Mortimer and Mortimer
[2012] FamCA 974
FAMILY COURT OF AUSTRALIA
| MORTIMER & MORTIMER | [2012] FamCA 974 |
| FAMILY LAW – PROPERTY SETTLEMENT – Institution of proceedings – Application by the wife for leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) to institute property settlement proceedings against the husband “out of time” – Leave not granted – Where leave is not required under s 78 Family Law Act 1975 (Cth) – Where in the alternative the wife and husband together seek declaratory relief under s 78 Family Law Act 1975 to the effect that family home of which they are registered as joint proprietors is beneficially held as to 50 per cent by the wife and 50 per cent by the husband. |
| Family Law Act 1975 (Cth) ss 44(3), 75, 78, 79(4) |
| In the Marriage of Althaus (1982) FLC 91-233; 8 Fam LR 169 In the Marriage of Coghlan (2004) 33 Fam LR 414 In the Marriage of Ferraro (1992) 16 Fam LR 1 In the Marriage of Hickey (2003) 30 Fam LR 355 In the Marriage of Lenehan (1987) 11 Fam LR 615 In the Marriage of Omacini (2005) 33 Fam LR In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712 In the Marriage of Mackenzie (1978) FLC 90-496 In the Marriage of Shewring (1987) l2 Fam LR 139 In the Marriage of Whitford (1979) FLC 90-612; 4 Fam LR 754 In the Marriage of Zyk (1995) 19 Fam LR 797 Mallett v Mallett (1984) 9 Fam LR 449 In the Marriage of Robb (1995) FLC 92-555 In the Marriage of Pierce (1999) FLC 92-844; (1998) 24 Fam LR 377 |
| APPLICANT: | Ms Mortimer |
| RESPONDENT: | Mr Mortimer |
| FILE NUMBER: | PAC | 1003 | of | 2011 |
| DATE DELIVERED: | 23 November 2012 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Loughnan J |
| HEARING DATES: | 1 & 2 November 2012 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Hassans Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Heazlewood |
| SOLICITOR FOR THE RESPONDENT: | Longman Hill Solicitors |
Orders
The wife’s application for leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) to institute proceedings under s 79 of that Act is refused.
The Court declared pursuant to s 78 of the Family Law Act 1975 (Cth) that the parties own the property at B Street, C Town (being the whole of the land comprised in Folio Identifier …) as joint tenants.
The parties are to forthwith do all acts and things to cause the said property to be sold and upon a sale the net proceeds thereof to be paid as to 50 per cent to the wife and 50 per cent to the husband.
Unless the parties otherwise agree in writing, the agent’s commission in relation to a sale of the property, solicitors cost on sale and all other costs associated with such sale be paid by the parties out of the proceeds of sale, prior to any distribution to either of them pursuant to order 3.
On and from the date hereof the wife shall indemnify the husband save him harmless from and against:
5.1any instalments due to the Westpac Bank in respect of the mortgage over the property; and
5.2 any liability in respect of the payment of rates and taxes.
Each party shall retain to the exclusion of the other of all property and/or bank accounts in their name and/or their entitlement to superannuation, to the exclusion of the other and other than as specifically referred to in these orders, each of the parties is hereby declared to be the sole owner of such property.
Leave is granted to the parties to restore the proceedings in relation to the wording of these orders, the choice of a selling agent, the solicitor to act on the sale and any other term or condition of sale or machinery orders within 28 days from the date of these orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mortimer & Mortimer has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 3001 of 2011
| Ms Mortimer |
Applicant
And
| Mr Mortimer |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms and Mr Mortimer married in February 1993 and separated in mid-January 1994. The wife seeks orders for property settlement and for leave to bring those proceedings out of time. The husband opposes those orders. Although the parties are divorced, for convenience I will refer to them as the wife and husband.
Applications
In accordance with a Minute of Orders provided to my chambers by email on 23 October 2012, the wife sought the following orders:
1. That leave of the Court be granted to make this application out of time pursuant to the provisions of Section 44(3) of the Family Law Act 1975.
2. That this Honorable Court adjust the proprietary interest of the parties as regards their pool of assets pursuant to the provisions of section 79 of the Family Law Act as is just and equitable in the circumstances of this case.
3. That all the furniture and other chattels in the matrimonial home be retained by the wife for her own use and benefit absolutely.
4. That unless otherwise specified in these orders any joint tenancy of the husband and wife in any real or personal estate is hereby expressly severed.
5. That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
6. That the orders below have effect from the operative time:
a) That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975 as amended, whenever a splittable payment becomes payable in respect of interest in the D Pty Ltd superannuation fund, the wife is entitled to a base amount as determined by appropriate valuation and there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made out of these orders;
b) That, having been accorded procedural fairness in relation to the making of this order, this order binds the Trustee of the superannuation fund;
c) That operative time for this order is four (4) business days after the date of service of the orders on the Trustee of the superannuation fund.
The wife’s solicitor submitted a Minute of Orders[1] on the morning of the second day of the hearing. The Minute contained the following:
[1] Exhibit 2.
1. That leave of the Court be granted to make this application out of time pursuant to the provisions of Section 44(3) of the Family Law Act 1975.
2. That in accordance with the provisions of Section 79(2) of the Family Law Act 1975 the assets pool of the marriage of Mr Mortimer (husband) and Ms Mortimer (wife) solemnised in 1993 and dissolved on 11 February 2005 be divided in the following manner:‑
a) That the agreed value of $220,000 of the matrimonial home known as B Street C Town in New South Wales 2790 be divided equally between the parties so that the share of each party equals $110,000;
b) That in respect of the half share of the wife of the agreed value of the home, an amount of $75,000 be added back to it representing moneys the husband had wrongfully used for his own purpose ;
c) That a further sum of $18,000 be added back to the share of the wife, representing moneys the husband had redrawn from the home loan account without the consent or approval of the wife and
d) That the total share attributed to the wife consequent upon the division of the assets pool in the afore-mentioned manner is equal to the sum of $203,000.
3. That in respect of the outstanding mortgage debt on the matrimonial home of $147,000, each party is responsible to pay for half of such outstanding mortgage debt as at the date of these orders equivalent to $73,500.
4. That the joint tenancy of the matrimonial home is hereby expressly severed.
5. That the husband forthwith transfers his rights and title in the matrimonial home to the wife for the sum of $17,000, being the difference between the agreed value of the home less the wife's share in accordance with Order 2(d) herein. This sum is payable by the wife to the husband within 6 months of the date of these orders.
