MOFFATT & CORDER

[2019] FCCA 2515

FEDERAL CIRCUIT COURT OF AUSTRALIA

MOFFATT & CORDER [2019] FCCA 2515

Catchwords:
FAMILY LAW – Property dispute after 12 year relationship – small pool consisting of family house and husband’s superannuation – wife seeking to retain unencumbered family home despite husbands significantly greater contributions – wife’s future needs substantially greater – property pool divided 65/35 in favour of the wife.

Legislation:

Family Law Act 1975 (Cth)

Cases cited:

Kennon & Kennon [1997] FamCA 27
Stanford v Stanford [2012] HCA 52

Pierce & Pierce (1999) FLC 92-844

Applicant: MR MOFFATT

Respondent: MS CORDER

File Number: DGC 1624 of 2016

Judgment of: Judge Burchardt

Hearing dates: 26 & 27 August 2019

Date of Last Submission: 27 August 2019

Delivered at: Dandenong

Delivered on: 8 October 2019

REPRESENTATION

Counsel for the Applicant: Mr Chrislett

Solicitors for the Applicant: Bayside Solicitors

Counsel for the Respondent: Mr Jackson

Solicitors for the Respondent: MDL Law

Counsel for the Independent Children's Lawyer: Mr Taghdir

Solicitors for the Independent Children's Lawyer: Taft Lawyers

ORDERS

1. The Wife pay to the Husband the sum of $47,850 (“the payment”) on or before the 8^th day of December 2019 (“the date”);

2. That contemporaneously with the payment:

   (a)The Husband do all such acts and things and sign all such documents as may be required to transfer to the Wife at the expense of the Wife all of her right, title and interest in the real property situate at and known as C1 Street, Suburb B.

   (b)being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the real property);

   (c)The Wife indemnify the Husband against all payments and liability in respect of all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.

3. That in the event that the whole of the payment has not been made by the date then the real property be forthwith sold altogether out of Court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:

   (a)first to pay all costs, commissions and expenses of (the said trust transfer and) the sale;

   (b)secondly to discharge the mortgage and any other encumbrance affecting the real property;

   (c)thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 7.5 per centum per annum adjusted monthly from the date to the Husband;

   (d)fourthly the balance to the Wife;

4. That pending the payment or completion of the sale:

   (a)The Wife have the sole right to occupy the real property and during such right of occupation the Wife pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;

   (b)The parties hold their respective interests in the real property upon trust pursuant to these orders; and

   (c)Neither party encumber the real property without the consent in writing of the other party.

5. That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)Each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders.

   (b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

   (c)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

IT IS NOTED that publication of this judgment under the pseudonym Moffatt & Corder is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 1624 of 2016

MR MOFFATT

Applicant

And

MS CORDER

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is the property component of a long running dispute between the parties. Parenting orders were made by consent on 27 August 2018 pursuant to which the children of the relationship will live with the wife and the two younger children will, once certain preconditions are satisfied, spend supervised time with the husband. Both sides concede that the pool is not a large one, consisting of the former matrimonial home which has an agreed value in the range from $620,000 to $660,000 and the husband’s superannuation of about $271,000. The wife’s superannuation is so small as to be of no moment. The wife seeks that she retain the matrimonial home and that the husband retain his superannuation. The husband seeks an equal division of the entire property pool. For the reasons that follow I am going to order that the property pool be divided in the proportions of 65 per cent to the wife and 35 per cent to the husband, but the husband’s 35 per cent share will include his superannuation.

Agreed or Not Contested Relevant Facts

1. The husband was born on … 1951.  He is, and has been for many years, retired from his profession as a public servant.  He has an Super Fund C pension (which is described as an annuity) worth $271,624 which pays him an annual income, it would appear, of approximately $24,116.  He additionally receives a Government pension of approximately $340 a week.  The husband had a triple bypass in 2014 and had a cancer removed from his forehead in mid-2019.  Although her counsel sought to suggest otherwise, the mother concedes that the father is in poor health (see paragraph 4 of her trial affidavit).  The mother was born on … 1965 and is in good health (paragraph 3 of her trial affidavit).  The parties commenced a relationship in … 2004 and separated on 24 March 2016, on or about which date the wife took out an Intervention Order against the husband which removed him from the family home. 

2. The parties have three children; X, born … 2006; Y, born … 2008; and Z, born … 2010.  The children have continued to live with the wife in the matrimonial home, which is unencumbered, since separation.  Indeed, it is the wife’s case that she should be permitted to retain it. 

