Muir and Muir
[2015] FCCA 2104
•17 September 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MUIR & MUIR | [2015] FCCA 2104 |
| Catchwords: FAMILY LAW – Property – final hearing proceeds undefended when husband fails to appear on second day – intervention by husband’s former lawyers – financial disclosure – two pools approach. |
| Legislation: Family Law Act 1975, ss.75, 79, 80, 81, 117 Federal Circuit Court Rules 2001, rr.21.02, 21.04 |
| Bevan v Bevan [2013] FamCAFC 116; (2013) FLC 93-545 In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844 In the marriage of Robb [1994] FamCA 36 |
| Applicant: | MS MUIR |
| Respondent: | MR MUIR |
| Intervenor | THE TRUSTEE FOR SANTONE FAMILY TRUST TRADING AS SANTONE LAWYERS PTY LIMITED |
| File Number: | SYC 3903 of 2013 |
| Judgment of: | Judge Monahan |
| Hearing dates: | 20 and 21 April 2015 |
| Date of Last Submission: | 21 April 2015 |
| Delivered at: | Sydney |
| Delivered on: | 17 September 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Harper |
| Solicitors for the Applicant: | F C Bryant Thomas & Co |
| The Respondent appeared in person |
ORDERS
Upon noting that paragraphs 4 and 5 of the orders made on 21 April 2015 provide for the sale of the property known as Property B (“the former matrimonial home”), then upon settlement of the sale of the former matrimonial home, the Wife cause the net proceeds (being the sale proceeds after payment of the outstanding mortgage, the (omitted) Bank personal loan and sale expenses) to be divided as follows:
(a)To the Husband in such manner as he directs in writing:
(i)35%, less the amount due to the Intervenor, Santone Lawyers payable pursuant to the orders made on 20 April 2015; and
(ii)$29,379.24; and
(b)The balance to the Wife.
In the event that the Husband fails to provide a direction for payment as required by paragraph (1)(a) herein then all moneys payable to him from the net proceeds be held on trust for him.
Unless otherwise specified in these Orders:
(a)each party be solely entitled to all chattels, goods, motor vehicles, furniture, furnishings and any other property in the possession of such party as at this date;
(b)each party be solely entitled to any moneys, shares and debentures which stand in such party’s name as at this date;
(c)each party be solely entitled to any superannuation benefits held in such party’s name and each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other; and
(d)each party be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party’s name as at this date.
Each party do all such things including the signing of all documents to give effect to these Orders.
In the event that either party refuses or neglects to execute any deed or instrument that may be required to give effect to these Orders, the Registrar of the Court be appointed pursuant to s.106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
The Wife have liberty to apply within 28 days of the date of these orders in relation to the issue of costs.
The Wife forthwith cause her solicitors to serve a copy of these Orders on the Husband to his last known email address.
Subject to paragraph 6 herein, all extant applications are hereby dismissed.
AND THE COURT NOTES THAT:
(A)These Orders were made following a final hearing conducted on an undefended basis on 20 and 21 April 2015.
(B)These orders should be read in conjunction with the orders made by consent between the Applicant, Respondent and Intervenor on 20 April 2015 and the orders made by the Court on 21 April 2015.
IT IS NOTED that publication of this judgment under the pseudonym Muir & Muir is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 3903 of 2013
| MS MUIR |
Applicant
And
| MR MUIR |
Respondent
THE TRUSTEE FOR SANTONE FAMILY TRUST TRADING AS SANTONE LAWYERS PTY LIMITED
Intervenor
REASONS FOR JUDGMENT
Introduction
This is a property application by MS MUIR (“the wife”) against MR MUIR (“the husband”).
The proceedings came before me for Final Hearing for two days on 20 and 21 April 2015 (“the Final Hearing”). At the Final Hearing, the wife was represented Mr Harper of counsel. The husband appeared before the Court on 20 April 2015 as a self-represented litigant however, as will be elaborated upon further below, he did not attend Court on 21 April 2015 and the matter proceeded on an undefended basis.
By consent, the husband’s previous lawyers, Santone Lawyers, were permitted leave to intervene in the proceedings and it was further agreed that upon the settlement of the sale of the former matrimonial home certain monies would be paid to them from the husband’s share of the proceeds of the sale.
Unless otherwise stated, any statutory references in these reasons will be to the Family Law Act 1975 (“the Act”).
Background
Relationship history
The wife was born on (omitted) 1953 and is currently aged 62 years. The husband was born on (omitted) 1956 and is currently aged 59 years. The parties married and commenced cohabitation on (omitted) 1989.
At the time of marriage the wife owned the property at Property B which became the parties’ matrimonial home (“the former matrimonial home”). The husband owned negligible assets at this time.
In 1992, the husband received an inheritance of $60,000 and it is conceded about $48,000 of that sum was paid into a joint account and used for joint expenses.
In 1995 the wife received a gift of $10,000 (but not an inheritance) following the death of her father. The wife asserts these monies were also used for joint expenses.
In (omitted) 1996, the wife transferred the former matrimonial home to herself and the husband as joint tenants and the parties obtained a loan from the (omitted) Bank for $50,000 by way of mortgage.
The husband was last in paid employment in August 2008. Before that time he worked in various roles on and off over the years though I note that his official occupation is as a (omitted). It appears the husband has worked with (employer omitted), as well as work in (omitted) and (omitted) work.[1] The wife worked throughout the marriage, except for a period of approximately nine months. From 1990 until (omitted) 1993 the wife worked as an (occupation omitted) at (employer omitted) and from (omitted) 1993 to date at (employer omitted).[2] In addition, in (omitted) 1992 the parties set up an organisation called ‘(omitted)’ in (omitted).
[1] Husband’s affidavit sworn 5 September 2013 and filed 6 September 2013, paragraph 16, 18, 21, 22. Wife’s affidavit sworn 4 July 2013 and filed 12 July 2013, paragraph 30.
[2] Wife’s affidavit sworn 4 July 2013 and filed 12 July 2013, paragraph 29.