6. That the husband continues to pay his half share of the current monthly mortgage instalment of $525 to the Westpac Banking Corporation on the 25th day of every calendar month and that this and other future payments will be deducted from the amount he is liable to pay in accordance with Order 3 herein.
7. That in the event the husband fails to pay his share of the mortgage debt pursuant to these Orders the amount outstanding on that share as at the date of such default shall immediately become payable and shall be treated as liquidated damages payable on demand by the wife.
8. That the parties hereto shall equally pay the outstanding arrears of the instalment mortgage payments equivalent to $6,000 to Westpac Banking Corporation within 3 months of the date of these orders.
9. That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
10. That all furniture and other chattels in the matrimonial home be retained by the wife for her own use and benefit absolutely.
11. That the orders below have effect from the operative time:
a) that in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975 as amended, whenever a splittable payment becomes payable in respect of interest in the D Pty Ltd superannuation fund, the wife is entitled to a base amount as determined by appropriate valuation and there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made out of these orders;
b) That, having been accorded procedural fairness in relation to the making of this order, this order binds the Trustee of the superannuation fund;c) that operative time for this order is four (4) days after the date of service of the orders on the Trustee of the superannuation fund.
In accordance with a Case Outline provided to my chambers by email on 31 October 2012, the husband sought the following orders:
1.That the wife cause mortgage to Westpac Bank in respect of the property B Street, C Town and being the whole of the land comprised in Folio Identifier … (hereinafter referred to as the property) to be discharged.
2.That simultaneously with the discharge of the mortgage referred to in Order 1 hereof, the husband transfer all his right, title and interest in such property to the wife.
3.In the event that the wife is unable to cause the said mortgage to Westpac Bank to be discharged, then the parties do all acts and things necessary to cause the mortgage to be discharged within 42 days of the date hereof then the parties do all acts and things to cause the said property to be sold and upon a sale the net proceeds thereof be paid to the wife.
4.That the agent’s commission in relation to a sale of the property, Solicitors costs on sale and all other costs associated with such sale be paid by the parties out of the proceeds of sale.
5.That the wife may choose the selling agent, the Solicitor to act and any term or condition of sale and the husband shall do all acts and things necessary to enable a sale to be affected.
6.On and from the date hereof the wife shall indemnify the husband save him harmless from and against:-
6.1.Any liability to Westpac Bank in respect of the mortgage over the property;
6.2.Any liability to pay any further mortgage payments in respect of the said mortgage;
6.3.Any liability in respect of the payment of rates and taxes.
7.Each party shall retain to the exclusion of the other of all property and/or bank accounts in their name and/or their entitlement to superannuation, to the exclusion of the other and other than as specifically referred to in these Orders, the parties are hereby declared to be the sole owner of such property.
8.That the wife pays the husbands costs of and incidental to these proceedings.
In the course of final submissions the husband’s counsel sought leave to make an oral application for orders to be made in the event that the wife’s leave application was unsuccessful. In that event, the husband sought a declaration under s 78 to the effect that the parties each have a 50 per cent interest in B Street, C Town (“the property”) and then for consequential orders in accordance with a document titled “Alternative Final Orders Sought by Husband” as follows:
1.In the event leave is not granted pursuant to s 44(3) the parties do all acts and things to cause the said property to be sold and upon a sale the net proceeds thereof be paid as to 50% to the wife and 50% to the husband.
2.That the agent’s commission in relation to a sale of the property, solicitors cost on sale and all other costs associated with such sale be paid by the parties out of the proceeds of sale.
3.Liberty to apply in relation to choice of a selling agent, the Solicitor to act and any term or condition of sale.
4.On and from the date hereof the wife shall indemnify the husband save him harmless from and against:-
4.1Any liability to Westpac Bank in respect of the mortgage over the property.
4.2Any liability to pay any further mortgage payments in respect of the said mortgage;
4.3Any liability in respect of the payment of rates and taxes.
5.Each party shall retain to the exclusion of the other of all property and/or bank accounts in their name and/or their entitlement to superannuation, to the exclusion of the other and other than as specifically referred to in these orders, the parties are hereby declared to be the sole owner of such property.
6.That the wife pays the husbands costs of and incidental to these proceedings.[2]
[2] Exhibit 5.
Through her solicitor the wife did not oppose leave being granted for the making of that oral application and she consented to the s 78 declaration sought by the husband in the event that her application for leave was unsuccessful. I understood from her solicitor’s submissions that in that event, the wife may wish to be further heard in relation to the wording of the consequential orders, for example to provide her with an opportunity to purchase the property if it is to be sold and to make plain that an indemnity in a form such as paragraph 6 of exhibit 5 would be expressly limited to the recurrent mortgage instalments that might fall due pending sale. I indicated that those amendments might not be necessary to achieve the stated aims but if the circumstances arose I might make the orders but express them to be subject to contrary agreement between the parties or further order of the Court and would give leave to the parties to apply.
Documents read
The wife relied on the following documents:
Affidavit of Applicant, sworn on 01/03/2011 and filed 08/03/2011;
Affidavit of Applicant, sworn on 09/06/2011 and filed 14/06/2011;
Affidavit of Applicant, sworn on 05/08/2011 and filed 08/08/2011;
Affidavit of Applicant, sworn on 11/01/2012 and filed 23/01/2012;
Affidavit of Applicant, sworn on 19/03/2012 and filed 26/03/2012;
Financial Statement of Applicant, sworn on 24/02/2011 and filed 8/03/2011;
Updated Financial Statement of Applicant, sworn and filed 8/10/2012.
The husband relied on the following documents:
Affidavit of Mr Mortimer filed 23 May 2011;
Affidavit of Mr Mortimer filed 5 September 2012;
Financial Statement of Mr Mortimer filed 23 May 2011;
Financial Statement of Mr Mortimer filed 6 September 2012.
Short History
The husband was born in 1957 and is currently 55 years of age. The wife was born in 1961 and is currently 51 years of age. The parties commenced cohabitation in January or February 1993. The parties were married in 1993 and they separated in 1994. They were divorced with effect from 11 February 2005.
Children
There are no children of the marriage. The wife has two adult children from a previous relationship, Ms E, born in 1983 and Mr F born in 1986.