3. Both parties drank heavily during the relationship. The husband says he has not consumed alcohol for two years, a matter to which I will return, but it does appear that he no longer consumes alcohol at all. It has emerged that there is a substantial wine collection still in the matrimonial home.

4. At the start of the relationship each of the parties owned a property.  The wife owned a property at A Street, Suburb B, which appears to have been sold in 2007 with a net return of $202,500.  The father owned a home which was sold in 2005 with an agreed net return of $650,000. 

5. At a date that does not seem to be in any way clearly denoted in the parties’ trial affidavits, the parties bought two properties in Suburb B.  The one at number C1 Street, Suburb B is the matrimonial home.  A further property at C2 Street, Suburb B appears to be an undeveloped block of land.  That has been sold although what happened to the proceeds is a matter in dispute.  It is clear however from the materials filed that the C2 Street, Suburb B property was sold in 2016 with a net return of some $145,000 (see exhibit M7 to the husband’s trial affidavit). 

6. The matters in dispute in the case are in my view sufficiently indicated by what was said at Court and it is not necessary to traverse the parties’ trial affidavits further at this point, noting that much of what is contained within them is paraphrased above.  It should be noted that there are significant issues in the case as to family violence and possible abstraction and/or dissipation of funds. 

The Submissions Made and Evidence Given at Court

1. What follows is taken from my notes.  Self-evidently, it is not a transcript but records matters I found significant. 

The Opening and Evidence of the Father. 

1. Counsel opened the case on the basis that it was a small pool.  The family home in Suburb B has been the subject of an appraisal valuing it in the range of $620,000 to $660,000.  It is unencumbered. 

2. The husband is retired and has a Super Fund C valued at $271,000. Cohabitation commenced in 2004 at which time both owned a property. That of the husband was in Town C and that of the wife was in Suburb B. Both were sold soon after cohabitation, that of the husband netting $650,000 and that of the wife netting $202,000. Counsel submitted the husband made the greater contribution. Neither party worked and the wife was in receipt of Centrelink benefits.  The three children are X, 13; Y, 11; and Z, 8.

3. In the fullness of time the parties bought the matrimonial home. The wife lives there with the children. The husband is living in a budget hotel. His income is approximately $1600 per fortnight constituted of $925 superannuation and $680 pension. The hotel costs him $500 a week and he, thus, has around about $275 a week to live on. It is the husband’s case that his contributions provided a springboard effect. Counsel conceded the wife had a bigger claim in respect of future needs. The wife wants to keep the house and the father wants it sold and the proceeds divided fifty-fifty.

4. The father was called and adopted his trial affidavit as true and correct. 

5. Under cross-examination by counsel for the wife the husband said his superannuation was $180,000 at the start of the relationship. He denied having any further relevant documentation as all documents were in the former matrimonial home. He had not been asked to get documents about his superannuation but would ring the superannuation fund that night. He had been unable to undertake a psychiatric test (something that delayed the trial for a considerable period of time) because the wife took all his money. He asked her to give back the $3000 she stole. He had undertaken a drug and alcohol course and does not now drink alcohol.

6. He had read the wife’s trial affidavit. He was drinking a lot at the time and building up his wine cellar. He has not been drinking for two years. He pays rent through his bank account and is not buying alcohol now. He spends money on food and anything he needs. He was not prepared to concede that he was drinking heavily during the latter years of the relationship.  It was put to him that he had a poor and demeaning opinion of the wife but he denied this. Nonetheless, he had described her as “very basic” in the materials. He accused the wife of assaulting him and said she had been charged a number of times.  She had used her fists and used to punch him in the head and punch through walls. He could recall the Department of Health and Human Services interviewing him years ago and recalled the safety plan. He had not had problems with his memory recently. The husband said his house sold for $650,000. When it was put to him that there was no evidence of what his superannuation was worth at the commencement of the relationship he said he recalled $130,000 but was not sure. He has had three to four operations in the last few years, one in respect of the skin cancer and the other two was his aorta. He had undertaken a men’s behaviour change course. When asked if he had received any benefit from it he said “possibly”.

7. He was challenged about paragraph 57 of his trial affidavit in which he denied he had acted in any way that was damaging to his children. The husband said that was not his position now and he might have changed his position since seeing the children. When challenged with paragraph 63, in which the husband deposed to having become recently aware of how his excessive consumption of alcohol impacted the children, the husband said this was just like every male has done. He asked rhetorically, “How would I know if it may have affected my kids?” He went on to say that his behaviour possibly could have been detrimental to the children. He did not concede his behaviour was unacceptable. He loves his children. The husband said he had paid off the wife’s loan on her car but was not sure if he had paid off her personal loan of $20,000. He said no-one had asked him to produce any documents about this and it was 15 years ago. He disputed the recent market appraisal and conceded that there was no valuation to support his figure of $850,000. He disputed the appraisal because he reads the papers every week and follows the real estate market.

