Mowatt and Mowatt

[2016] FamCA 807

FAMILY COURT OF AUSTRALIA

MOWATT & MOWATT [2016] FamCA 807

FAMILY LAW – PROPERTY– Where orders for property settlement were made by consent in 2008 – Where the terms of the consent orders were partly carried out – Where the parties subsequently purchased another property together as tenants in common in equal shares – Where the parties both continue to reside in the property – Where the parties are not divorced – Where each of the parties has a case guardian – Where the wife seeks an order pursuant to s 79A(1A) that the 2008 orders be set aside – Where the husband initially sought that the wife’s application be dismissed – Where the parties ultimately agreed that it would be just and equitable to vary the 2008 orders pursuant to s 79A(1A) but were unable to agree on all terms of the variation – Where the parties agreed that they should both continue living in the home – Where the remaining matters in issue include the manner in which the property will eventually be sold, the distribution of proceeds of sale between the parties, and the payment of outgoings associated with the property – Where the parties agree that their contributions overall have been equal – Where a 2.5 percent adjustment in favour of the wife is appropriate taking into account the relevant s 75(2) matters and in particular the difference in the ages of the parties – Where the wife is to receive 52.5 percent and the husband 47.5 percent of the property available for division between the parties – Where to reflect the overall division of property, order made for the wife to receive 55 per cent and the husband to receive 45 per cent of the proceeds of sale of the property.

Family Law Act 1975 (Cth) – ss 75(2), 79, 79A
Family Law Rules 2004 (Cth) – Rule 6.10
Succession Act 2006 (NSW) – s 95

Bevan & Bevan (2013) FLC 93-545
Clauson and Clauson (1995) FLC 92-595
Gitane & Velacruz (2008) FLC 93-371
Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Ms Mowatt

RESPONDENT: Mr Mowatt

FILE NUMBER: SYC 1263 of 2014

DATE DELIVERED: 21 September 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 14 & 15 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Connor

SOLICITOR FOR THE APPLICANT: Argyle Lawyers

COUNSEL FOR THE RESPONDENT: Ms Winfield

SOLICITOR FOR THE RESPONDENT: Eleanor Murphy & Company Solicitors

Orders

IT IS NOTED

A.That the husband and the wife agree that these orders and declarations shall bind their heirs, executors, assigns and trustees.

B.That B Street, Suburb C, New South Wales (“the Suburb C property”) is presently unencumbered.

C.That nothing in these orders and declarations is intended to exclude the parties’ daughter Ms D and her son Mr E from residing at the Suburb C property.

IT IS ORDERED BY CONSENT:

1. That pursuant to s 79A(1A) Family Law Act 1975 the orders made on 21 February 2008 be varied to provide as follows:

   1.1Subject to these orders including order 1.11, the husband and the wife do no act or thing or give any instructions to any person to commence proceedings in any court under s 66G of the Conveyancing Act (NSW) or pursuant to any other right or similar provision in law or equity with respect to any right, title or interest that either has at any time in the Suburb C property.

   1.2That subject to these orders and declarations the husband and the wife do no act or thing or give any instructions to any person to sell, assign, encumber, charge, mortgage, occupy or otherwise deal with the said Suburb C property.

   1.3That each of the husband and the wife be granted the right jointly with the other to exclusively occupy to the exclusion of all others the Suburb C property for the term of their respective lives provided that each party shall use his or her best endeavours to ensure that any family member, visitor or health professional be allowed into the Suburb C property provided further that such persons shall not interfere with the quiet enjoyment of each of the husband or the wife’s interest in the property.

   1.4That the husband and the wife notwithstanding his or her right to occupy the Suburb C property shall each have the right to sell the whole of the said property (“the election”) after the decease of the other party.

   1.5That subject to these orders and declarations, the husband and the wife shall do no act or thing to interfere with each other’s quiet enjoyment of the Suburb C property.

   1.6That except as otherwise provided for in these orders and declarations to the contrary, the wife be declared to be the legal and beneficial owner of the following:

   ·A one-half share as tenant-in-common of the Suburb C property;

   ·All bank accounts in the wife’s name which currently have a total balance of all the accounts of approximately $362 000;

   ·The furniture and furnishings contained in the former matrimonial home save that the husband shall have the right to use the furniture in the lounge, dining room, kitchen and bathroom and his bedroom during his occupation;

   ·The wife’s jewellery;

   ·The dinner set, lounge suite, hallway stand and piano; and

   ·All other assets in the wife’s possession, custody and/or control.

   1.7That except as otherwise provided for in these orders and declarations to the contrary, the husband be declared to be the legal and beneficial owner of the following:

   ·A one-half share as tenant-in-common in the Suburb C property;

   ·The implement collection;

   ·All bank accounts in the husband’s name which currently have a total balance of $61 657;

   ·The furniture, furnishings and personal belongings contained in the husband’s room in the Suburb C property; and

   ·All other assets in the husband’s possession, custody and/or control.

