the fact that they did not recommence recohabitation until March 1995, the husband made all payments (amounting to $900.00 per month) in respect of the wife’s mortgage with effect from March 1994. The husband continued to make these payments through to June 2000. At some stage, the payments rose to $974.00 per month.
In paragraph 12 of the husband’s affidavit he said:
…I expended $63,000.00 on the mortgage from March 1994 to June 2000. As from the latter date, the mortgage was refinanced…in order to pay for the new kitchen and discharge a $12,000.00 debt…in respect of a Holden Commodore used by (the wife). In respect of this car loan, I had paid the monthly instalments of $347.00 for the two years prior to June 2000.
As from the refinancing (the wife) paid the mortgage at the rate of $620.00 per month…
The wife admitted (and I accept) that she redrew $31,000.00 against the mortgage at or about the time of separation for her own use. The wife has agreed that this amount should be “added back” to the pool of assets. It follows that I should treat these moneys as still being available for distribution between the parties.
In paragraph 11 of her affidavit, the wife describes certain “minor improvements” to the Somerville property that she says were paid for or carried out by the husband. I find that the husband did make these improvements, but that the wife has minimised the husband’s contributions in this regard. For example, the husband did work on the garden and lawn at the Somerville property. He purchased and planted fruit trees and a fernery. He constructed a side fence and a steel side gate. He also did some repair or maintenance work within the home. For example, he repaired and replaced certain windowsills and surrounds that had rotted. He also constructed a hearth around a heater in the house.
I also accept that the husband did some of the labour associated with the maintenance or improvements referred to in paragraphs 15 to 20 of his affidavit.
At the time of commencement of cohabitation, the husband brought very few items with him. I accept that he brought his clothes, a cupboard, a portable television and stereo. During the period of cohabitation, the parties purchased a number of items. For example, they purchased a microwave, oven, washing machine, clothes dryer, television and video. As well, approximately 12 months prior to separation an airconditioning unit was purchased for approximately $1,400.00, a refrigerator and freezer were also purchased.
The husband asserts that he purchased many of the above items. The wife says they were purchased jointly — saver for the refrigerator and freezer, which she purchased.
Neither party produced evidence to support the assertions that one or other of them paid for the whitegoods and various other chattels. The wife asserts that the husband took all of her personal papers at the time of separation. The husband denies that he did so.
According to the wife, the husband ransacked the Somerville property at the time of separation. She said that he destroyed a portrait that she had had taken of herself for her children and that he either destroyed or removed photographs of the parties’ children.
The husband denied that he ransacked the home. He admits that he removed the airconditioning unit, but asserted that the hole that resulted from its removal was repaired by one of the parties’ children. The husband admitted taking the refrigerator/freezer purchased by the wife. He says that he took those items to “counterbalance the fact that (the wife) had in her possession a credit card in (his) name with the ANZ Bank”. He denied damaging the wife’s photographs and removing her personal papers.
I prefer the wife’s evidence to that of the husband in relation to the damage to the Somerville property and the removal of items from it. I accept that the wife was so upset by the state of the house after the husband left it that she could not longer reside there. The husband’s evidence in relation to his actions at the time of separation was contrived and unconvincing. For example, when presented with the photographs referred to in the next paragraph of these Reasons, the husband’s responses were delayed, and his speech pattern, tone of voice, pauses between sentences and sentence structure seemed different from the rest of his evidence. His evidence displayed a lack of spontaneity, inappropriate caution, and pressured thought. The wife was not seriously challenged as to her version of events in relation to this matter.
I find that the husband did remove the wife’s personal documents and that he is likely to have in his possession documents which, if they had been produced, could have assisted the Court to determine which of the parties had paid for various, chattels, repairs or improvements to the Somerville property. I do not infer from the husband’s failure to produce this form of evidence that it would necessarily have been damaging to his case if it had in fact been produced. I can and do infer, however, that it may not have assisted his case. In any event, in my opinion the photographs taken by the wife of the state of the house immediately after the husband had left it (being the photographs comprising Exhibit W1) are powerful evidence of the husband’s actions and state of mind at the time. I find that the damage and mess portrayed in the photographs were caused by the husband. His lack of respect for the wife’s property — and her feelings — is apparent from the photographs. The scenes depicted in the photographs are also clearly more consistent with the wife’s version of events than with the husband’s version.
The wife asserted that the damage done by the husband affected the sale price of the Somerville property. There was no evidence to support that assertion, but I accept that the wife spent something in the order of $1,000.00 cleaning the property and preparing it for sale.
I accept that the wife contributed all of her income during the period of cohabitation to the purchase of whitegoods and other chattels, to the conservation or improvement of the Somerville property and to the welfare of the family comprising the parties (and, from time to time, one or other of their children).
I am satisfied that the husband made a significant financial contribution in the manner already described in these Reasons. Not only did he contribute towards the mortgage over the Somerville property, but he continued to pay the mortgage over the Seaford property — which he sold to his son and daughter-in-law shortly after separation. He also made financial contributions to the purchase of whitegoods and other chattels, and to some improvements done to or maintenance carried out on the Somerville property. I do not accept, however, that the husband utilised all his income in this way. I do not know what the husband did with the remainder of his income.