The Hearing
The hearing was listed for two days. At the conclusion of submissions, leave was sought and granted to the husband to make an oral application through his counsel for an order varying order 3 of the orders made on 19 August 2011 to provide that, forthwith and until further order, the wife alone be responsible for the mortgage instalments on the property as and when they fell due. The wife’s solicitor said that the order was not opposed and for reasons given at the time, I made that order.
Background Facts
On 23 June 1989 the wife’s first husband, Mr G died.
In June 1991 the husband moved from Muswellbrook to C Town. The parties met in July of that year and commenced a relationship in 1993.
The wife purchased H Street, C Town in December 1991 and sold it in 1993 for $85,000.00.
The husband and wife signed a mortgage to the Westpac Bank to obtain funds to purchase B Street, C Town in December 1992.
The parties purchased the property in joint names for $106,000.00 with a mortgage obtained from Westpac Bank for $48,000.00.
The parties separated in January 1994 when the husband left the property.
On 13 April 1994 the Westpac Bank agreed to increase the parties’ personal loan to $18,000.00 to assist the parties with refinancing existing debts.
On 2 November 1994 the Westpac Bank agreed to increase the parties’ personal loan to $26,800.00 to assist the parties with “changeover of motor vehicle”.
On 22 December 1995 the Westpac Bank agreed to advance the parties $86,000.00 by way of a home loan secured on the property (made up of two components - $21,000.00 and $65,000.00) to consolidate existing loans and allow for the purchase of a second hand motor vehicle.
In 1996 the husband’s employer relocated him to Hong Kong for three months.
On 29 January 1997 the husband purchased a motor vehicle at an initial cost of $29,497.00. The purchase was funded by him, with credit.
In December 1998 Ms M valued the property at $110,000.00 and on 17 January 1999 the Westpac Bank agreed to advance the parties $88,000.00 by way of home loan secured on the property for the purpose of refinancing.
In 2000 the husband began employment with N Pty Ltd.
In 1998 the wife’s son Ms E moved out of the property and went to live with his grandparents. In about 2001 or 2002, when she was about 15 years of age, Ms F moved out of the house to live with a boyfriend.
Ms F moved back into the property in 2003 and at her request the husband bought her a bed at a cost of $520.00. He delivered and set up the bed.
In September 2003 the husband purchased motor vehicle 2 and borrowed $24,957.00 for that purchase. The husband traded in motor vehicle 2 on the vehicle.
On 31 December 2004 the Westpac Bank agreed to advance the parties a further $75,000.00 by way of the home loan secured on the property thereby bringing the balance of the mortgage from $77,554.00 to $162,554.00. The loan application cited the reason for the increase as “to consolidate existing loans.”
On 4 January 2005 a redraw was undertaken in respect of mortgage to pay out the Esanda loan associated with motor vehicle 2 and the American Express credit card in the husband’s name.
On 21 January 2005 a psychiatrist treated the wife for “a psychiatric illness” and she was “unfit for work” for the following three months.[3] The wife commenced receiving a Disability Support Pension.
[3] Page 130 of the annexures to the wife’s affidavit filed 23 January 2012.
In 2005 the husband offered a property settlement however the wife refused.
The parties were divorced in the Federal Magistrates Court at Parramatta with effect from 11 February 2005.
On 26 May 2005, motor vehicle 2 was first registered in the name of the wife.
In August 2005 and at her request but at his expense, the husband took the wife to O Town for a week’s holiday. On that same basis, in January 2006 the parties spent 3 days at a motoring event in Canberra.
In September 2006 the husband purchased J Street, K Town for $257,000.00, and borrowed for that purpose without relying on the C Town property for security.
Since 2007 Ms L, the daughter of friends of the husband and her children have lived with him in K Town.
The wife says she commenced paying council rates for the property in 2008.
After separation and until 2009 the husband returned to the property from time to time to undertake motor vehicle and property maintenance, such as mowing the lawns.
In early 2009 the husband replaced the bath at the property at the wife’s request. He purchased the bath, tiles and a new vanity unit for the bathroom. It is submitted in the wife’s case that thereafter, the husband was not permitted to undertake “more maintenance” at the property.
In 2009 the wife informed husband that she sold motor vehicle 2 for $3,000.00.
It is the husband’s evidence that in 2010 he offered the wife the entire net proceeds of the property on sale. He said that she asked for that proposal in writing. On 27 May 2010 the husband signed a Statutory Declaration[4] which apart from the formal parts contained the following:
That all monies left after paying out the mortgage legal fees and real estate fees will be given to [Ms Mortimer] on the condition that the property [B Street C Town], New South Wales is sold within the next 12 months or before 28 May 2011.
[4] Annexure B to the wife’s affidavit sworn 19 March 2012.
For about eight months in about 2010, a man whose first name was P lived with the wife at the property.
The wife swore that in November 2010 she learnt for the first time that the property was in joint names. The husband told the wife that if they could not reach a property settlement agreement he would cease mortgage payments in January 2011, which he did.
On 8 March 2011 the wife commenced these proceedings by filing an Initiating Application seeking Final Property Orders together with an interim order that husband continue to make Westpac Bank payments.
The Westpac Bank issued a default notice pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) on 8 April 2011 and on 14 April 2011 the Bank advised it would suspend further action pending investigation.
The wife commenced a relationship with her current partner, Mr Q. He lives with her at the property. The wife said that the relationship commenced in June 2011.[5] The wife was asked in cross-examination whether she was living with Mr Q when she swore her earlier Financial Statement on 24 February 2011 and she refused to answer on the basis that it might incriminate her. Mr Q is casually employed and earns $1,951.00 per week.
[5] See the note to the wife latest Financial Statement.
On 21 April 2011 the wife swore a Statutory Declaration in which she alleged that her signatures on some mortgage or loan documents were forged.
On 14 June 2011 the wife filed an Amended Initiating Application seeking the transfer of the property.
The husband asserts that he ceased carrying out property maintenance and mowing the lawn at the property on 4 July 2011.
On 8 August 2011 the wife filed an Application in a Case.
On 19 August 2011 the Court ordered, among other orders, the parties to each pay $525.00 per month to Westpac Bank in respect of mortgage on the property.