   1.8That in default of the parties executing all such documents as are necessary to give effect to these orders and declarations and within 14 days of their obligation to do so and on the Registrar being satisfied as to such failure, neglect or default by the parties then a Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to s 106A to execute such documents in the name of the defaulting party and to do all such things as are necessary to give validity and operation to the said documents and the party in default shall pay to the other party that party’s costs on an indemnity basis.

   1.9That 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 and declarations.

   1.10That each of the husband and the wife have the right to register a caveat against the Suburb C property with respect to these orders and declarations and subject to these orders and declarations neither the husband nor the wife shall do any act or thing or give any instructions to any person to cause such caveat to lapse otherwise.

   1.11That the husband and the wife shall within 28 days of being called upon by the other do all acts and things and sign all documents as are necessary to join any application by the other to the Supreme Court of New South Wales for the approval of a release of the rights of each party with respect to the estate of the other pursuant to s 95 Succession Act 2006 (NSW).

   1.12That each party shall pay his or her own costs of and incidental to these proceedings.

   1.13That for the purposes of sale of the Suburb C property pursuant to these orders the legal personal representative shall, when called upon by the surviving party, do all acts and things and sign all documents necessary to effect the sale of the whole of the Suburb C property pursuant to these orders and declarations provided further that the surviving party shall provide vacant possession on the sale of the property. 

IT IS FURTHER ORDERED:

1. That for the purposes of order 1.4 above, the surviving party is appointed sole trustee for sale of the Suburb C property.

2. That upon the sale of the Suburb C property by the surviving party, the proceeds of sale shall be distributed in the following manner and priority:

   3.1      Payment of all agents fees and expenses;

   3.2      Payment of legal expenses incurred with respect to the said sale;

   3.3      Payment of any other reasonable costs of sale;

   3.4      Payment to the wife of 55 percent of the balance then remaining;

   3.5Payment of the balance of 45 percent then remaining to the husband.

3. That so long as the husband and the wife remain living in the property at the same time they shall be responsible for and do all acts and things and sign all documents necessary, and each make one half of all payments, with respect to the following expenses in relation to the property:

   4.1      Home and contents insurance;

   4.2      The general rates;

   4.3      The water rates;

   4.4      Electricity and gas;

   4.5      All other utilities; and

   4.6Reasonable repairs and maintenance required from time to time

   provided that if either the husband or the wife remain living in the Suburb C property without the other then that party remaining living in the said property shall be responsible for and pay all of the above expenses.

4. That all exhibits be released.

5. That the above orders not commence operation until 11 October 2016.

6. That both parties have leave to re-list these proceedings by arrangement with the Associate to Johnston J for further submissions in relation only to the form of the orders at any time not later than 10 October 2016.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mowatt & Mowatt has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1263 of 2014

Ms Mowatt

Applicant

And

Mr Mowatt

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Mowatt 95 years (“the husband”) and Ms Mowatt 75 years (“the wife”) married in 1977.  They separated at some time between February 2002 and March 2005.  On 21 February 2008 final orders for property settlement were made by consent by the then Federal Magistrates Court.  The orders provided for a sale of the former matrimonial home at Suburb F and payment of the proceeds to the parties in equal shares.  The parties acted pursuant to these orders by selling the home.  But subsequently they decided to purchase another home together, which they did, this being the property at B Street, Suburb C, New South Wales.  They purchased this as tenants in common in equal shares.

2. There is no question that they have resided at this property since that time and continue to do so.  The husband filed a Divorce Application on 6 March 2014 but then withdrew that application by a Notice of Discontinuance filed on 26 March 2014.

3. The parties are in issue about their current property situation. In April 2015 the wife filed an application seeking orders to set aside the 2008 orders pursuant to s 79A(1A) of the Family Law Act 1975 (Cth) (“the Act”). The husband opposed that application and sought orders that it be dismissed. But during the course of the hearing the husband agreed that it would be just and equitable for the 2008 orders to be varied.

4. The parties have been able to agree on numerous orders by way of variation of the 2008 orders as shall be referred to below.  But several essential matters remain for determination by the Court.  I shall refer to these below.

The Applications

1. The orders sought by the wife at the commencement of the hearing were as follows:

   Definitions

   “The former matrimonial home” means the property situated at and known as [B Street, Suburb C], New South Wales being the whole of the land contained in Certificate of Title Folio … registered in the name of the husband and wife as tenants in common in equal shares.

   Orders

   1.That pursuant to s 79A(1A) of the Family Law Act 1975 (Cth), the orders made on the 21 February 2008 be discharged.

   2.        That the wife be granted:

   2.1exclusive occupancy of the former matrimonial home, provided that such occupancy shall include the husband;

   2.2life tenancy of the former matrimonial home until such time as she shall determine to sell the property (“the election”).

   3.Pending the sale of the former matrimonial home the wife shall be responsible for the payment of the rates and utilities for the property.

   4.That upon the wife making the election to sell the former matrimonial home pursuant to the conditions referred to in Annexure "A" herein, the net proceeds of sale should be divided as to:

   4.1     68% to the wife; and

   4.2     32% to the husband.