The wife has solely paid all the mortgage repayments to (omitted) Bank in respect of the former matrimonial home since August 2008 to date. From August 2008 until August 2014, the wife also paid all personal loan repayments, utility charges, council and water rates and house insurance premiums payments for the parties. The wife also paid the husband's car insurance payments from August 2008 until 17 September 2013.
The wife asserts the parties separated under the one roof on 11 January 2011.[3] While the husband acknowledges that the parties began sleeping in separate bedrooms in January 2011, he disputes the date of separation as alleged by the wife and instead submits it occurred in July 2012 when the parties ceased assisting each other with household tasks. It would appear that the husband advised Centrelink of the separation in July 2012 (as confirmed by their letter to him dated 1 August 2012).[4] That said, it would also appear that the husband gave Centrelink similar information in mid 2010 that the parties were separated at that time (as confirmed by the Centrelink letter to the wife dated 30 August 2010).[5]
[3] Wife’s affidavit sworn and filed on 23 March 2015, paragraph 7.
[4] Husband’s affidavit sworn 5 September 2013 and filed 6 September 2013, paragraph 7 and Annexure ‘A’.
[5] Wife’s affidavit sworn and filed on 23 March 2015, paragraph 7 and Annexure ‘B’.
At this point of my reasons I note that a matter of some contention is the withdrawal by the husband in July 2011 of the amount of $57,536 from his superannuation.
I also note that in early 2014, the wife borrowed $7,000 from her mother in order to pay for repairs to the former matrimonial home in preparing that property for sale.
The wife left the former matrimonial home on 15 March 2014. At the time of the final hearing the wife understood that the husband remained in the former matrimonial home.
Procedural history
These proceedings first came before me on 10 September 2013. The parties were subsequently referred to a Conciliation Conference and interim consent terms approved which provided for further disclosure and for various works to be done to the former matrimonial home to prepare it for sale.
The parties were unable to resolve their dispute at a Conciliation Conference before Registrar Chayna on 11 November 2013.
When the parties returned for mention before me on 4 February 2014, I was advised that the matter had ‘settled in principle’. Clearly this settlement did not eventuate and orders were required for disclosure and the matter listed into the callover.
At the callover I listed the matter for final hearing for two days in April 2015 and ordered the parties to attend a further Conciliation Conference in the intervening period. I also made the following orders in respect of selling the former matrimonial home:
“4.In the event that the parties do not agree within the next 14 days on which real estate agent is retained to sell the parties relevant property
a. within a further seven (7) days the Respondent nominate and provide contact details and fee information for three (3) real estate agents; and
b. within a further fourteen (14) days thereafter, the Applicant select a real estate agent from the list; and
c. the parties thereafter forthwith retain the selected real estate agent and each party be liable for one half of the total fees payable in respect of the real estate agents fees and costs.
5.In the event the parties are unable to advise the real estate agent as to the minimum sale price or in the event that the parties are unable to sell the property the parties forthwith instruct a single expert by end of October 2014, and in the event the parties cannot agree on a single expert, then
a. the Applicant nominate and provide contact details, fee information and availability for three (3) accredited valuers; and
b. within a further seven (7) days thereafter, the Respondent select a valuer from the list; and
c. the parties thereafter forthwith prepare a joint letter of instruction to be sent to the valuer and each party be liable for one half of the total fees payable in respect of the valuation of the former matrimonial home.”
Unfortunately, the parties were again unable to settle their dispute at the Conciliation Conference before Registrar Crawford on 5 March 2015 mainly due to disagreement on the value of the former matrimonial home and the husband’s allegations as to the wife’s non-disclosure of various matters (that included allegations that the wife had further bank accounts, had received a lotto win, had further superannuation entitlements and owned a second motor vehicle). Also of concern was the notation included in the Registrar’s bench sheet that stated that the husband had threatened to express his dissatisfaction about the legal process on Facebook and by “referring the matter to ‘A Current Affair’”. I note that the Registrar also indicated that she alerted the husband to the provisions of s.121 of the Act.
Trial directions were made by me on 9 March 2015 and I discharged paragraph 4 of the 4 September 2014 orders and made the following orders in lieu:
“a)The Respondent, within the next seven (7) days, provide contact details and fee information for three (3) real estate agents located in the area where the relevant property is situated (“the list”),
b)The Applicant, within seven (7) days of receiving the details pursuant to sub-paragraph (a) herein, select a real estate agent from the list; and
c)The parties thereafter forthwith retain the selected real estate agent and each party be liable for one half of the total fees payable in respect of the real estate agents fees and costs.”
As stated, on 20 April 2015, the matter came before me for the listed two day final hearing. On 13 April 2015, the husband’s previous lawyers, Santone Lawyers, filed an Application in a Case in respect of unpaid legal costs which I granted short service and leave to be made returnable to 20 April 2015. Mr Othen of counsel appeared for Santone Lawyers and by consent the following orders were made:
“PENDING FURTHER ORDER THE COURT ORDERS THAT:
1.That Santone Lawyers are granted leave to intervene in the proceedings.
2.That forthwith upon the settlement of the sale of the property situated at and known as Property B in the State of New South Wales pursuant to agreement of the parties or order of this Court the parties shall do all acts and things and sign all documents necessary to cause, whether by way of authority to the parties’ conveyancer or as otherwise required by Santone Lawyers, distribution to Santone Lawyers from the husband’s share of the proceeds of the sale of the said property the sums of:-
(a) $14,155.43 plus interest calculated on a daily basis at 8.5% per annum from 24 December 2014 to the date of payment; and
(b) $1,000.00 payable pursuant to order 5.
3.That Santone Lawyers has leave to forward a copy of these orders to those acting on the conveyance of the said property for the parties.
4.That the solicitor for the wife shall inform Santone Lawyers of the identity of the conveyancer who acts on the said sale once this becomes known.
5.That the husband shall pay the costs of Santone Lawyers assessed at $1,000.00, such costs payable in accordance with order 2(a) otherwise there be no order as to costs.
6.The Application in a Case filed 13 April 2015 is otherwise finalised and shall be removed from the list of pending applications.”