Credit and Submissions
The evidence of the witnesses
Although I detected no attempt by her to mislead the Court, the wife was not a credible witness. It is the wife’s evidence that she has a poor memory and her evidence in cross-examination was consistent with that proposition. For example, she struggled to remember the first name and could not recall the last name of a man with whom she lived for eight months in about 2010. Although she has declared and sworn that signatures on various financial documents are not hers and represented to a bank and to the police that the signatures are forgeries, it is ultimately her case and her evidence that the signatures in question could be hers. She deposed to having no knowledge of certain borrowings but the effect of her cross-examination is that she does not recall whether she was involved or not. Although no mention was made of it in her affidavit sworn 1 March 2011, she later deposed that she was unaware the C Town property was in joint names until 2010. However, her evidence in cross-examination was to the effect that “at some level” she must have known of the joint ownership before 2010. Because of the bank records a concession of that type was necessary but the impact on her credit is severe. The wife deposed that she “never talked to nor met any of the bank’s staff responsible for making loans using the matrimonial home as collateral.” In cross-examination the wife conceded that it was possible that her signatures on loan applications which were witnessed by bank officers and at bank premises. I suppose there is a nice argument as to whether the witnesses were staff “responsible for making loans” but there is no doubt that the wife has made inconsistent representations on the issue of her knowledge of and involvement in borrowings secured on the property after the initial home loan in 1992. At best, the wife simply does not know. At worst, her not knowing of the joint ownership of the property is a matter of recent invention.
Presumably the wife had no memory difficulty when she refused, on the basis of self-incrimination, to answer a question about whether Mr Q was living with her in February 2011.
I should record that particularly on the first day of the hearing, the wife presented in the witness box as quite unwell. She was asked about that and responded to the effect that she was very stressed or anxious about the proceedings. She did not take the offered opportunities of a pause in the proceedings and asked that her cross-examination continue. I must also record that to my observation, learned counsel for the husband was sensitive to the wife’s presentation and while seeking to address relevant issues, did nothing to unnecessarily exacerbate her discomfort.
The cross-examination of the husband occupied only 45 minutes. Although his cross-examination was not extensive, there was no suggestion that the husband was other than a good witness. Few aspects of his written evidence were challenged, he was not successfully challenged on any factual issue and his oral and written evidence were consistent.
In the unusual circumstances of this case, wherever the evidence of the parties’ conflicts about a matter in respect of which each is able to give probative evidence, I prefer the evidence of the husband.
The approach in proceedings for leave to bring proceedings under section 79 out of time
The effect of s 44 of the Family Law Act1975 (Cth), as it is relevant to these proceedings, is that:
· the wife requires the leave of the Court to bring property settlement proceedings because more than 12 months elapsed since the parties’ divorce became effective; and
· leave must not be granted unless the wife satisfies the Court that hardship would be caused to her or the husband if leave is not granted.
The case law reveals that hardship in the context of s 44 relates to the inability to pursue a claim. The quality of claim required can depend on the circumstances of the case. If hardship is established then matters such as there being an adequate explanation for delay and the competing prejudices to the parties of granting or refusing leave, can be taken into account in deciding whether to grant leave.
From the decision of the Full Court in In the Marriage of Whitford (1979) FLC 90-612; 4 Fam LR 754, which includes a review of authorities, there are the following propositions:
Hardship
· The loss of the right to institute proceedings of itself, is not the hardship to which the subsection refers. It is the consequences of the loss of that right, with which the subsection is concerned.
· If there is no real probability of success if the substantive application were heard on the merits, then the Court cannot be satisfied that hardship would be caused if leave were not granted.
· The meaning of ''hardship'' in s 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment. Cf. the meanings assigned to ''hardship'' in the Shorter Oxford Dictionary and in Webster's New International Dictionary. See also In the Marriage of Mackenzie (1978) FLC 90-496.
· In ordinary parlance, hardship means something more burdensome than ''any appreciable detriment''. The word should have its usual, though not necessarily its most stringent, connotations.
· It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense.
· As a general proposition it might be said that the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, generally will not cause hardship. Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted. The sections do not otherwise require that the right or entitlement lost must be a substantial one.
· In an appropriate case, and depending on the circumstances of the applicant or the children, hardship may be caused by the loss or deprivation of something which is of comparatively small money value. In some cases it may be a great hardship to an applicant if he or she is unable to gain something worth $1,000.00 or even less, whilst in other cases something of that value may be considered trifling.
· Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances.
· Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship. In some cases, where a resolution of the property or financial relationships of the parties is desired, it might be, that the applicant would receive no more or even less, than he or she already owns at law or in equity. Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such resolution.
Discretion
· Such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant's case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.
· On the other hand, ss 44(3) and 44(4) point to the conclusion that the legislature intended to confer power on the Court to grant leave to institute proceedings in order to avoid hardship. Having regard to the nature of the jurisdiction which this Court exercises, this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the divorce.
Those propositions have been differently expressed by courts over the years but have not been substantially challenged. It has been held that the extent of the hardship may outweigh an inadequate explanation for delay.[6]
[6] In the Marriage of Althaus (1982) FLC 91-233; 8 Fam LR 169.
Discussion
Most of the authorities resulted from proceedings where leave was sought in a separate and preliminary hearing. Before me the hearing has addressed both the application for leave and, in the event that leave is granted, for property settlement. In such a hearing it necessarily follows that all of the evidence on both issues is presented and tested prior to a decision being made. There is no need to speculate on the prospects of success of the applicant’s property settlement claim; I am in a position to know whether the claim would be successful or not.
In my view the wife has not made a case for leave.
As to hardship, the first point to make is that the orders sought by the wife are unworkable. Requests were made by the husband’s counsel and the Court for the wife’s claim to be crystallised in a proper form. Ultimately that could not be achieved. The orders set out in exhibit 2 contain a proposed splitting order with no specified base amount and orders in relation to the property that are unworkable and or in any event are not in a form that would be granted.
The argument might be that there is no hardship in not being able to prosecute a case for orders that would never be made. Counsel for the husband raised this issue in his oral submissions but did not press the matter, going on to address the substance rather than the form of the relief sought by the wife. Understandably, there was no demur on behalf of the wife, to that approach. Although I have a residual concern that there may be something in the argument, it is not necessary for me to address the issue.
On the basis of the guidance from Whitford above, in my view the wife needed to demonstrate that she had a property settlement case for a division which would be more advantageous to her than her current legal entitlement by a margin greater than her costs of these proceedings.