   5.That except as otherwise provided for in these orders to the contrary, the wife shall be declared to be the legal and beneficial owner of the following:

   5.1     all bank accounts in the wife’s name;

   5.2the furniture and furnishings contained in the former matrimonial home;

   5.3the wife’s jewellery; and

   5.4all other assets in the wife’s possession custody and/or control.

   6.That except as otherwise provided for in these orders to the contrary, the husband shall be declared to be the legal and beneficial owner of the following:

   6.1     all bank accounts in the husband’s name;

   6.2     his superannuation entitlements; and

   6.3all other assets in the husband’s possession custody and/or control.

   7.In default of the parties doing all acts and things and executing all such documents as are necessary to give effect to these orders and within 14 days of their obligation to do so, and on the Registrar being satisfied of such failure, neglect or default by the parties, then a Registrar of the Family Court of Australia at Sydney is hereby Appointed pursuant to S.106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party’s costs and disbursements on an indemnity basis.

   8.That the husband pay the wife's costs of and incidental to the proceedings.

   Declaration

   9.That the sum of $360,040 distributed to the husband's children from his first marriage on … 2014, be characterised as a partial property settlement in favour of the husband.

   10.In the alternative to Order 1 herein, and pursuant to s 79 of the Family Law Act 1975 (Cth):

   11.     That the wife be granted:

   11.1exclusive occupancy of the former matrimonial home, provided that such occupancy shall include the husband;

   11.2life tenancy of the former matrimonial home until such time as she shall determine to sell the property (“the election”).

   12.Pending the sale of the former matrimonial home the wife shall be responsible for the payment of the rates and utilities for the property.

   13.That upon the wife making the election to sell the former matrimonial home pursuant to the conditions referred to in Annexure "A" herein, the net proceeds of sale should  be divided as to:

   13.168% to the wife; and

   13.232% to the husband.

   14.That except as otherwise provided for in these orders to the contrary, the wife shall be declared to be the legal and beneficial owner of the following:

   14.1    all bank accounts in the wife’s name;

   14.2the furniture and furnishings contained in the former matrimonial home;

   14.3    the wife’s jewellery; and

   14.4all other assets in the wife’s possession custody and/or control.

   15.That except as otherwise provided for in these orders to the contrary, the husband shall be declared to be the legal and beneficial owner of the following:

   15.1all bank accounts in the husband’s name;

   15.2his superannuation entitlements; and

   15.3all other assets in the husband’s possession custody and/or control.

   16.In default of the parties doing all acts and things and executing all such documents as are necessary to give effect to these orders and within 14 days of their obligation to do so, and on the Registrar being satisfied of such failure neglect or default by the parties, then a Registrar of the Family Court of Australia at Sydney is hereby Appointed pursuant to S.106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party's costs and disbursements on an indemnity basis.

   17.That the husband pay the wife’s costs of and incidental to the proceedings.

   Declaration

   18.That the sum of $360,040 distributed to the husband's children from his first marriage on … 2014, be characterised as a partial property settlement in favour of the husband.

2. The orders sought by the husband at the commencement of the hearing were as follows:

   1.The Wife’s application be dismissed.

   2.In the alternative, in the event the Court should decline to set aside property settlement orders made 21 February 2008 in proceedings SYC 2820 of 2007 the Court exercise such accrued jurisdiction or cross vest to itself such jurisdiction as it may need pursuant to section 66G Conveyancing Act 1919 (NSW) to order sale of the property held by the parties as tenants in common in equal shares at [B Street, Suburb C] (“the residential property”) and division of the proceeds in accordance with the parties’ interests.

   3.In the alternative, in the event the Court should set aside orders made 21 February 2008 in proceedings SYC 2820 of 2007, orders that:

   3.1Within 28 days of the date of these order, the Wife pay to the Husband the sum of $1,140,000.00.

   3.2On receipt of the sum referred to in [3.1] above, the Husband do all such acts and things and sign all such documents as are necessary to transfer to the Wife all his right title and interest in the property held by the parties as tenants in common in equal shares (“the residential property”) situate at and known as [B Street, Suburb C] in the State of New South Wales and thereafter, the Wife indemnify and keep indemnified the Husband in respect of any mortgage secured against the said residential property and all rates insurances and outgoings in respect of the said property.

   3.3In the event that any of the sum referred to in Order 3.1 hereof remains unpaid at the due date then interest shall be payable on any outstanding sum from the due date until paid calculated at the rate prescribed by the Family Court Rules from time to time.

   4.In the event that any of the sum referred to in 3.1 above remains unpaid as at the due date the parties shall do all such acts and things and sign all such documents, instruments and authorities as are necessary to cause the residential property to be placed on the market for sale:

   (a)with a real estate agent agreed to by the parties and in default of agreement the Husband forward the Wife 3 names of real estate agents in the [Suburb C] or [Suburb G] area and the Wife shall within 7 days of receipt of such names, nominate one;

   (b)at a price to be agreed between the parties and in default of agreement at a price nominated by the agent appointed to sell the residential property and

   (c)the wife shall sign all documents and do all things to remove the caveats lodged by her against the title of the residential property.