8. He was cross-examined about the $145,000 that he says the wife has abstracted.  He was adamant that the wife received all that money.  It was in his CBA Saver’s account but flowed through to her account.  They both got $70,000 and she got his money. 

9. When it was put to him that he had not financially supported his children the husband said that the $160,000 that his partner stole from his account was his support.  He has no more money to give her because she has stolen it all.  (This latter phrase was one he used on repeated occasions).  When this case settled he would have money and he would be supporting his children that way.  All the furnishings in the house he bought.  The $400,000 she got was hers not his.  He conceded that his children will be dependent for quite some years.  He conceded that there would be sale costs in the event that the matrimonial home was sold.  He was aware now that Mr D (the mother’s child from another relationship) is still living with the wife.  He had looked after Mr D from a young age.  He conceded that the wife had no formal skills or training. 

The Evidence of the Wife

1. The wife, who is employed as a casual employee at a business for 15 hours a week and otherwise undertakes home duties, adopted her trial affidavit as true and correct. Counsel put to her in plain terms the allegations that she had stolen money from the husband and the wife flatly denied it. Likewise she denied having $145,000 tucked away as the husband suggested.

2. Under cross-examination by counsel for the husband the wife said that they had both drunk heavily during the relationship.  She denied that she had perpetrated any family violence.  She denied instigating family violence and denied punching or scratching the husband. 

3. When it was put to her that there had been an incident on the balcony where she had told the husband that, “I am going to kill you, you cunt”, and tried to throw him off the balcony, the wife denied this. She conceded however that there was video of the incident and that she was charged and pleaded guilty. She clarified that she was not under the influence of alcohol at the time. She denied telling the husband that she would ask her brother to kill him.

4. The wife confirmed that the husband had a wine cellar and said the wine was still there.  She had not had it valued. 

5. The wife confirmed that she had a property at the commencement of the relationship which was sold soon after for a net value of $202,500.  It was not correct that she had kept these funds.  There was a cheque from the conveyancers in both their names and it was put into a joint account.  All of the money went into that. 

6. It was put to the wife that when the block of land at Suburb B was sold for $145,000 and that she had kept those funds, the wife denied this.  Loans had to be paid off and the money was split but it was safer to put it in her account.  At that point breakdown happened and she wrote a cheque which her solicitors sent to the husband’s solicitors.  She was adamant that he obtained half of the funds. 

7. The wife said her half share had gone to paying solicitors and on day-to-day living together with one holiday. The $4000 she had in her bank account was savings. She was underpaid throughout the year and it was topped up at the end. She works part-time and hopes to increase this as Z gets older. She seeks to keep the house and that the husband keep his pension. The husband pays no maintenance and she has three children to raise.

8. When re-examined, the wife said she had never threatened to kill the husband on the balcony. 

Closing Submissions by Counsel for the Wife.

1. Counsel conceded that there was a small pool and that there had been unequal contributions. The wife has care of the children. It was a 12-year cohabitation and counsel conceded that there were significant contributions by the husband during the relationship. He had also taken on Mr D as part of the family. Counsel submitted that this was not a springboard case. The disparity in contributions had been eroded by the effluxion of time. Counsel pointed out that there were no documents to prove the value of the husband’s superannuation at the commencement of the relationship and likewise no documents to prove his savings of $30,000 at the commencement. The wife admits that the husband paid off her car loan of $17,000 from his savings but denies he paid for the personal loan.

2. Both parties were involved in the care of the children.  Counsel noted that in the family report the father conceded that his actions had damaged the family.  It was put that this was a Kennon & Kennon [1997] FamCA 27 case. There have been three years since separation during which the wife has been the sole homemaker and the wife has sought no support whatever from the husband. These are difficult times for the children as was indicated by the family reports.

3. Counsel submitted there was simply no proof that the wife had stolen any funds from the husband. Annexure C14 and C15 to the wife’s trial affidavit show expenditure between March 2017 and January 2018 by the husband of $12,466 on alcohol. The husband had said this was building his wine collection and counsel submitted this was an unfortunate allocation of resources. The husband should retain his super. Neither parties seek a split. The wife, in any event, would receive no pension until she reached the appropriate retirement age if there was a split. The husband lives on Super Fund C and his Government pension and his income position will not change. He may require capital to pay a bond or furniture.