During the course of what I would describe as ‘housekeeping issues’ before commencing the final hearing, and which included a discussion as to whether an interim determination may be needed regarding the sale of the former matrimonial home and the balance sheet generally, the husband interjected and ultimately submitted that I was being ‘a bully’ or was bullying him. When the husband repeated his ‘bullying’ assertion I invited him to apologise to the Court and gave him the benefit of a brief adjournment to regain his composure. When I returned to the bench a short time thereafter the husband did not appear. He was called outside the Court room but did not respond to the call. He had not indicated to the other party’s legal representatives, my deputy associate (or any other Court employee to my Chamber’s knowledge) that he was leaving the Court building. Given this development I stood the matter down to 10:00am the following day and noted that the wife’s solicitor intended to cause a letter to be emailed to the husband indicating inter alia, that should he fail to appear on the following day that the wife may seek leave for the final hearing to thereafter proceed on an undefended basis. I would note that it had been my intention to go through my Re F: Litigants in person guidelines [2001] FamCA 348; (2001) FLC 93-072; 27 Fam LR 517 (“Re F”) obligations with the husband when he regained his composure and, in particular, provide him with an overview of the relevant legislative provisions and the process. Indeed my chambers had printed copies of the relevant legislative provisions, a copy of the Re F guidelines and a copy of the decision of In the marriage of Robb [1994] FamCA 36 (referred to earlier during preliminary submissions) ready to hand to the husband (copies of which were given to the wife’s legal representatives).
The following day (21 April 2015), the husband did not appear and he was called outside the Court at 10:25am, 10:45am and 10:57am but did not appear nor cause a legal representative to appear on his behalf. In addition, there was no evidence that the husband had communicated to either to the wife, the wife’s lawyers, my Chambers or the National Enquiry Centre that he would not be attending Court or was running late.
Consequently, the wife sought leave to proceed with the hearing on an undefended basis. In granting this leave I indicated that I was satisfied that there was evidence that the husband was aware of the proceedings and he had clearly, for whatever reason, decided not to participate further. That is disappointing. The hearing proceeded later that day at the conclusion of which I reserved my decision.
At the conclusion of the hearing I was also persuaded by the wife to make the following interim orders for the reasons that I gave in Court that day:
“4. The Wife shall have and hereby does have all authority necessary to sign on behalf of the Wife and the Husband (without his signature) an agency agreement with the nominated agent for the sale of the property known as Property B (“the former matrimonial home”).
5. The Wife shall have and hereby does have all authority necessary to sign on behalf of the Wife and the Husband (without his signature) any documents including but not limited to consents, authorities, and transfers necessary to accept an offer to buy the former matrimonial home and to do all things necessary to give effect to that sale without the further consent or signature of the Husband provided that:
a.The sale price exceeds the valuation amount;
b.The sale proceeds after payment of the outstanding mortgage, the payment to Santone Lawyers pursuant to orders made 21 April 2015, the (omitted) Bank debt in the name of the parties and sale expenses, is held on trust by the solicitor for the Wife to be held pending further order of the Court.
6. Liberty be granted to the Wife to apply to the Court on not less than 3 days’ notice to seek a relisting of the matter in regards to issues arising in respect of these orders.
7. The Wife's costs be reserved.”
It was common ground between the parties that the former matrimonial home had to be sold. Moreover, orders were made on 4 September 2014 and on 9 March 2015 providing for its orderly sale. In accordance with those orders, I note that the husband had nominated three potential agents and the wife had selected Mr J of (omitted) Realty from that list. The parties then instructed a licenced valuer to value the property (see Exhibit “AW4”). However, there was evidence that the husband subsequently declined to sign an agency agreement with the nominated agent.
Legislative requirements
Property proceedings between parties to a marriage are governed by the provisions of Part VIII of the Act, and more specifically, s.79.
Section 79
Section 79(1) of the Act states that the Court may make such orders as it considers appropriate altering the interests of the parties in the property.
Section 79(2) of the Act 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.”
If the Court is satisfied that it is just and equitable to make an order altering the interests of the parties in the property, s.79(4) of the Act sets out those matters which the Court must take into account when considering what orders should be made. Section 79(4) provides:
“In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)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.”
Section 79(4)(e) requires the Court to have regard to the following matters set out in s.75(2) of the Act.
Approach to exercise of discretion
The approach to the exercise of the Court’s discretion has been outlined in numerous judicial decisions. The High Court in the decision of Stanford v Stanford [2012] HCA 52 (“Stanford”) held that before making any orders adjusting the parties’ interests in the property pursuant to s.79 of the Act, the Court must, as required by s.79(2) of the Act, determine that is “just and equitable” for the Court to do so. At [42] the High Court stated that in most cases:
“The just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).”
Prior to the decision in Stanford, the preferred approach in determining property matters was that set out by the of the Full Court of the Family Court of Australia (“Full Court”) in the matter of Hickey v Hickey [2003] FamCA 395; (2003) 30 Fam LR 355; (2003) FLC 93-143. At [39] Nicholson CJ, Ellis and O’Ryan JJ stated:
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. Firstly, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the court should identify and assess the relevant matters referred to in 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 of the parties established at step two. Fourthly, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…”
This approach was reconsidered by the Full Court in Bevan v Bevan [2013] FamCAFC 116; (2013) FLC 93-545 (“Bevan”) in light of the High Court’s comments in Stanford. At [71], Bryan CJ and Thackray J stated:
“71. Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.”
In Bevan & Bevan (No.2) [2014] FamCAFC 19; (2014) FLC 93-572 the Full Court, having upheld the appeal against the decision at first instance, proceeded to re-determine the property application before the Court. At [18] to [19], Bryant CJ and Thackray J stated:
“18. Senior counsel for the husband structured his submissions by reference to the “four-step” approach to property settlement applications discussed in our earlier reasons. By way of explanation for doing so, senior counsel said:
16. The adoption of the above [four-step] approach is not intended to presuppose a positive answer to the question posed [by] section 79(2), nor to suggest that it is an approach appropriate in all proceedings. Rather, and provided that the fundamental propositions outlined by the High Court in Stanford (2012) … are not obscured, such approach is intended to and does no more than provide a principled, disciplined and structured means by which all of the matters arising for consideration pursuant to section 79 can be conveniently and properly identified and assessed.