   5.In the event the residential property remains unsold within 3 months of being placed on the market, then the property shall be listed for public auction to take place within 6 weeks thereafter at or above the reserve price reached by agreement between the parties in default of agreement at a reserve nominated by the real estate agent appointed to conduct the sale.

   6.The solicitor for the Husband have carriage of the sale of the property provided that she shall submit all documents to the Wife’s solicitor as are necessary for her to act in the supervisory role.

   7.From the sale of the property the proceeds of sale be disbursed as follows:

   (a)pay any outstanding mortgage from the share of the party burdened by the mortgage;

   (b)to pay the selling commission of the agent or reasonable auction expenses of the agent together with the reasonable auction expenses and promotional charges of the auctioneer who affected the sale;

   (c)to reimburse the party/parties who pre-paid reasonable commercial advertising and auction expenses;

   (d)to adjust municipal rates and water rates with the purchase in accordance with the relevant provisions of the contract.

   (e)to pay the Husband’s solicitor who performs the principal role in the conveyancing aspect of the sale her proper costs and reasonable expenses including the costs and expenses of any aborted sale process;

   (f)to pay the Wife’s solicitor his reasonable fees in respect of the supervisory function of such solicitor;

   (g)to pay the balance as to 60% to the Husband and 40% to the Wife, subject to (a) above.

   8.Pending sale of the property, the parties shall pay in equal shares all rates, outgoings, insurance premiums on the property as and when they fall due, provided that if either party should have a mortgage secured against his or her share of the residential property, the party whose share is encumbered shall pay the whole of all mortgage payments as and when they fall due.

   9.Pending payment of all sums due to the [sic] pursuant to these orders or the happening of events referred to in 3 to 7 hereof the parties each be and is hereby restrained from selling, mortgaging, encumbering or otherwise disposing of the residential property other than for the purpose of compliance with these orders.

   10.On payment of all amounts due to the Husband pursuant to these orders the Husband be and is hereby declared to be the sole beneficial owner to the exclusion of the Wife all other items in his respective name possession custody or control including but not exclusively, bank accounts, insurance policies, and superannuation in his name or possession.

   11.Other than as provided herein, the Wife retain to the exclusion of the Husband all property, real or personal, in her name or possession wheresoever situated, including but not limited to in the Philippines, any motor vehicle, bank accounts, superannuation, jewellery including but not limited to black pearls and gold and any other personalty in her possession.

   12.In the event that either party neglects or fails to sign any document relevant to the sale of the property within 7 days of such document being delivered to his or her solicitor then the Registrar of this Court be and is hereby empowered to execute any such document pursuant to s 106A of the Family Law Act.

   13.Costs.

Background

1. The husband was born in 1921 in Sydney.  The wife was born in 1941 in Asia.

2. Together the parties have two adult children, namely Ms D Mowatt (“Ms D”), 38 years, and Ms H Mowatt (“Ms H”), 35 years.

3. The husband has four children from a previous marriage, namely Ms I, 70 years, Ms J, 68 years, Ms K, 59 years and Ms L, 55 years.

4. Ms D is the mother’s case guardian.  Mr M is the father’s case guardian.

5. The husband and wife were married in 1977 in Asia.  Shortly after their marriage, the wife came to Australia to live and the husband sponsored her immigration.  The parties lived in a rented property at Suburb N in Sydney.  The husband owned and operated a shop in Suburb O, Sydney Business P.  The wife deposed that in November 1977 she commenced working full-time in the business.

6. In 1979 the husband and wife purchased a property at Q Street, Suburb F in Sydney, New South Wales (“the Suburb F property”) for approximately $58 750 as joint tenants.  A loan was obtained by way of mortgage from the ANZ Bank.

7. In 1978 Ms D was born.  The wife deposed that she returned to work at the shop after a few months.

8. In 1980 Ms H was born.

9. In approximately 1981 the husband reached settlement with his first wife whereby a property was transferred to her.

10. In 1985 the parties opened a second shop but it was later closed.

11. In approximately 1987 the mortgage secured against the Suburb F property to the ANZ Bank was discharged.

12. In 1988 the wife returned to working full time at the shop.

13. Also in 1988 the parties renovated the Suburb F property.

14. On 18 February 1988, the parties entered into a Partnership Agreement in relation to the business.

15. In 1990 the wife purchased a home in Asia for $7000 and in the mid-1990s she paid a deposit in the amount of $500 for a block of land in Asia.  She said that the sale of the block of land did not proceed and she was unable to recover that amount.

16. In 1997 when the wife’s father died the husband gave the wife $4000 towards his funeral costs.

17. In 1999 the wife invested $20 000 in a company owned by her friend called R Pty Ltd and became a director.  The business was deregistered on 12 June 2005 and the wife deposed she never made a profit from that investment.

18. In 2000 when the wife’s mother died the husband gave her approximately $1500 towards her funeral expenses.

19. On 17 July 2000 the husband lodged a transfer severing the joint tenancy in respect of the Suburb F property.  The wife deposed that the husband did this without her knowledge.  She said that she received notice from the Land Titles Office notifying her of this in 2004 or 2005.

20. The husband asserts that the parties separated on 4 February 2002 and that from this time, they continued to live in the Suburb F property but independently and in separate rooms.  His evidence is that from this time the parties did not have a sexual relationship.