The husband alleged that the wife “spent a considerable amount of money on poker machines and alcohol” during the period of cohabitation. The wife denied this allegation, and I accept her evidence in that regard.
Rather surprisingly, neither party dealt with the issue of contributions to the welfare of the family. For example, no evidence was lead as to which of the parties was responsible (or primarily responsible) for household tasks such as cooking or cleaning. In those circumstances, I am unable to conclude that one party made a greater contribution in this regard than did the other.
After separation, the wife proceeded to sell the Somerville property. She retained the $31,000.00 that she had drawn down on the mortgage at or around the time of separation. The net proceeds of sale (also amounting to $31,000.00) remain in trust.
It was necessary for the wife to replace the furniture taken by the husband at the time of separation, and I am satisfied that she utilised a portion of the moneys drawn down on the mortgage for this purpose.
After the sale of the Somerville property, the husband proceeded to sell the Seaford property to his son and daughter-in-law. The net proceeds of sale amounted to $42,000.00. I have already commented upon the unsatisfactory state of the husband’s evidence regarding the fate of these moneys, and regarding his financial dealings with his children. I have already found that the only liability which should be taken into account in these proceedings is the husband’s personal loan. I have also found that the husband is likely to have resources available to him of similar or greater value than any debts that he may actually owe.
It is clear that the wife made no identifiable contribution to the acquisition, improvement or sale of Franciscan Way. Nevertheless the husband was able to acquire this property, and to expend some $12,000.00 in renovations, at a time when the wife could not gain access to any of the net proceeds of sale of the Somerville property.
This is not a case in which it is possible to be precise when considering the respective contributions of the parties within the contemplation of section 79(4) of the Family Law Act. I have found that the parties contributions (in all their various guises) were approximately equal during the period from the making of the 1988 Orders to the date of resumption of cohabitation. Due to the very obvious lack of evidence, I have also concluded that the parties’ contributions to the welfare of the family were approximately equal after that time, and up to the date of trial.
When I take into account the evidence regarding the financial and non-financial contributions made by the parties to the acquisition, conservation and improvement of assets from the date of commencement of cohabitation to the date of trial, I find that I cannot conclude that one party made any greater or more significant contribution than did the other. Although the husband paid mortgage instalments for both the Somerville property and the Seaford property, he resided in the Somerville property and the wife paid all or almost all of the household expenses for a very significant period of time. When the husband commenced to pay all or almost all of the household expenses, the wife took over the mortgage over the Somerville property. The result of the parties’ living arrangements was that the husband was able to utilise his income to pay the mortgage in respect of the Seaford property and to provide financial assistance for the parties’ children or some of them. I am not satisfied, however, that the husband has fully accounted for all the moneys that he earned during the period of cohabitation, or for the moneys he received from the sale of the Seaford property. Nevertheless, at this stage of the property settlement exercise I am obliged to endeavour to reach a conclusion as to the parties’ respective contributions to the asset pool as it now exists.
The question of how to deal with the “totality” of the contribution factors in this case is a very difficult one. Doing the best that I can with the evidence available to me, I conclude that an appropriate division of the parties’ assets available for distribution between them ¾ as described in the schedule contained in paragraph 59 above ¾ and on the basis of contribution alone, is 50% to the wife and 50% to the husband.
I would add that the paucity of relevant evidence before the court is entirely due to the manner in which the parties have seen fit to conduct the present litigation. Neither party seems to have given any consideration to the manner in which the case should be run in the event of the husband’s initial objection to the court’s jurisdiction being overruled. The husband’s case was an example of “too little, too late”, whilst the wife’s case was simply an example of “too little”.
Section 75(2) Factors
So far in considering the question of property settlement I have dealt with the identification of the parties’ property and resources, valuation issues and the question of contribution. The court has power to make an adjustment to a party's property settlement entitlement on the basis, amongst other things, of both parties’ respective means and needs. The Family Court has been critical of shorthand terms being used to describe this, the last step in the property settlement exercise, preferring to refer to it simply as the section 75(2) factors (see Clauson (1995) FLC 92-595). In essence, section 75(2) is concerned with the process of arriving at a just and equitable result (see, in that regard, Waters & Jurek (1995) FLC 92-635).
The husband is aged 65, and the wife is aged 55. It would appear that the wife’s health is good. There is certainly no evidence that she has health problems.
The husband says that he has “not worked” since February 2003 — due to a “serious right shoulder injury”. According to the husband, the injury led to hospitalisation in March 2003. He underwent three operations on his shoulder in March and May 2003, and during that time contracted golden staph — which delayed his recovery. He has been in receipt of Newstart Allowance since early 2003.
There is no evidence that the husband currently suffers from ill health.