17. Further, and whilst not said critically nor in a matter which seeks to cavil with the decision in this appeal, no other approach to the determination emerges readily from either Stanford nor the decision in this appeal. It is respectfully submitted that provided that the ‘fundamental propositions’ articulated in Stanford are not obscured, and whilst not universally so as has always been recognised, the approach set out above continues to provide a proper, transparent, certain and structured approach to the presentation and determination of applications pursuant to section 79.
19. We have no issue with what senior counsel has said about the utility of the four-step process, which we accept provides a convenient way to structure both submissions and judgments, provided the caveat mentioned is not overlooked.”
The “caveat” referred to by the Full Court is the requirement that the Court must first be satisfied that it is just and equitable to make an order adjusting property between the parties.
In the subsequent decision in Rockman & Rockman [2014] FCCA 1966 (“Rockman”), Judge Bender noted at [83] that the “High Court in Stanford neither disapproved or approved the four steps process”. I agree with Her Honour’s observation. That said, the High Court did lay down what they described as three “fundamental propositions” which would provide useful guidance to trial judges when undertaking the task under s.79 of the Act. I note that in Bevan,[6] Bryant CJ and Thackray J summarised those fundamental principles at [73] as follows:
“1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters of s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.”
[6] Bevan v Bevan [2013] FamCAFC 116; (2013) FLC 93-545.
I also agree with the view expressed in Rockman that subsequent Full Court and single judge considerations of Stanford suggest that the path that may best “illuminate the path to the ultimate result” could now best be described as the following “five step process”:
“(a)firstly, what is the parties’ legal and equitable interests in property;
(b)secondly, is it just and equitable to make an order adjusting the parties legal and equitable interests in that property;
If the answer to (b) is in the affirmative:
(c)thirdly, identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the contribution-based entitlements of each party as a percentage of the net value of the property of the parties;
(d)fourthly, identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) and s.75(2) of the Act and determine the adjustment, if any, that should be made to the contribution-based entitlements of each party as a percentage of the property of the parties; and
(e)fifthly, given s.79(1) empowers the court to make such orders affecting the parties’ interest in the property as are appropriate, determine what order, if any, altering the parties’ interests are “appropriate” to enable the parties’ entitlements as determined pursuant to steps (c) and (d) to be achieved.”[7]
[7] Rockman & Rockman [2014] FCCA 1966 at [84].
The Court will adopt this process for this decision.
Section 80
In addition to the specific powers provided by s.79(1) to adjust property interests, s.80(1) provides the Court with the following general powers:
“The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
(ba) order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
(c) order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(d) order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(e) appoint or remove trustees;
(f) order that payments be made direct to a party to the marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage;
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
(i) impose terms and conditions;
(j) make an order by consent;
(k) make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and
(l) subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.”
Section 81
For completeness, I note that the Court must also consider s.81 of the Act which states:
“In proceedings under [Pt VIII], other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.”
While s.81 of the Act is clearly relevant to the making of a property order, it is neither a ‘head of power’ nor an absolute requirement. This was the view of the Full Court in In the Marriage of Crapp and Crapp (No.2) (1979) 5 Fam LR 47; (1979) FLC 90-615:
“Firstly s 81 is in the nature of an exhortation by the legislature to the courts and is not a separate source of power and secondly the section itself states that the policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings is only to be taken ‘as far as (is) practicable’. Nevertheless it is true to say that it is unsatisfactory in the general context of the philosophy of the Family Law Act for a really significant issue between parties who are divorced and have gone their separate ways to remain in suspended animation for a number of years.”[8]
[8] (1979) 5 Fam LR 47 at 61 (per Fogarty J; Pawley and Dovey JJ agreeing).
The practical effect of s.81 of the Act is that the Court must endeavour to make an order that finalises the financial relationship between the relevant spouses, but it does not require the Court to make an order that achieves finality. That said, for the comments previously made, and as far as it can be achieved, I see clear benefit in orders being made that will finalise the financial relationship between the parties to this case.
The Court will now consider the proposals for property settlement in light of the statutory considerations and available evidence.
Proposals
Wife
The wife argues that the assessment of contributions should favour her, in percentage terms of 65% and to the husband of 35%. The wife further argues that there should be no further adjustment pursuant to s.75(2) and related factors and that the orders she proposes are just and equitable.
The orders sought by the wife to achieve the outcome she seeks are as follows:
“1)That the parties take all steps, sign all documents and do all things necessary to sell the property known as Property B ("”the former matrimonial home" ).
2)To give effect to Order 1
a)The wife is appointed trustee for sale of the former matrimonial home the property in which property shall vest in the trustee for sale to be held on trust to sell the same and then to hold and disburse the sale proceeds in accordance with the following order.
b)The husband is restrained and an injunction is granted restraining him from doing any act or thing in connection with the sale of the former matrimonial home save in response to a request in writing from the wife.
c)The husband shall give vacant possession of the home to the wife within 21 days of the date of these Orders.
3)Upon the sale of the Property B property the proceeds of sale be dispersed as follows:
a)to discharge the mortgage secured over the property to the (omitted) Bank
b)payment of agent's commission
c)payment of conveyancing costs
d)payment of adjustable rates and outgoings
e)payment to discharge the joint (omitted) Bank loan
f)payment to Ms I the amount of $7000
g)repayment to the wife of any further sums expended making the property ready for sale
h)payment of 60% of the balance then remaining to the wife
i)payment of the balance then remaining to the husband.
4)That In the event that the Respondent Husband Mr Muir for any reason fails to execute any transfer, deed or other document necessary to give effect to these Orders that a Registrar of the Federal Circuit Court of Australia at Sydney be appointed pursuant to s 106A of the Family Law Act 1995 to execute any other documents, transfers or deeds on behalf of the Applicant and to do all acts and things necessary to give force and effect to these Orders and further that the Respondent pay the costs of the Applicant on a lawyer/own client basis in relation to the obtaining of the Applicant's signature pursuant to these Orders.