21. In 2004 the parties again renovated the Suburb F property.

22. The wife asserts that the parties’ first period of separation was from approximately 1 March 2005.  She says that the parties remained living separately and apart but under the same roof at their Suburb F property for approximately three years from 2005 until it was sold in 2008.  In my view, the actual period of separation matters little.

23. On 5 October 2006 the wife commenced property proceedings.

24. On 21 February 2008 the parties entered into final orders for property settlement by consent in what was then the Federal Magistrates Court.  Among other things, the orders provided for the sale of the Suburb F property.

25. In October 2008 the parties sold the Suburb F property for $2 100 000.  The proceeds of sale were deposited into a joint account held with the Commonwealth Bank of Australia.

26. It is the wife’s contention that after the sale of the Suburb F property, the parties reconciled and agreed to purchase another property together, as detailed below.  She said that they continued to live together as husband and wife.  She said that the husband said to her “If we buy the house together I will leave my half share to Ms D and Ms H and you can have a life tenancy.”  

27. It is the husband’s contention that the parties agreed to purchase another property together because they could each not afford to buy another property on their own, however they agreed to live separately in the new property.  I shall refer to this again below.

28. On 23 October 2008 the parties purchased the property at B Street, Suburb C in Sydney, New South Wales (“the Suburb C property”) as tenants in common in equal shares.  The parties each continue to reside in this property.  After funding the purchase of this property there was approximately $700 000 remaining in their joint account.

29. In February 2010 the wife had a stroke.

30. In 2011 the husband had a heart attack and a stroke.  At this time, he ceased working at the shop but his daughter, Ms K, continued to run the business until 2013.

31. The wife asserts that since 2011 she has been the husband’s full time carer, and that in accordance with this she receives the Carers pension.

32. In early 2014 the husband gave his four daughters from his first marriage $90 000 each.  On 12 February 2014 the husband and each of these daughters signed a Deed of Acknowledgment in relation to this.

33. The wife asserts that on approximately 1 March 2014 she and the husband separated on a final basis but continued living together at the Suburb C property.

34. On 6 March 2014 the husband filed an Application for Divorce.  But on 26 March 2014 the husband filed a Notice of Discontinuance in relation to his Application for Divorce.

35. In January 2015 the husband appointed Ms D and Ms H as his enduring powers of attorney.  He later signed documentation revoking this power of attorney.

36. On 20 April 2015 the wife filed an Application for Final Orders seeking orders pursuant to s 79A of the Act to discharge the final orders for property settlement made in 2008.

37. On 15 May 2015 Ms D filed an application in the New South Wales Civil and Administrative Tribunal seeking the appointment of a guardian and financial manager for the husband.

38. On 2 November 2015 Mr M was appointed as the husband’s financial manager by the said Tribunal.  The application filed by Ms D to have a guardian appointed for the husband was dismissed and the Tribunal found that the husband had the capacity to sign a document revoking the enduring power of attorney held by Ms D and Ms H.

39. From April 2016 the parties had cleaning assistance provided by the Department of Veteran Affairs.

40. On 30 May 2016, the parties came before this Court for the interim hearing of the husband’s Application in a Case in which he sought orders that the wife’s Application pursuant to s 79A of the Act be dismissed. The Court noted that those representing the wife were considering an application for the appointment of a case guardian for the wife and that the husband no longer pressed his application for summary dismissal. Mr M was appointed case guardian for the husband.

41. On 11 July 2016 it was ordered by consent that Ms D be appointed as case guardian for the wife.  The proceedings were set down for final hearing and the requirement for the parties to attend a financial conciliation conference was dispensed with.

Settlement Negotiations

1. It is most unfortunate that persons the ages of these parties have found themselves in defended proceedings in this Court.  Each of them has serious health issues.  This is reflected in the facts that each has a case guardian and the husband did not attend the hearing.

2. To their credit, and that of the family members who came to Court to support them, the parties used some of the time allocated for hearing to arrive at a resolution of parts of the dispute.  Nobody wanted to subject the parties to the stress and challenges which would no doubt be involved if they had to be cross-examined.  Fortunately they have been spared such an experience.  Again to their credit they have managed to resolve many of the matters initially at issue between them.

3. In particular they agreed that a just and equitable order would enable them both to continue living in their home at Suburb C. 

4. The parties agreed that the Court would make the following notations to the orders made:

   ·Noted the agreement of the husband and the wife that these orders and declarations shall bind their heirs, executors, assigns and trustees;

   ·Noted that the Suburb C property is presently unencumbered; and

   ·Noted that nothing in these orders and declarations is intended to exclude the parties’ daughter Ms D and her son Mr E from residing at the Suburb C property.

5. The parties agreed on the following orders and declarations:

   1.Pursuant to s 79A(1A) Family Law Act 1975 the orders made on 21 February 2008 be varied to provide as follows:

   1.1Subject to these orders (including an order for the release of the parties’ respective rights in relation to the estate of the other pursuant to s 95 of the Succession Act 2006 (NSW)), the husband and the wife do no act or thing or give any instructions to any person to commence proceedings in any court under s 66G of the Conveyancing Act (NSW) or pursuant to any other right or similar provision in law or equity with respect to any right, title or interest that either has at any time in the [Suburb C] property.