4. The wife will have sole parental care. There should be a substantial loading to the wife pursuant to s.75(2) of the Family Law Act 1975 (Cth) (“the Act”), noting the problems the children have indicated by the family reports. The husband, himself, says the wife has no skills or training. Her employment prospects are poor. Pursuant to the final parenting orders made the net result at best for the father would be that he would have the children one day per fortnight. Counsel submitted there was no evidence to say the husband’s health was such that he should have any loading. His pension will be increased by the CPI twice per year. He has approximately $41,000 per annum to look after himself whereas the wife has some $49,566.

5. The Court should look at the pool “holistically [sic]”.  It is clear what the pool is, namely, the house and the superannuation.  The wife should get the whole of the house.  In the event that the property were to be sold there would be costs associated which would diminish the pool.  The children are settled in the home and are safe.  

6. Counsel then submitted that in any event the wife should receive $1250 adjustment in respect of the subpoena that the husband’s non-disclosure had caused her to disburse.

Closing Submissions by Counsel for the Husband

1. Counsel submitted that husband had made the greater contribution.  He referred to the case of Pierce & Pierce (1999) FLC 92-844 and submitted there was no erosion. Counsel drew the Court’s attention to the particular facts of Pierce.  Money had been spent on alcohol but both parties drank heavily.  There was top-end wine in the cellar and the wife was in possession.  The Kennon argument was not for the wife but rather for the husband because the wife was convicted of assault. It was a small pool and counsel did not seek to minimise the wife’s argument under s.75(2). There should be a substantial loading for the husband’s initial contributions and counsel submitted that the wife’s position would leave the husband destitute.

Stanford & Stanford

1. The Court’s first task is to ascertain the legal and equitable interests of the parties and determine whether it is just and equitable that there be a property adjustment.  The property pool, in my opinion, is clearly identified as the matrimonial home and the husband’s superannuation.  The parties’ cars are almost valueless.  The parties’ savings are likely wholly trivial and they both, doubtless, face significant legal costs.  The wife’s superannuation is so small as to be irrelevant whereas that of the husband is worth some $271,000 and produces a steady CPI adjusted income stream. 

2. In this case, as was foreshadowed in Stanford itself, the basis upon which the parties conducted their finances has radically altered since separation.  Both parties seek a property adjustment and it is plainly just and equitable that there be one. 

Contributions

1. On any view of the matter the husband made a greater financial contribution to the ultimate outcome that these parties face.  His direct financial contribution appears to have been some $650,000 whereas that of the wife was some $200,000.  Furthermore, he paid off the wife’s $17,000 car loan, although looked at over the passage of time this in my view does not achieve a great significance.  In the matter of Pierce, to which counsel for the husband referred, the Full Court of the Family Court (Ellis, Baker and O’Ryan JJ) said relevantly at [28]:

   In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution.  It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.  In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.

2. Those remarks are all eminently applicable here.  It would seem that although the matter is not entirely clear the contribution of the husband went directly to the purchase of the matrimonial home.  The contribution of the wife appears to have gone into living expenses, renovations and the block of land that was subsequently sold.

3. The funds achieved by the sale of the block of land were received at about the time of separation and I accept the wife’s evidence, which was given with conviction, that she returned half of it via her solicitors by cheque to the husband. 

4. At this point I should perhaps explain briefly why, subject to only one reservation, I comprehensively prefer the evidence of the wife to that of the husband. 

5. The husband was extraordinarily argumentative, self-righteous and aggressive.  On occasions he flatly refused to answer questions put to him and on other occasions he made non-responsive, self-serving assertions.  He was gratuitously insulting to counsel and querulous and was, in my view, clearly minimising his own misconduct during the relationship.  He is plainly obsessed with what he regards as the wife’s stealing from him and he said over and again that she had stolen from him.  He laughed derisively at counsel’s submissions to the Court.  He impressed me very vividly as being insight-less and bullying.  His attitude towards the wife is one of unconcealed disdain.  He impressed me as being all too likely to have been violent during the relationship.  His incapacity to remember may well have much to do with the quantum of alcohol he was consuming at the time.  It is clear from the exhibited material to the wife’s trial affidavit that he was buying very substantial and expensive quantities of wine until 2018.  His assertion that he has been off alcohol for two years is inconsistent with those purchases although I do accept that he is now alcohol-free. 

6. The wife’s evidence was given in a dignified and composed manner and had very much about it what is sometimes described as the ring of truth. 