5)That from the date of these Orders and unless otherwise specified In these Orders except for the purposes of enforcing payment of any money due under these or any subsequent Orders:
a)Each party shall be solely entitled to the exclusion of the other to all property in the possession or control of such party as at this date including any choses in action, superannuation, jewellery, furniture, furnishings, shares and motor vehicles.
b)Moneys standing to the credit of the parties in any bank accounts to be the property of the party In whose name such bank account is held.”
I note that some of the abovementioned orders sought by the wife were reflected in the interim orders made on 21 April 2015.
Husband
It remains unclear exactly what outcome the husband seeks.
In his Response the husband seeks for the former matrimonial home to be sold by private treaty (or otherwise by auction) and the net proceeds dispersed in payment of the sale expenses, to mortgagee, to the parties for out-of pocket expenses incurred in preparing the house for sale, payment of the “joint debt to Ebsworth Lawyers”, payment of the joint personal loan to (omitted) then the net balance divided 40% to the wife and 60% to the husband. He also sought an order for the wife to receive 50% of his superannuation, for the parties to otherwise have sole right, title and interest in any other property in their possession and/or control and for an order under s.106A of the Act.
When the husband was before me on 20 April 2015 it appeared that he may be advocating for the Court to adopt a ‘two pool’ approach to the assessment of contributions and for there to be an ‘equalisation’ of the parties superannuation. That said, he provided no evidence of having afforded the relevant trustee(s) procedural fairness, and in any event it is unclear as to whether he was actually pressing for this outcome.
In addition, it appeared that the husband was seeking an adjustment in his favour pursuant to s.75(2) and related factors, although he did not articulate the size of the adjustment sought.
Issues
The following issues were in dispute at the final hearing:
·whether the parties have provided ‘full and frank disclosure’ of all relevant property and financial resources;
·‘balance sheet’ issues being:
o what value should be attributed to the former matrimonial home; and
o whether there is a matrimonial debt due to Ebsworth Lawyers.
·the parties’ contributions made prior to, during and following the relationship; and
·the parties’ respective future needs and obligations.
Evidence
Wife
The following documents were relied upon by the wife:
·Initiating Application filed on 12 July 2013;
·the wife’s affidavit sworn 4 July 2013 and filed 12 July 2013;
·the wife’s affidavit sworn and filed 23 March 2015;
·the wife’s affidavit sworn and filed 20 April 2015; and
·the wife’s Financial Statement sworn and filed on 23 March 2015.
The wife also tendered the following documents:
·Two letters sent by express post to the husband dated 23 and 24 March 2015 serving court documents (“AW1”);
·Letter from the husband to the wife’s solicitor dated 9 April 2015 regarding the balance sheet, disclosure and so on (“AW2”);
·Email with attached letter sent by wife’s solicitor to the husband dated 20 April 2015 regarding the final hearing proceedings on 21 April 2015 (“AW3”);
·Valuation and report of the former matrimonial home dated 16 December 2014 by Independent Property Valuations Pty Ltd (“AW4”);
·Letter from wife’s solicitor to the wife in relation to incurred costs and anticipated hearing costs dated 7 April 2015 (“AW5”); and
·Letter from wife’s solicitor to the husband dated 28 January 2011 after instructions were taken from the wife (“AW6”).
·Letter from wife’s solicitor to the husband dated 6 April 2011 seeking a response to an earlier letter (“AW7”); and
·Letter from wife’s solicitor to the husband dated 12 March 2015 requesting further particulars in respect of ‘(omitted)’ (“AW8”).
Overall, the wife presented as a well-spoken and articulate witness. To provide overall procedural fairness, the Court asked the wife a number of questions, and put certain propositions to her, consistent with the Court’s understanding of the husband’s case. The wife made specific denials that she had ever been the beneficiary of a large lotto or lottery win, that she had other superannuation that had not been disclosed or that she owned another ‘red’ motor car (other than the car referred to in her financial statement). The wife was also asked questions about the alleged debt to Ebsworths and, apart from what the husband told her, she denied knowledge about the husband’s allegations in this regard. The wife specifically denied receiving any letters of demand or being served with any court-related documents about the alleged debt.
I note that the wife asserts, through her legal representatives, that the husband failed to provide the documents she requested relevant to the entity ‘(omitted)’ (including the entity’s bank account details) or the husband’s superannuation accounts.
Husband
I have assumed that the husband relies upon, and would ask the Court to read, the following documents:
·Response filed 6 September 2013;
·the husband’s Affidavit sworn on 5 September 2013 and filed 6 September 2013; and
·the husband’s Financial Statement sworn on 5 September 2013 and filed 6 September 2013.
It is disappointing that the husband decided to disengage from these proceedings at the commencement of the final hearing. His actions denied the wife the opportunity of testing the husband’s evidence and raises an issue about the credibility of that evidence.
Discussion
The Court will now consider the proposals and the wife’s submissions in light of the legislative requirements and the available evidence.
Identifying and valuing the parties’ interests
As stated, the Court must first identify and value the parties’ property, liabilities and financial resources. Generally speaking, the identification and valuation is at the date of the final hearing.[9] This will enable the Court to ascertain the net property pool.
[9] Warne & Warne (1982) 8 Fam LR 388 at 389 (per Simpson J; Strauss and Hase JJ agreeing); also see AJO & GRO (2005) 33 Fam LR 134 at 142 (per Holden, Warnick and Le Poer Trench JJ).
Prior to considering this step further, the Court will consider the preliminary issue of the mutual allegations made regarding lack of disclosure of the parties financial circumstances.
Issues of disclosure
Both parties make allegations that the other has not made full and frank disclosure.
There is a clear obligation on a party to proceedings in family law matters to make a full and frank disclosure of all relevant financial circumstances. The mere compliance with rules of the Court or practice directions does not alter the basic principle of the need for full and frank disclosure.[10]
[10] As discussed in the cases of In the Marriage of Briese (1985) 10 Fam LR 642; [1986] FLC 91-713 and Oriolo v Oriolo (1985) 10 Fam LR 665; [1985] FLC 91-653.
The Rules of this Court provide for all parties to make full and frank disclosure of all relevant financial circumstances in family law matters.[11]
[11] See regulation 24.03 of the Federal Circuit Court Rules 2001.