The first step is to identify what the outcome would be if there are no orders under s 79.
The parties settled a balance sheet and it was filed on 31 October 2012. The balance sheet has the C Town property at an agreed value of $220,000.00 and the mortgage at $147,537.00. Therefore, on the balance sheet the property represents a net asset of $72,463.00. That of course does not allow for any sale costs. Subject to the costs of sale of the C Town property, based on the agreed balance sheet, the outcome at general law would leave the wife with:
Assets
Value
One half of the value of B Street, C Town
$36,231.50
Motor vehicle 3 $3,000 Westpac credit card -$2250 GE Money loan -$2709 Total Net Assets
$34,272.50
The wife’s costs are $19,902.00.[7] Therefore, in order to demonstrate hardship, the wife would need to make a case that would achieve an outcome of more than trifling value, greater than $54,174.50.
[7] Costs advice document dated 31 October 2012 – exhibit 1.
As to the wife’s claim - the orders sought by the wife are unworkable but her solicitor said she wants to achieve:
· a superannuation split based on 20 per cent of the husband’s superannuation. For this purpose I will assume the interest has a value of $152,381.00 and therefore that the relevant base amount would be $30,476.20;
· orders whereby she would retain the property by paying the husband $17,000.00 and the Westpac Bank $73,500.00. Therefore the wife wants to retain the property at a net value to her of $129,500.00. I take it that the wife otherwise seeks to retain her assets and debts.
On my calculations that would leave the wife with a right to superannuation interest based on $30,476.20 of the husband’s superannuation interest, as at the operative date of the order, together with:
Assets
Value
B Street C Town less $17,000.00 to the husband and $73,500.00 to Westpac Bank
$129,500.00
Motor vehicle 3 $3,000.00 Westpac credit card -$2,250.00 GE Money loan -$2,709.00 Total Net Assets
$127,541.00
In my view, the wife does not need to justify that case in order to enliven the discretion to grant leave. As I have indicted above, in order to demonstrate hardship, the wife would need to make a case that would achieve an outcome of more than trifling value, greater than $54,174.50. The wife is a person of modest means. I am satisfied that if she was prevented from making that case, then she would suffer hardship.
I then turn to the wife’s case for property settlement:
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79, involving four inter-related steps. First, I make findings as to the identity and value of the property, liabilities and financial resources of the husband and wife at the date of the hearing. Second, I identify and assess their contributions within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the husband and wife expressed as a percentage of the net value of the matrimonial property. Third, I identify and assess the relevant matters referred to in s 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 established at step two. Fourth, I should consider the effect of those findings and determinations and identify orders that are just and equitable in all the circumstances of the case.[8]
[8] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370.
There is no mention of steps in s 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.[9]
[9] Ibid.
The property of the husband and wife at the date of the hearing
The Court is required to make a finding as to the property of the husband and wife. That involves identifying assets, liabilities and financial resources and their values.
There are circumstances whereby assets can be included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into
account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
In her Financial Statement the wife included household contents at $15,000.00. The husband disclosed his household contents at $2,000.00. For reasons that I was not told about, those assets were omitted from the joint balance sheet. Nevertheless, at the point of final submissions the agreed balance sheet was as follows:
Assets
Value
B Street C Town $220,000.00 J Street, K Town $270,000.00 Motor vehicle 3 $3,000.00 Motor vehicle 4 $15,000.00 Motor vehicle 5 $8,000.00 N Pty Ltd $2,300.00 Total Gross Assets
$518,300.00
Addbacks
Addback
Value
Moneys redrawn from the Home Loan account with Westpac Bank $93,790.00 Total
$93,790.00
Liabilities:
Liabilities
Value
Mortgage of B Street, C Town – joint $147,537.00 Mortgage of J Street, K Town – husband $296,321.00 G.E. Line of Credit – husband $8,338.00 Bank West credit card- husband $19,150.00 St George Personal loan – husband $13,138.00 Leasing finance– husband $28,811.00 Westpac credit card – wife $2,250.00 GE Money loan – wife $2,709.00 Total
$518,254.00
Superannuation
The superannuation interest is as follows:
Superannuation
Value
D Pty Ltd – Husband $152,831.00 Total
$152,831.00
Financial Resources
There is no evidence of financial resources.
Discussion
The contentious issues about the balance sheet were the wife’s claim for add backs for borrowings that should be visited only on the husband, and the approach proposed by her of ignoring some assets and liabilities.
Add-backs
As I understand the wife’s case, she asserted that $93,790.00 should be added back to the list of available assets because the husband wasted those funds or applied them to his own purposes. The wife cannot make that case. It follows that all of the extensions to the mortgage debt required the wife’s consent. The wife does not now assert that the signatures on the various documents are not hers.
As to the components of the increases in debt, the attempt to make a case through cross-examination of the husband was counter-productive. The husband was not challenged at all in relation to his evidence in his later affidavit about the history and purposes of various loans. The wife’s solicitor did take the husband to a sequence of personal loans taken out by him from 2000. Of those loans the only source documents in evidence are the documents relating to the initial loan for $10,000.00 in about November 2000. The wife’s case that the loan was for the sole purposes or benefit of the husband quickly disappeared as it became apparent that the loan was for renovations to the C Town property which were undertaken at the request of the wife. The evidence for those propositions did not solely rest on the husband’s testimony. The loan was for the stated purpose of home renovations[10]. The only home in which the husband then had any interest (and therefore any right or likely inclination to undertake renovations), was the C Town property. In re-examination he said that the loan was for the installation of a swimming pool and the erection of a pergola at the property. Thus the initial advance in this sequence of personal loans was to renovate the property which the wife occupied to the exclusion of the husband. The renovations were solely for the benefit of the wife. Lest it be thought that the renovations might have added value to the property, and thereby benefited the husband as joint owner, again at the wife’s request, the husband later arranged to have the swimming pool removed from the property.
[10] Exhibit 3 – a copy of the loan application form on which the husband was cross-examined and which was admitted into evidence at the request of the husband’s counsel and over the objections of the wife’s solicitor.
The application forms in relation to subsequent increases in the personal loan in 2001, 2002 and 2003 were not put into evidence. The husband said that the increases were for financing a motor car or wagon; for refinancing and a holiday. It was put to the husband that those purposes were for his benefit alone and he disagreed.