   1.2That subject to these orders and declarations the husband and the wife do no act or thing or give any instructions to any person to sell, assign, encumber, charge, mortgage, occupy or otherwise deal with the said [Suburb C] property.

   1.3That each of the husband and the wife be granted the right jointly with the other to exclusively occupy to the exclusion of all others the [Suburb C] property for the term of their respective lives provided that each party shall use his or her best endeavours to ensure that any family member, visitor or health professional be allowed into the [Suburb C] property provided further that such persons shall not interfere with the quiet enjoyment of each of the husband or the wife’s interest in the property.

   1.4That the husband and the wife notwithstanding his or her right to occupy the [Suburb C] property shall each have the right to sell the whole of the said property (“the election”) after the decease of the other party.

   1.5That subject to these orders and declarations, the husband and the wife shall do no act or thing to interfere with each other’s quiet enjoyment of the [Suburb C] property.

   1.6That except as otherwise provided for in these orders and declarations to the contrary, the wife be declared to be the legal and beneficial owner of the following:

   ·A one-half share as tenant-in-common of the [Suburb C] property;

   ·All bank accounts in the wife’s name which currently have a total balance of all the accounts of approximately $362 000;

   ·The furniture and furnishings contained in the former matrimonial home save that the husband shall have the right to use the furniture in the lounge, dining room, kitchen and bathroom and his bedroom during his occupation;

   ·The wife’s jewellery;

   ·The … dinner set, … lounge suite, hallway stand and piano; and

   ·All other assets in the wife’s possession, custody and/or control.

   1.7That except as otherwise provided for in these orders and declarations to the contrary, the husband be declared to be the legal and beneficial owner of the following:

   ·A one-half share as tenant-in-common in the [Suburb C] property;

   ·The implement collection;

   ·All bank accounts in the husband’s name which currently have a total balance of $61 657;

   ·The furniture, furnishings and personal belongings contained in the husband’s room in the [Suburb C] property; and

   ·All other assets in the husband’s possession, custody and/or control.

   1.8That in default of the parties executing all such documents as are necessary to give effect to these orders and declarations and within 14 days of their obligation to do so and on the Registrar being satisfied as to such failure, neglect or default by the parties then a Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to s 106A to execute such documents in the name of the defaulting party and to do all such things as are necessary to give validity and operation to the said orders and declarations and the party in default shall pay to the other party that party’s costs on an indemnity basis.

   1.9That 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 and declarations.

   1.10That each of the husband and the wife have the right to register a caveat against the [Suburb C] property with respect to these orders and declarations and subject to these orders and declarations neither the husband nor the wife shall do any act or thing or give any instructions to any person to cause such caveat to lapse otherwise.

   1.11That the husband and the wife shall within 28 days of being called upon by the other do all acts and things and sign all documents as are necessary to join any application by the other to the Supreme Court of New South Wales for the approval of a release of the rights of each party with respect to the estate of the other pursuant to s 95 Succession Act 2006 (NSW).

   1.12That each party shall pay his or her own costs of and incidental to these proceedings.

   1.13That for the purposes of sale of the [Suburb C] property pursuant to these orders the legal personal representative shall, when called upon by the surviving party, do all acts and things and sign all documents necessary to effect the sale of the whole of [B Street, Suburb C] pursuant to these orders and declarations provided further that the surviving party shall provide vacant possession on the sale of the property. 

Matters Remaining in Issue

1. In determining the matters upon which the parties have been unable to agree, I propose to proceed in accordance with the guidance provided by the Full Court in Gitane & Velacruz (2008) FLC 93-371. At page 93-371 their Honours (Bryant CJ, Warnick and Boland JJ) said as follows:

   … There may only be one final property order.  If an initial final order is varied, there will still be only one order.  In the making of a variation, s 79 principles would necessarily apply as the order retains its essential character – a final order made under s 79.

2. Accordingly, I propose to proceed in accordance with the usual pathway and principles for determining applications for s 79 orders but not losing sight of the fact that the 2008 orders have been made.

3. The matters about which the parties remain at issue, and ask the Court to determine for them, are as follows. 

4. The wife sought an order to the effect that for the purpose of the sale of the Suburb C property the surviving party would be appointed sole trustee for sale of the property.  It was submitted on behalf of the husband that it would be more appropriate for not only the surviving party to be appointed trustee for sale of the property but the legal personal representative of the deceased party ought also be a trustee for sale.  I must say I have difficulty accepting this latter proposal.  It would not necessarily be the case that the surviving party and the legal personal representative of the deceased would agree on all aspects of the terms of sale and in such circumstances there would have to be provision made to resolve such differences.  In my view, the better course would be as proposed on behalf of the wife simply to appoint the surviving party as the sole trustee for sale of the property and I propose to do so. 