Apart from requiring each party in financial proceedings to file a Financial Statement, the Rules also require the production and supply of relevant documentation. If one party fails to fulfil that obligation, it would theoretically be “open to that party to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require”.[12]
[12] Giunti and Giunti (1986) 11 Fam LR 160 at 165; [1986] FLC 91-759 at 75,555.
As the Full Court observed in Giunti and Giunti (1986) 11 Fam LR 160; (1986) FLC 91-759:
“It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.”[13]
[13] Ibid.
In the case of In the Marriage of Briese (1985) 10 Fam LR 642; (1986) FLC 91-713 (“Briese”), Smithers J, after referring to the decision of the House of Lords in Livesey v Jenkins [1985] All ER 106, stated:
“I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required. "In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred.”[14]
[14] In the Marriage of Briese (1986) FLC 91-713 at 75,181.
These comments were approved by the Full Court in the case of Oriolo v Oriolo (1985) 10 Fam LR 665; [1985] FLC 91-653 (“Oriolo”).[15] Moreover, the Full Court in Oriolio also approved[16] the following ‘principles’ stated by Smithers J in Briese [emphasis added]:
“The wife has sought an order that the husband pay her legal costs of the proceedings. She relies upon the husband's conduct of the litigation, which in a number of respects I have referred to in this judgment. This conduct has had the effect of very greatly increasing the costs of the wife. The husband's counsel submitted that it was a matter for the wife to pursue her rights under the Family Law Regulations and that there was no positive obligation on the husband to do more than comply strictly with the Regulations and with orders of the court. He likened his client's position in this respect to that of a defendant in a civil action.
In my opinion this submission is not correct. I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner. The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure, but as providing avenues towards disclosure. The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.
In this case it is possible, but I believe largely with the benefit of hindsight, to suggest one or two other strategies which the wife could have employed in her search for the facts before the trial. On the whole however, I do not believe that her case was conducted other than appropriately and reasonably. It was in the power of the husband to curtail the costs by making adequate disclosure.” [17]
[15] Oriolo v Oriolo (1985) FLC 91-653 at 80,256-7.
[16] Ibid at 80,256.
[17] In the Marriage of Briese (1986) FLC 91-713 at 75,180-1.
The issue of deliberate non-disclosure was raised in the case of Black & Kellner (1992) FLC 92-287; 15 Fam LR 343 (“Black”). In Black, the Full Court found that the “assets of the parties could not be ascertained in full because of obvious non-disclosures.”[18] This non-disclosure impacted on the ability of the first instance Court to properly ascertain and distribute the matrimonial property. The matter before the Full Court was an appeal by the husband, who was the party who had not made full and frank disclosure, against an order entitling him to a miniscule portion of the property brought into the relationship by the wife. In his judgment, Nicholson CJ (with Ellis and Cohen JJ agreed) dismissed the husband’s appeal, stating:
“I might perhaps add that speaking for myself, although I note that there is no cross-appeal, I would have been disposed to find that the appellant was entitled to nothing, and certainly would not have interfered with a decision by his Honour dismissing the husband's claim entirely. Indeed it may well be that he was fortunate to get the award that he did.”[19]
[18] Black & Kellner (1992) 15 Fam LR 343 at 347.
[19] Ibid, at 348.
Moreover, in the case of Weir & Weir (1993) FLC 92-338; (1992) 16 Fam LR 154 the Full Court, (this time comprised of Nicholson CJ, Strauss and Nygh JJ) stated:
“It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”[20]
[20] Weir & Weir (1992) 16 Fam LR 154 at 159.
During the course of the proceedings, the husband raised allegations that the wife had failed to disclose that she had:
·benefited from a large lotto or lottery win;
·other superannuation that had not been disclosed; and that she
·owned another ‘red’ motor car (other than the car referred to in her financial statement).
As stated, these specific allegations were put to the wife by the Court during her oral evidence, and she denied each of them.
Given that no documentation was produced by the husband (in his affidavit material) to suggest that the wife either owned, or had an interest in, the alleged additional assets, the Court is unable to make the finding sought by the husband. Moreover, the Court is satisfied that the wife was truthful in her evidence.
The Court is also unable to make any finding as to the husband’s motives for choosing not to participate in these proceedings. As stated, his actions denied the wife the opportunity of testing the husband’s evidence and raises an issue, not just about the credibility of that evidence, but also whether the husband properly disclosed his true financial position.
In the Full Court decision in Chang & Su [2002] FamCA 156 (“Chang”), Kay, Dawe and Finn JJ found that where there has not been full and frank disclosure of financial circumstances by a party, it is open to a Court to find that an indeterminate undisclosed amount is held by one of the parties and to make property orders without reference to an overall pool.
The case of Chang was more recently considered by Judge Burchardt of this Court in Irvine & Irvine (No.2) [2013] FCCA 1076. At paragraph 78 of that decision his Honour found that:
“78.The wife should retain her car and any chattels in her possession. There is nothing the Court can do to value the husband’s assets. This is a case of the sort identified in the case of Chang v Su (2002) FLC 93-117. The Court has been deprived of any meaningful knowledge of the husband’s assets and possessions by virtue of his own adamantine refusal to participate in the proceeding. The Court should take a robust approach, and I have done so. The result, in my view, is eminently just and equitable.”
As previously stated, the wife alleges the husband did not disclose what became of the money he withdrew from his superannuation and what monies may have been available through the entity, (omitted). Clearly, given the circumstances, it is open to the Court to find that the husband has not fully complied with his obligation to provide ‘full and frank disclosure’.
Overall, I find that the pool of assets is not able to be fully ascertained given the lack of participation and evidence from the husband. That said, certain findings are still possible on the strength of the available evidence, as reflected below.
Balance sheet
At the commencement of the final hearing, the parties provided the following ‘joint balance sheet’.[21] With the exception of items 1 and 20, the values of the following listed assets and liabilities were agreed prior to the husband disengaging from the proceedings:
[21] In the table, J’ refers to jointly registered or other jointly owned property, ‘W’ refers to property registered in the wife’s name or otherwise legally owned by her or in her possession and ‘H’ refers to property registered in the husband’s name or otherwise legally owned by him or in his possession.