Many cars were bought by the parties over the years. I take it that the wife’s case is that she did not benefit from most or many of the motor vehicles and that where the cost of those vehicles contributed to the joint debt, whether by way of personal loan, mortgage or line of credit, the husband alone should be responsible for those costs. The wife cannot make that case. The wife herself put into evidence the official record of her ownership of motor vehicles[11] which refers to 20 vehicles registered in her name from 5 September 1990 to 12 October 2011. At some times she owned more than one vehicle. The most recent vehicle on the schedule is different to the wife’s current car. Therefore I take it that she owned at least one and perhaps more further vehicles since 12 October 2011. Many of the additional borrowings that found their way into the mortgage were for the purpose of updating motor vehicles. In his Affidavit in Response filed 5 September 2012 the husband detailed the joint borrowings that funded most, if not all, of the motor vehicle purchases undertaken for the benefit of the wife. He was not challenged in relation to that evidence.
[11] Page 116 of the annexures to the affidavit of the wife sworn 11 January 2012 – a letter from the NSW Roads and Traffic Authority prepared at the wife’s request.
In her case the wife specifically raised by way of complaint, the husband’s purchase of motor vehicle 2. In September 2003 the husband purchased motor vehicle 2 and borrowed $24,957.00 for that purchase. It is the husband’s evidence that the car was bought at the request of the wife, that he told her that in order to buy the vehicle he would need to borrow money. It is his evidence that at all times, she had the use of the vehicle. The husband traded in motor vehicle 1 on the vehicle. The husband gave evidence that motor vehicle 2 was necessarily initially registered in his name because he borrowed the money for the purchase. The husband was taken in cross-examination to a comment in a motoring article (put into evidence in his case) where he was interviewed about the similarities of motor vehicle 2 and another popular make and model of motor vehicle. In the article, the husband was quoted as driving the car from time to time. He was asked during his cross-examination how that would be if the wife had the use of the car. The husband responded to the effect that he attended at the property from time to time to perform maintenance, including car maintenance and he drove that and other cars on those occasions. The husband was not challenged on that explanation and the wife did not give conflicting evidence to that of the husband. The only available finding is that the debt associated with the motor vehicle 2 was a debt incurred at the wife’s request, with her approval and from which the wife alone received benefit.
Life does not stop with separation and here the parties allowed the best part of 20 years to go by before seeking to disentangle their financial affairs. It follows that they engaged in expenditure over those years, including expenditure on real estate, personalty and living expenses. A clear case needs to be made before funds that do not exist are included or debts that do exist are ignored, in establishing the pool of assets for division. The reason is obvious. The greater the departure from the true position, the more artificial the argument becomes and the greater the risk of an inequitable result.
The wife has not made a case for adding back any sum.
The exclusion of some assets and liabilities
The notes to the agreed balance sheet and the submissions made on behalf of the wife reveal an argument that the K Town property and the associated debt, and indeed, all of the other liabilities save for the mortgage over that property, should be ignored in identifying the relevant pool of assets for division. It may even follow from the proposals of the husband made in 2010, that he was willing, at least at that time, to countenance such an approach. I was not told of any current agreement between the parties, in the event that leave is given to commence proceedings, to take that approach. In those circumstances, I would not take the approach proposed by the wife. As is referred to above, good reason is needed to ignore an existing asset or a debt.
As to the K Town property, there is no suggestion that the husband was imprudent or wasteful in the sense summarised in Omacini (above) in buying that property. He purchased the K Town property 12 years after separation, having lived with friends or family, in hotels and motels and otherwise relying on the rental market. In light of the mortgage on that property, it has a negative value. So be it. Presumably, but for that purchase, the husband would have paid tens of thousands dollars in rent over the six years since he bought the K Town property. If I ignore the property and its associate debt, do I assume that there would be a notional debt to the extent of that rent? There is no basis for ignoring the K Town property and the associated borrowing.
Net assets
Therefore net assets have a value of $152,877.00 of which $46.00 is in the form of non superannuation assets and $152,831.00 is a superannuation interest.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[12] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties to the marriage in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties.[13]
[12] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1.
[13] In the Marriage of Shewring (1987) l2 Fam LR 139.
As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that:
… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.
Here the parties did isolate superannuation interests for the purposes of applying s 79(4) to the assets. For example, the husband would in effect have his superannuation excluded from the calculations. The wife seeks a different division of superannuation to that proposed for the non-superannuation assets, based on a significant imbalance in contributions, favouring the husband. If I understand the counsel of the Full Court in Coghlan, correctly, I am therefore required to adopt the same approach and to consider the superannuation assets separately.
Contributions to non superannuation assets
Section 79(4)(a) Contributions
The wife made the only initial contribution. Neither of the parties has identified what assets or debts they had before their marriage.
There is an untold story about the wife’s finances prior to the marriage. It is her evidence that she inherited $160,000.00 from her first husband and applied the whole sum to pay out the mortgage on her R Town property. She sold that property for $81,000.00 and cleared about $79,400.00.[14] The wife purchased a small house in H Street, C Town, for $85,000.00.[15] The wife sold the H Street property to M & M S on 16 December 1992 for $84,000.00. Initially it was the wife’s evidence that this sum was applied to the purchase of the property. She later agreed with the husband’s evidence, to the effect that she contributed $82,000.00 towards the purchase.
[14] Page 19 of the annexures to the wife’s affidavit sworn 11 January 2012 – settlement statement from the wife’s R Town solicitor dated 7 May 1990.
[15] Annexure B2 to the wife’s affidavit sworn 1 March 2011 – RP Data showing a sale by M T to the wife on 8 March 1991 for $85,000.00.
At best, the initial contribution of the wife was of the order of $82,000.00. I say ‘at best’ because by borrowing more than they needed to buy the property, the parties turned that deposit into an equity of only $58,000.00 ($106,000.00 purchase price - $48,000.00 mortgage). The advocates agreed that there is no evidence on the basis of which I can find how much each of the parties owed of the debts that were discharged by the additional borrowing. For the wife’s initial contribution to be $82,000.00, all but an insignificant percentage of the borrowings had to be those of the husband. I cannot make that finding.
As with the husband, there was a contribution by the wife in initially taking on the mortgage obligation but it was not until after the order of 19 August 2011 that the wife in fact paid anything towards the mortgage and then, she only paid one half.
The wife does not identify any other financial contributions made by her.