5. The parties were unable to agree about how the proceeds of sale of the Suburb C property would be paid.  This of course goes to the heart of the property settlement.  The point of difference between them was that on the one hand the wife sought that paying agent’s fees and expenses, legal expenses on the sale and other reasonable costs of sale, the balance would be paid 60 percent to the wife and 40 percent to the husband.  The husband sought that after paying all the reasonable costs the balance be paid out to the parties in equal shares.  I shall refer to this matter again below.

6. The parties are also at issue about how the outgoings on the home including utilities would be paid.  The parties agreed on the following:

   ·That so long as the husband and the wife remain living in the Suburb C property at the same time, they shall be responsible for, and do all things and sign all documents necessary to make, one half of all payments with respect to:

   -          Home and contents insurance;

   -          General rates;

   -          Water rates;

   -          Electricity and gas;

   -          All other utilities; and

   -Reasonable repairs and maintenance required from time to time.

7. But an issue arose about how these would be paid upon the decease of a party.  It was submitted for the wife that the survivor would only have to pay the entirety of water rates, electricity and gas.  It was submitted that the home and contents insurance, the general rates and reasonable repairs and maintenance required from time to time would continue to be met by the survivor and the legal personal representative in equal shares.

8. It was submitted on behalf of the husband that all of such costs should be paid by the surviving party. 

9. I must say consistently with the general approach which has been taken by this Court over many years, in my view the appropriate course is that the surviving party, enjoying the benefit of sole occupancy of the Suburb C property, ought in fairness to bear the responsibility for paying the entirety of these costs.

Were the Parties Reconciled Following Their Purchase of the Suburb C Property?

1. As indicated above, at the outset of the hearing this matter remained in issue.  The wife asserted that they had reconciled upon purchasing the property and lived therein in a married state until their separation in 2014.  The husband denied this and said they purchased the Suburb C property to meet their respective convenience but remained separated therein.  In my view, the husband’s assertions in this regard fell away once it was conceded that the Court could vary the 2008 orders.

The Applicable Law

Sub-section 79A(1A)

1. Sub-section 79A(1A) of the Act provides that a court may, on application by a person affected by an order made by a court under s 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under s 79 in substitution for the order so set aside.

2. The parties have consented to the Court exercising power to vary the 2008 orders so as to make provision for what has occurred since that time.  But they have been unable to agree on all terms of a variation.

Section 79

1. Sub-section 79(1) of the Act provides to the effect that in property settlement proceedings the Court may make such order as it considers appropriate altering the interests of the parties to the marriage in the property.

2. Sub-section 79(2) provides that the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. Sub-section 79(4) sets out various matters which must be taken into account in considering what order (if any) should be made under the section. These matters include direct and indirect contributions, financial and otherwise by or on behalf of a party or a child to the acquisition, conservation or improvement of any property of the parties, contributions by a party to the welfare of their family including as a homemaker or parent, relevant matters referred to in s 75(2) and the other matters referred to in s 79(4).

Sub-section 79(2)

1. As I have said, s 79(2) of the Act provides:

   The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

2. The operation of s 79 was the subject of consideration by the High Court in the case of Stanford v Stanford (2012) 247 CLR 108. In this case the majority said (at page 120) in referring to ss 79(2) and 79(4) as follows:

   35.… the requirements of the two sub-sections are not to be conflated.  In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

   36.The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations.  … while the power given by s 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured.

3. The High Court said that the first of these propositions is for the court to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.

4. The second is that although s 79 confers a broad power on the court, it is not a power that is to be exercised according to an unguided judicial discretion. It must be exercised in accordance with legal principles, including the principles which the Act itself lays down.

5. The High Court said that the third fundamental proposition is that the question of whether the order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters set out in s 79(4). To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2) would be to “conflate” the statutory requirements and ignore the principles laid down by the Act.

6. And the High Court majority went on to say (at page 122) as follows:

   41.…  The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.

7. In their decision in the case of Bevan & Bevan (2013) FLC 93-545 the Full Court (Bryant CJ and Thackray J) said as follows at page 87,234:

   In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.

8. In the present case, although the parties implemented part of the 2008 orders by selling their former matrimonial home, they subsequently purchased their Suburb C property and have resided there.  If the Court did not make further s 79 orders, the parties would continue to face the uncertainty that one or other could make an application to the Supreme Court of New South Wales for an order for sale of the property.  Neither of them wants this to occur.  And they also want the certainty that they will be able to continue living in their Suburb C property in accordance with the terms of the agreement they wish to have formalised by s 79 orders.

9. In my view, this would be a principled reason for making orders under s 79 to vary the earlier orders.

The Parties’ Existing Legal and Equitable Interests in Property

1. The only controversial matter was whether $360 000 gifted by the husband to his four daughters of his first marriage should be added back to the pool of assets.  In my view, fairness requires this because the wife has retained her $362 000 which represented the bulk of her share of the proceeds of sale of the former matrimonial home, remaining following the purchase by the parties of their Suburb C property.  It would be unfair to bring the wife’s $362 000 to account without similarly bringing to account the husband’s $360 000.