Non-Superannuation Assets 1. Property B (J) $710,000.00 (W)
$925,000.00 (H)2. Mitsubishi Lancer (insurance proceeds) (H) $7,496.28 3. (omitted) bank joint account (J) $0.79 4. (omitted) bank account (W) $1,691.94 5. (omitted) bank account (H) $371.98 6. (omitted) (H) $2,488.86 7. Household contents & furniture (J) $3,500.00 8. Ford Festiva (W) $1,850.00 Sub-total $727,399.85 (W)
$942,399.85 (H)Superannuation 9. (omitted) Bank (W) $134,265.82 10. (omitted) Super (H) $4,000.00 11. (omitted) Super (H) $195.00 12. (omitted) Superannuation (H) $2,553.92 13. (omitted) Superannuation (H) $4,182.87 Sub-total $145,197.61 Liabilities 14. Mortgage Property B (J) $59,534.28 15. Personal loan (omitted) (J) $4,070.06 16. (omitted Mastercard (W) $13,777.23 17. (omitted) Mastercard (W) $12,574.17 18. (omitted) Mastercard (W) $11,564.19 19. (omitted) Visa card (H) $16,199.22 20. Debt - Ebsworth Lawyers (J) Nil (W)
$7,000.00 (H)Sub-total $117,719.15 (W)
$124,719.15 (H)Net Assets Non-Superannuation Assets $727,399.85 (W)
$942,399.85 (H)Superannuation $145,197.61 (less) Liabilities $117,719.15 (W)
$124,719.15 (H)Total net assets $754,878.31 (W)
$962,878.31 (H)
Areas in dispute
To determine the net available property pool several matters require determination:
·the value of the former matrimonial home;
·whether there is a debt owing to Ebsworth Lawyers, and if so, should it be included as a matrimonial liability or not.
The value of the former matrimonial home
The dispute over this item is somewhat of a non-issue given that the parties actually agreed that the former matrimonial home had to be sold. As stated, I made further orders on 21 April 2015 which allowed the wife to sign an agency agreement as well as any consents, authorities and transfers necessary to sell the former matrimonial home without the husband’s signature.
Consequently, it is not necessary for the Court to make a finding as to the value of the former matrimonial home in circumstances where there are operative orders requiring its sale. It is, therefore, appropriate that this property (and the associated mortgage debt) be placed into a separate pool. The net proceeds of sale can thereafter be subject to an order that applies the relevant percentages to be determined in favour of each party.
Alleged debt to Ebsworth Lawyers
The wife argues that this liability relates to legal costs incurred by the husband in previous litigation involving the entity, (omitted). The wife asserts that the husband made a unilateral decision in relation to that litigation which was not for the benefit of the parties.[22] The husband has not produced any documentation to establish liability for this debt for either or both of the parties. The wife questions whether this debt even exists and is enforceable and, in any event, submits that it is a matter for the husband to deal with.[23]
[22] Transcript, 21 April 2015, page 7.
[23] Transcript, 21 April 2015, page 7.
Given the lack of evidence, the Court is unable to find that this debt exists. Consequently it will not be included in the balance sheet.
Balance sheet findings
Given the above determinations, the Court finds it appropriate for the balance sheet to reflect two ‘pools’ of property:
·the first ‘pool’ to comprise the net value of the former matrimonial home (less sale expenses and the discharge of the relevant mortgage and personal ‘(omitted)’ loan); and
·the second ‘pool’ to comprise the balance of the matrimonial property valued at least $108,482.65.
The value of first pool, will be determined upon the sale of the former matrimonial home, is estimated to be not less than $626,395.66:
First ‘Pool’ Former matrimonial home (J) Determined on sale Liabilities Mortgage Property B (J) $59,534.28 Personal loan (omitted) (J) $4,070.06 Sub-total $63,604.34 Total net assets Determined on sale
Based upon a valuation of $710,000.00 (as proposed by the wife), and allowing a deduction for sale costs estimated at $20,000.00, in addition to paying the outstanding liabilities, the net sum that may be obtained would be approximately $626,395.66.
The value of the second pool, being $108,482.65, is made up as follows:
Second ‘Pool’ Mitsubishi Lancer (insurance proceeds) (H) $7,496.28 (omitted) bank joint account (J) $0.79 (omitted) bank account (W) $1,691.94 (omitted) bank account (H) $371.98 (omitted) (H) $2,488.86 Household contents & furniture (J) $3,500.00 Ford Festiva (W) $1,850.00 Sub-total $17,399.85 Superannuation (omitted) Bank (W) $134,265.82 (omitted) Super (H) $4,000.00 (omitted) Super (H) $195.00 (omitted) Superannuation (H) $2,553.92 (omitted) Superannuation (H) $4,182.87 Sub-total $145,197.61 Liabilities (omitted Mastercard (W) $13,777.23 (omitted) Mastercard (W) $12,574.17 (omitted) Mastercard (W) $11,564.19 (omitted) Visa card (H) $16,199.22 Sub-total $54,114.81 Net Assets Non-Superannuation Assets $17,399.85 Superannuation $145,197.61 (less) Liabilities $54,114.81 Total net assets $108,482.65
Is it just and equitable to make any order?
The parties in this matter had a long marriage of some 20 years. They have been separated for over four years according to the wife, and for at least three years according to the husband. Little turns on the exact date of separation in the circumstances of this case as the parties are both before the Court seeking orders altering their property interests, including an order for the sale of the former matrimonial home and a division of the net proceeds.
The Court is satisfied that this is a matter where it is just and equitable that orders be made adjusting property between the parties.
Contributions
As stated, the Court is required to consider the parties’ contributions made on and from the commencement of their relationship,[24] during their relationship and following separation.[25]
[24] In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499.
[25] In the Marriage of Ferraro (1992)16 Fam LR 1; (1993) FLC 92-335.
Financial and non-financial contributions
The parties were in a relationship of some twenty years in duration.
The wife brought the former matrimonial home (subject to a mortgage) into the relationship. The wife argues that this pre-relationship contribution represents as high as 85%, and as low as 75%, of the equity in the property.[26]
[26] Transcript, 21 April 2015, p.6.