7. With these findings in mind I will deal with the question of the wife’s Kennon argument. Having observed the demeanour and behaviour of the husband in Court, when one might expect him perhaps to be on his best behaviour, this is plainly a case in which the wife’s role as caregiver and mother was made more onerous by the particular personality and disposition of the husband. One matter I do accept however is that there was, so to speak, violence both ways. The mother was convicted on one occasion which was covered by CCTV coverage and she must have assaulted the husband on that occasion. In this regard I do not accept her denials. However, having said that, the husband’s belittling insults to the wife in his material and in his evidence are only redolent of the matters of which the wife complains in her affidavit. It is appropriate that this matter be given some weight. Counsel for the wife did not posit any particular percentage adjustment and I accept that in the particular circumstances of this case that is appropriate. It is a matter, as the Full Court said in Pierce (albeit in different circumstance), of giving full weight to all the relevant circumstances.

8. A further consideration that needs to be born in mind is that the wife has lived rent free in the matrimonial property, it would seem, both from its purchase and more particularly from the date of separation. That is now some three years of time during which the husband has had to pay rent and she has not.

9. I should finally in the question of contribution deal briefly, as I think I properly can, with the husband’s outlandish assertions of theft. He has produced no documentation that in my view convincingly deals with his assertions. The fact is that the land was sold for $145,000 but I accept that he received in the end $70,000 being half of the net funds available. The wife does not have $145,000 tucked away and she has not stolen any money from the husband. As earlier indicated, I accept the wife’s evidence in this regard.

10. Bearing all these matters in mind, and remembering that this sort of assessment involves to an extent an intuitive calibration, I would assess the contributions of the parties to their current financial situation as being some 65 per cent to the husband and 35 per cent to the wife.  This in my view takes into account the length of the relationship, bearing in mind that neither party worked and that both must have contributed to an extent to the upbringing of the children, balanced against the fact that the one piece of real property the parties owned was largely gained through the much greater financial contribution of the husband.  I have also born into account in arriving at this percentage the Kennon argument which I have accepted on behalf of the wife. 

The Future Needs Factors

1. The wife is in good health and the husband is in poor health.  Counsel for the wife’s submission that there was no evidence to support this conclusion is belied by his client’s own affidavit.  Furthermore, a gentleman who has had a triple bypass in 2014 and the cancer removed from his forehead in 2019, who is aged 67 coming on 68 has a state of health that speaks for itself. 

2. On the other hand as counsel for the husband submits, regrettably this may mean that his future needs may not last as long as one might otherwise have expected. 

3. What one can say with certainty is that the wife has the ongoing care and responsibility for the needs and upbringing of the three children of the relationship.  At the moment she is still responsible to an extent for Mr D but that will not last long given his apprenticeship and age.  The wife’s obligations as a mother are rendered the more difficult by the problems the children have experienced and continue to experience and I accept that her future employment prospects are poor.  She will not be able to expand her 15 hours of work per week at $27 an hour for a long time to come and her prospects of earning much more than the equivalent of that amount must be bleak.  She has no superannuation unlike the husband who has a substantial amount of superannuation. 

4. In all the circumstances, and notwithstanding the husband’s difficulties, I find that there should be a 30 per cent adjustment in favour of the wife in respect of future needs.  The path before her is stark indeed. 

5. The net outcome of these findings will be that there should be a division of the parties’ property 65 per cent in favour of the wife and 35 per cent in favour of the husband. 

Conclusion – Just and Equitable

1. I have given earnest thought as to whether the Court should simply make an order that the wife retain the family home and the husband his superannuation. I accept fully that it would be in the children’s best interests if this were practicable. Nonetheless, in circumstances where the husband has no cash behind him whatsoever, made what was plainly the greater contributions to the parties overall finances in a 12-year relationship, an outcome that effectively leaves him solely with his income, and as the wife would have it a requirement to pay out his various legal bills to disencumber the property, a prospect that counsel for the wife effectively conceded he would not be able to pay, would not be a just and equitable outcome. While this is a small pool, it is not so very small that it is one of those cases where one can legitimately assert that one party should have all of it.

2. In my view, regrettable as it will be, the husband should be entitled to a cash component in addition to his superannuation.  I think that an overall division of the pool 65/35 is indeed just and equitable.  I have formulated draft orders to reflect this conclusion which proceed on the footing that I have allotted a value of $640,000 to the matrimonial home. This is the mid point of the agreed range, and the adoption of this value is a pragmatic one that will give the wife a clear figure to work towards in paying out the husband’s interest. I will hear from the parties if there are any further matters they wish to raise. 

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date:  8 October 2019