It is the unchallenged evidence of the husband that he paid over $180,000.00 in mortgage instalments until May 2011. He estimated that to the same date he paid in excess of $19,200.00 in rates and in excess of $10,800.00 in insurance premiums. The husband resumed paying half the mortgage in August 2011 at over $500.00 per month.
The husband transferred $10.00 per month into the wife’s mobile phone until the end of 2008.
In 2002 the husband paid $2,000.00 for a new hot water service for the property. In 2005 the husband paid $2,700.00 to repair and paint the roof of the property. In 2009 the husband paid $300.00 for a bath and $700.00 for tiles for the bathroom at the property.
At the wife’s request, but at his cost, the husband took the wife on a holiday to O Town in 2005 and to Canberra in 2006.
The husband made the greater financial contribution.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
The wife does not identify any non-financial contributions made by her.
The husband worked on the property from time to time. The husband arranged the installation and the subsequent removal of the swimming pool. He installed the new bath in 2009. The husband maintained the wife’s motor vehicles in that he performed grease and oil changes on those vehicles.
The husband’s non-financial contributions exceeded those of the wife.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
There were no children of the marriage. The only contributions to the wife’s children that are relevant to the proceedings are those of the husband.[16] I will address his contributions to the children under section 75(2)(o) below.
[16] In the Marriage of Robb (1995) FLC 92-555.
The parties cohabited for about 12 months. That was the only opportunity for homemaker contributions to be made. Even then there is no probative evidence from the wife about her homemaker contributions. I asked the wife’s solicitor to take me to her evidence about that and he took me to paragraph 6 of the wife’s affidavit sworn 19 March 2012 which says in part: “and I was a house-keeper as well as looking after my two young children...”.
Even if I was to make assumptions about the likelihood of homemaker contributions, it is the unchallenged evidence of the husband that from prior to the marriage and thereafter the wife and children always ate dinner at the home of the wife’s parents and that he was excluded, “I was left to look after myself as no meals were prepared”.[17]
[17] Paragraph 8 of the affidavit of the husband sworn 5 May 2011.
It is not possible to make a meaningful finding on those facts.
Contributions to superannuation
Section 79(4)(a) Contributions
The husband’s relevant service commenced before the marriage, on 27 March 1985. The husband’s superannuation was apparently rolled over from another fund, CBUS. His membership of the current fund dates from 14 May 2010. As between the parties, the only direct contributions were made by the husband or his employer/s on his behalf.
The contributions were made by the husband or on his behalf and were made after separation.
Section 79(4)(b) contributions
It is conceded in the husband’s case, that wife may have made indirect non-financial contributions to the husband’s superannuation over the 12 months of their cohabitation. As I have referred to above, there is no evidence of any such contributions.
No other relevant non-financial contributions were made.
Section 79(4)(c) contributions
These contributions are made to the family and not to a particular asset. I refer to, without repeating what I found earlier in relation to homemaker contributions.
Conclusion on Contribution
It is necessary to weigh the parties’ contributions.[18] The initial contributions by a party are to be assessed with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the wife’s initial contribution, regard must be had to the use made by the parties of that contribution. The wife’s initial contribution was used to pay out unidentified and unquantified debts of the parties and to fund the purchase of the property, creating an equity of about $58,000.00 in the property. Thereafter there were significant, valuable contributions all made by the husband. The husband’s contributions greatly exceeded those of the wife. Given the preliminary nature of the enquiry that is necessary here and given the modest asset pool, it is not necessary to be precise about the balance of contributions. Suffice it to say that the husband made the greater contribution to the non superannuation assets and that he made the overwhelming contribution to his superannuation.
[18] In the Marriage of Pierce (1999) FLC 92-844; (1998) 24 Fam LR 377
The other matters in Section 79(4)
Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. No such effect is identified.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (d), (f), (m) and (o).
(a) the age and state of health of each of the parties;
The wife is 51 years of age and the husband is 55. Each of the parties contends that they have suffered and suffer medical conditions. The wife has been treated by a psychiatrist. The husband shattered his right leg in a motor vehicle accident in 1982. Unfortunately, there is no medical evidence in relation to the current health of either of the parties.
Although not received at the time of the trial, the wife has in the past qualified for a disability support pension, lending some support to her claims.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife has no income. In her latest Financial Statement she puts her occupation as pensioner but says that her receipt of a disability support pension ceased as at 5 October 2012. The wife lives with Mr Q who earns $1,951.00 per week from casual employment. On her own case, the wife has been living with Mr Q since June 2011. It is not clear to me and I do not recall any evidence as to why the wife’s pension might have been terminated only recently.
As at the date the wife swore her Financial Statement, Mr Q paid $131.00 per week towards the mortgage over the property.
The wife deposed to the following expenses:
Expense Amount Mortgage payments – Westpac Bank – C Town property (paid by Mr Q) $131.00 Rates and levies $33.00 Motor vehicle third party insurance $10.00 GE Money $10.00 Mastercard – Westpac Bank $12.00 Total $196.00
The wife therefore shows a weekly deficit of $65.00. She has not (and was not obliged to) set out the details of her other living expenses – food, utilities, clothing etc. However, she was obliged to specify any expenses paid by Mr Q for her benefit and has only identified his contribution towards the C Town mortgage. Therefore the source or sources from which the deficit of $65.00 per week and the wife’s unspecified living expenses are met, are not identified by the wife. Those expenses are not met from her formal borrowings because the balances of the wife’s GE Money and Westpac Bank Mastercard accounts are, somewhat implausibly, sworn to be precisely the same figures ($2,709.00 and $2,252.00, respectively) in her Financial Statements sworn on 24 February 2011 and 8 October 2012.
The wife has not had paid employment for many years. It is not suggested that she has any earning capacity.
The husband receives a weekly income of $2,257.69 made up of his wages as a shift fitter for N Pty Ltd of $2,097.69 and $160.00 per week in rent from Ms L.