2. The parties’ interests in property and superannuation are as follows:

$
1.        Suburb C property	1,800,000
2.        Wife’s bank accounts	362,000
3.        Wife’s property in Asia	2,500
4.        Wife’s jewellery	10,000
5.        Wife’s household contents	5,000
6.        Husband’s bank accounts	61,657
7.        Husband’s implement collection	5,000
8.        Husband’s gifts to children	360,000
_____________
$2,606,157

1. There are no relevant liabilities.

Contributions

1. To their credit, the parties agreed that their contributions overall have been equal.

Sub-section 75(2) matters

1. As indicated above, the wife is 75 years of age and there are some difficulties in terms of her health.

2. The wife has suffered from multiple strokes and she has atrial fibrillation.  Prof S, her consultant neurologist, described the wife as also having “a combination of weakness and co-ordination difficulty” as well as “some vascular associated cognitive impairment”.

3. The wife suffers from what was described by Dr T, periodontist, as generalised severe chronic periodontitis.  Dr T has recommended extraction of many of the wife’s teeth, replacement with a denture and follow up periodontal treatment.

4. The wife also suffers from hemi-facial spasms for which she receives regular treatment with injections of Botox.

5. The wife’s income is a total of $339 per week from the age pension and a carers allowance.  She estimates her own weekly expenses as being $522 which represents a deficiency.

6. On the other hand, the husband is 95 years of age.  He too has some serious health issues.  He suffered from Poliomyelitis when he was young.  He has significant vascular disease, apparently manifested in ischaemic cardiomyopathy, myocardial infarctions, a cerebrovascular accident in 2011, aortic sclerosis, atrial fibrillation and dementia.  He also has urinary problems and is incontinent.

7. As indicated above, Mr M was appointed as the husband’s financial manager by the Guardianship Division of the New South Wales Civil and Administrative Tribunal in November 2015.  Mr M is also the husband’s case guardian in these proceedings.

8. The husband’s income is a total of $309.20 per week being $301.20 from his service pension from the Department of Veteran’s Affairs and $8 interest on his savings.

9. He estimates his weekly expenses as being a total of $154 although I think it likely that his actual weekly expenses are considerably higher than this.

10. It is also relevant to consider that both parties wish to remain living in their Suburb C home for the remaining years of their lives.  Each of the parties receives assistance from family members.

11. In my view, the difference in the ages of the parties is a significant matter for consideration pursuant to s 75(2) of the Act. The wife is much younger than the husband. As I have said, she suffers from the health conditions referred to above. Nevertheless, there is no evidence to indicate that she is likely to meet an untimely death. On all current indications, in my view, it is more probable than not that the wife will outlive the husband. Accordingly, it is more probable than not that she will need to provide for herself for more years than will the husband.

12. But in my view, it is also relevant to take into account the fact that the parties have agreed that the survivor would be able to continue to reside in the Suburb C property and this would be supported by the consent orders to which I have referred above.

13. I accept that in the case of Clauson and Clauson (1995) FLC 92-595 the Full Court of this Court indicated trial judges need to consider the value of the adjustment in real terms. The Full Court said at page 81,911 as follows:

    There is, we think, at times a tendency to assess s 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.

14. In all the circumstances, in my view, to achieve a just and equitable order there should be a modest set off of property in favour of the wife.  In my view, the appropriate set off is 2.5 percent.  This would be $65 154 which would be a difference between what the parties would receive of $130 308.

Conclusion and fourth step

1. The wife is to have 52.5 percent of the property available for division between the parties.  This is property with a value of $1 365 607 (52.5 percent of $2 606 157 = $1 368 232).

2. The wife has the following property:

$
1.        Bank accounts	362,000
2.        Property in Asia	2,500
3.        Jewellery	10,000
4.        Household contents	5,000
_____________
$379,500

1. To achieve property with a value of $1 368 232 the wife will require further property with a value of $988 732 ($1 368 232 - $379 500 = $988 732).  This would be her share of the proceeds of sale of the Suburb C property.

2. The Suburb C property has an agreed value of $1 800 000.  As a percentage of this value the sum of $988 732 would be 54.93 percent.  I propose to round this up to 55 percent.

3. On the other hand the husband is to have 47.5 percent of the property available for division between the parties.  This is property with a value of $1 237 924 (47.5 percent of $2 606 157 = $1 237 924).

4. The husband has the following property:

$
1.        Bank accounts	61,657
2.        Implement collection	5,000
3.        Gifts to children (added back)	360,000
__________
$426,657

1. To achieve property with a value of $1 237 924 the husband would require additional property with a value of $811 267 ($1 237 924 - $426 657 = $811 267).  This would be the husband’s share of the proceeds of sale of the Suburb C home.

2. As a percentage of the value of the Suburb C home the sum of $811 267 would be 45.07 percent.  I shall round this down to 45 percent.

3. Under the orders as agreed between the parties they shall each have the right to remain living in the Suburb C home.  Their rights in this regard would be protected by orders I also propose to make in the terms agreed to by the parties.

4. Upon the demise of one or other party, the survivor would be able either to remain living in the home or to sell it. 

5. In my view, this would be just and equitable.

I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 21 September 2016.

Associate:

Date:21 September 2016