I have already dealt with the property of the parties elsewhere in these Reasons. The husband presently has a very limited income, being his Newstart Allowance and moneys earned from casual employment. He is living with his son and daughter-in-law. The minimum monthly payments due in respect of his credit cards are being met by his disability insurer.
As indicated in these Reasons, I am not satisfied that the husband has made a full and frank disclosure of his financial position. I find that the husband is likely to have financial resources available to him beyond those reflected in his evidence, and in the documents filed on his behalf. I also find that the husband has retained certain of the chattels that he removed from the Somerville property. Having regard to the concession made on the wife’s behalf – to the effect that the amount of $31,000.00 which was “drawn down” prior to the date of separation, or around that time – should be treated as an asset (or a notional asset) in the wife’s hands, and that some of those funds were used by the wife to purchase replacement items for the chattels that the husband removed from the Somerville property, I am of the view that, subject to consideration and appropriate balancing of all other s.75(2) factors, a (relatively) modest adjustment should be made to the percentage split on the basis of contribution alone to reflect that fact.
The wife is presently cohabiting with Mr K. The financial circumstances relating to that cohabitation are less than clear. It would appear, however, that the wife is working for Mr K on a full time basis for little or no wages. In return, Mr K fully supports her. I accept that the wife has no other relevant financial resources.
There is no evidence that the husband does not currently have the physical and mental capacity for some form of appropriate gainful employment. He was previously employed in the automobile sales industry as a financial manager or controller. Even if there had been evidence to the effect that he has some residuary disability as a result of his shoulder injury, there was no evidence to the effect that that disability impacts upon his earning capacity. Still, the husband’s age would mitigate against the possibility of him being able to obtain paid employment at this time.
The wife is clearly capable of appropriate gainful employment. She choses to work for Mr K for no direct income.
Neither party has the care or control of a child of the marriage who has not obtained the age of 18. Neither party is responsible for the support of any other person.
The wife does not appear to have any superannuation entitlements. The husband has superannuation entitlements, but they have now (for all intents and purposes) vested.
Both parties are entitled to a standard of living that is reasonable in all of the circumstances. The husband is presently residing with one of his children. The wife is residing with Mr K.
The duration of the parties’ marriage, and subsequent separation and resumption of cohabitation have not, in themselves, affected the earning capacity of either party.
There are no children of the marriage who have yet to attain the age of 18 years.
Conclusion as to section 75(2) factors
Having regard to all the evidence before me, I am persuaded that it is appropriate to make an adjustment on the basis of the section 75(2) factors. This is so because the purpose of the section 75(2) adjustment is to assist the court with the process of arriving at a just and equitable result. To refuse to make an adjustment in the present proceedings would, in my opinion, be to run the risk of making orders which are neither just nor equitable.
In my opinion the most significant section 75(2) factor is the matter raised in paragraph 107 above. Taking that matter into account, together with all the other matters discussed under the general heading of the section 75(2) factors and the comments appearing in the preceding paragraph of these Reasons, I conclude that an appropriate adjustment to the wife’s entitlement on the basis of contribution alone is to increase that entitlement from 50 percent to 55 or 60 percent of the total property pool of $103,013.00. It would be intellectually dishonest of me to choose either of these figures in preference to the other, and hence I conclude that the appropriate result should be the mid point of the two — being 57.5%.
Overall conclusion
I have already recorded that the total, net value of the property presently available for distribution between the parties is $103,013.00. 57.5 percent of $103,013.00 is $59,232.00.
It is apparent from the schedule contained in paragraph 59 above that the total value of the property to be retained by the wife is $78,600.00 (comprising the moneys held in trust, the moneys already received by the wife, the wife’s savings, the wife’s motor vehicle and the legal fees already paid by the wife). Accordingly, if the wife’s entitlement is $59,272.00, then she must pay to the husband (from the assets at her disposal) a total of $19,328.00.
The net proceeds of sale of the Somerville property (being the moneys presently held in trust) were agreed at $31,000.00. I propose to order, therefore, that the wife pay to the husband the sum of $19,328.00 from those moneys. The balance of the moneys now held in trust, together with the other property owned by or retained by the wife and referred to in the schedule in paragraph 59 above, is to remain the wife’s property.
One of the most difficult aspects of the present case is the relatively modest size of the asset pool. The Full Court has cautioned against assessing section 75(2) factors in percentage terms without considering the real impact of any proposed adjustment. In other words, the real impact in money terms is “the critical issue” (see Clauson (1995) FLC 92-595). In the present case, the section 75(2) adjustment equates to approximately $7,725.00 (being 7.5 percent of $103,013.00). I am satisfied that the adjustment is proper. Indeed, I am satisfied that the adjustment is proper even when regard is had to the differential between the wife’s entitlement and the husband’s entitlement as a result of the section 75(2) adjustment – which differential equates to 15 percent of the asset pool, or approximately $15,450.00.
I shall now hear from counsel as to the orders that each considers are appropriate to give effect to these Reasons.
I, Paul O'Halloran, certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Walters FM
Associate:
Date: 28 June 2004
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