The husband deposed to the following expenses:
Expense Amount Income tax $729.00 Mortgage payments – Bankwest – K Town property $413.00 Rates and levies $46.00 Mortgage payments – Westpac Bank – B Street C Town $121.00 Building Insurance premiums - C Town – NRMA $13.75 Building and Contents Insurance premiums - K Town – NRMA $16.00 Health Insurance – West Fund $52.75 Motor vehicle registration motor vehicle 5 $12.00 Hire purchase – lease agreement – motor vehicle 4– Leaseplan – N Pty Ltd $308.68 Loan repayments – St George Bank personal loan $94.00 Mastercard – Bank West $92.00 GE Finance $63.00 U Pty Ltd $98.00 Food $150.00 Phone $30.00 Gas $20.00 Fuel $50.00 Car registration $25.00 Total $2334.18
As of 2 November 2012, the husband was no longer required to contribute to the C Town mortgage instalments. The husband has not attempted to set out all of his living expenses. In particular, I note that there is no reference to car insurance in the husband’s expenses. Ms L pays $55.00 per week towards electricity. Subject to his expenses being accurate, after 2 November 2012 the husband will have a modest surplus in his weekly budget.
The husband seeks to cast doubt on his future earning capacity but there is no evidence to support his assertions. He is 55 years of age, in an occupation that is likely to be physically demanding and his right leg was damaged in 1982. Unless, retrenched or otherwise terminated before hand, it might be assumed that over the next 10 years he will give increasing consideration to retiring.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the evidence in relation to the expenses of the husband and wife.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
From time to time the wife has received Centrelink benefits.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is no direct evidence about the standard of living of the parties.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
Neither party proposes to undertake further education or to start a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
There is no evidence and there were no submissions about this issue.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
There have been no such contributions except as were identified above.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
There is no evidence to the effect that the marriage affected the earning capacities of the parties.
(l) the need to protect a party who wishes to continue that party's role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
Ms L and her children live with the husband. She earns $570.00 per week and contributes $160.00 in rent and $55.00 to electricity. The husband does not assert that he pays any other expenses for the benefit of Ms L and her children. He deposes to the fact that on occasions Ms L has paid expenses on his behalf, including vet bills, “grooming” and phone bills.
The wife lives with Mr Q who earns $1,951.00 per week from casual employment. As at the date the wife swore her Financial Statement, Mr Q paid $131.00 per week towards the mortgage but otherwise does not contribute to her expenses.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
There is no relevant child support assessment.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
The only contributions to the wife’s children that are relevant to the proceedings are those of the husband.[19] The husband contributed to those children having a roof over their head until 1998 and 2001 respectively, and in the case of Ms F, for a further period after 2003. Those children were part of the household during cohabitation, being a household into which the sole income came from the husband. The husband bought Ms F a bed when she returned to live at the property.
[19] In the Marriage of Robb (1995) FLC 92-555.
The unchallenged evidence of the husband is that he assisted the wife’s son, Mr E and his grandmother to relocate on at least one occasion.
During cross-examination the wife conceded that since separation from the husband and prior to her relationships with a person called P in about 2010 and her current relationship with Mr Q, she had other relationships with men. I took the effect of what were sometimes unresponsive answers in cross-examination to be that for some and perhaps much of the period from separation to 2010, the wife had been in relationships and most, but not all of her partners lived with her in the property. Care is needed with this issue because the wife’s responses were hard to follow and because the husband, who says he was regularly at the property undertaking maintenance etc, does not say that he observed others living at the property. Suffice it to say that the wife conceded that over the years she had partners living with her in the property at some times.
To the extent that the wife was living in a relationship with a partner in the property while the husband provided support to her household since 1994, the husband unknowingly provided support to the mother’s partners.
Nothing else comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding financial agreement between the parties.
Section 79(4)(f)
I have referred to the earlier orders made in these proceedings.
Section 79(4)(g)
There is no relevant child support assessment.
Conclusion
The wife is younger than the husband. The division warranted by contributions alone would favour the husband, and in particular, he would retain most if not all of his superannuation interest. The husband is in well paid employment having retained secure employment since the parties separated. He is approaching normal retirement age. The wife lives with a partner who has an income at a similar rate to that of the husband. Albeit perhaps inadvertently, the husband has provided support to the wife when her partners might have been able to provide that support and when the husband was also supporting those partners. The husband has made contributions to the wife’s children which for this purpose cannot be balanced by any contributions of her own.
The purpose of the third step dealing with the non-contribution elements of s79(4) is not to ‘correct’ an imbalance caused by a division based on contributions or to otherwise even-up the capital of the parties. In my view there would be little if any adjustment for the matters raised in the remaining paragraphs of s 79(4), to the distribution warranted by contribution alone.
Just and Equitable
The net assets have a value of $152,877.00 of which $46.00 is in the form of non superannuation assets and $152,831.00 is a superannuation interest. Taking the two pool approach favoured by the parties, the husband would receive more than half of the non superannuation assets and would retain the overwhelming majority, if not all of his superannuation.
In my view an outcome of that order would reflect the intention of s 79(2).
Conclusion under Section 44(3)
It follows that the wife cannot establish that she has a property settlement case to make that would result in a better financial outcome than if she cannot run that case. Therefore she cannot demonstrate that she would suffer hardship if leave is not granted to bring those proceedings out of time. Therefore her application for leave must fail.
The parties have addressed the discretionary matters. They are not relevant because there is no discretion to grant leave but for completeness I will say something about those matters.
As to explanation for delay, the last time when an application for settlement of property could be made without leave was February 2006. The wife commenced these proceedings on 8 March 2011. Therefore the period in question is about 5 years. The wife struggled at school.[20] For most of the period in question the husband continued to provide financial and practical support to the wife. The husband did not make a written proposal about property settlement until 2010. In those circumstances had there been a finding of hardship it is likely that the available explanation would be accepted.
[20] Copies of the wife’s primary and secondary school reports are annexed to her affidavit of January 2012
As to the other discretionary factors, there would be no prejudice to the wife in refusing leave. Paradoxically, there could be prejudice to the husband in refusing the wife’s application as it follows from my reasons that he may have achieved a better outcome under s 79 than the position at general law. However he does not seek to make that case.
Orders
On the basis that the wife’s application for leave has failed, the parties agreed that I should make a declaration in terms of the husband’s application under s78. I have foreshadowed above that I will make the consequential orders sought on behalf of the husband but will allow the parties to bring the matter back on notice in relation to any machinery or implementation issues.
No submissions were made in support of an order for costs. I will leave that matter for the parties to bring back, should they wish.
I certify that the preceding one hundred and sixty-three (163) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 23 November 2012.
Associate:
Date: 23 November 2012
Key Legal Topics
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Family Law
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Property Law
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