There is evidence that in the early to mid 1990’s, the husband made a financial contribution to the relationship by way of an inheritance received from his late father’s estate. The husband asserts that he received sums totalling $70,000.[27] The wife believes the amounts received totalled $60,000 and she accepts that there is evidence from the (omitted) Bank records that monies were received between June 1994 and October 1995 totalling $48,129.75.[28]
[27] Husband’s affidavit sworn 5 September 2013 and filed 6 September 2013, paragraph 24.
[28] Wife’s affidavit sworn and filed on 23 March 2015, paragraph 18.
The wife also asserts that she received the gift of $10,000.00 from her mother in 1995, and following her father’s death, and that these funds were used for home renovations and household acquisitions and expenses.[29]
[29] Ibid, paragraph 19.
The wife further asserts that she was the main income earner during the relationship. Moreover, she asserts that she has paid all the mortgage payments post separation notwithstanding that the husband remained living there.
There is evidence that the husband received a superannuation payment of $57,536.00 in July 2011. However, it is not clear what has happened to those funds. The wife asserts that these monies were used by the husband for his own purpose and benefits.[30] It is clear from the relevant bank statements that the husband withdrew some $35,000.00 in the space of about six weeks. It is noteworthy that the wife requested the husband to provide the ‘(omitted)’ accounts for this period but the husband failed to provide same. The wife therefore submits that the husband has not adequately explained what he used those funds for and that the money was not used for joint purposes.[31] Consequently, the wife argues that this either increases the significance of her contributions or should be considered as a relevant fact for the purposes of s.75(2)(o) of the Act (which is discussed later in this reasons).[32]
[30] Ibid, paragraphs 35-36 and Annexures ‘F1’ to ‘F7’.
[31] Transcript, 21 April 2015, p.8.
[32] Transcript, 21 April 2015, p.9.
It is clear that the parties disagree as to how their post separation contributions should be assessed. I am satisfied that the evidence confirms the wife’s assertion that she has been meeting the costs of the mortgage and insurance over the former matrimonial home since separation. I note that the husband has had sole occupation of the home since March 2014.
Overall, I am satisfied that the financial and non-financial contributions of the wife exceed that of the husband.
Family contributions (as homemaker and parent)
In addition to her contributions made pursuant to s.79(4)(a) and (b), I am also satisfied that the wife was the primary homemaker for the parties.
That said, the wife concedes that the husband contributed to the care of the wife’s children from a previous relationship and I will consider this under s.75(2)(o) in line with recent case law.
I note that the husband also raises a ‘lost opportunity’ argument.[33] In summary, the husband argues that he was offered a number of employment opportunities outside Sydney and overseas which he asserts he declined due to the wife’s wish to remain living in Sydney. The husband does not, however, enclose any independent evidence of these offers of employment in his affidavit. In response the wife, while acknowledging that these ‘offers’ were made, asserts that there were other factors which led to the offers being withdrawn or declined.[34] During submissions, Mr Harper stated:
“The husband makes complaints about the wife, one would think aimed at diminishing her contributions. And in my submission, having heard the wife’s evidence, that’s not appropriate. It’s not appropriate for him to say that he was held back because of her decisions. They made a number of joint decisions and they also made a number of decisions which it seems the husband made unilaterally.”[35]
[33] Husband’s affidavit sworn 5 September 2013 and filed 6 September 2013, paragraphs 38-47.
[34] Wife’s affidavit sworn and filed on 23 March 2015, paragraphs 45-48.
[35] Transcript, 21 April 2015, p.6.
Overall I find that both parties have made a contribution to the family pursuant to s.79(4)(c).
Global or asset-by-asset assessment of contributions
Given the circumstances of this case, in particular the length of the parties’ marriage, the ‘global’ approach to the assessment of contributions would be the most appropriate. That said, as previously stated, I will adopt a ‘two pools’ approach (ie. separating the former matrimonial home into a separate pool) given that there are interim orders in force for the sale of the former matrimonial home.
I also note that the husband appeared to advocate for a ‘two pools’ approach separating superannuation into a separate pool. Given the evidence, the Court does not agree. Consequently the parties’ superannuation entitlements will be considered in the pool of net assets excluding the former matrimonial home.
Contributions analysis
The wife seeks that contributions be assessed as 65%/35% in her favour.
As stated above, the husband appeared to seek an outcome where he would receive about 60% of the non-superannuation pool and 50% of the superannuation pool.
In the assessment of contributions, the Court has assumed that the husband is arguing that his own competing contributions would act to erode the significance of the wife’s pre-marriage contribution. In this context, I note the case of In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844 where the Full Court stated:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution…”[36]
[36] In the Marriage of Pierce (1998) 24 Fam LR 377 at 386-387; (1999) FLC 92-844 at 85,881 (per Ellis, Baker and O’Ryan JJ).
Clearly some weight must be attributed to the property interests of the wife that were brought into the marriage, in particular the former matrimonial home. That said, the competing contributions made by the parties post-cohabitation and post-separation need to be appropriately considered.
In percentage terms, and in respect of both pools, I am satisfied and find that the assessment of contributions favours the wife 65% to the husband’s 35%.
Section 75(2) (and related) factors
As stated, the Court must have regard to the relevant factors under s.79(4)(d) to (g) of the Act in light of the evidence.
Section 79(4)(d): effect of any proposed order upon the earning capacity of either party to the marriage
As stated, both parties sought orders for the sale of the former matrimonial home and for the net proceeds to be divided.
There is no evidence to suggest that the division of the other assets will impact upon either party’s earning capacity.
Section 79(4)(e): matters referred to in sub-section 75(2) so far as they are relevant
(a)The age and state of health of each of the parties
The wife is in her early 60’s and the husband is in his late 50’s.
The evidence would suggest that the wife is in good health, although she asserts that she does have some osteoarthritis in her right knee.[37]
[37] Wife’s affidavit sworn and filed on 23 March 2015, paragraph 3.
The husband suffered a brain injury when he was five years old.[38] He asserts that he was diagnosed with temporal lobe epilepsy in his mid-30’s for which he underwent surgery in 1990.[39] Despite this medical condition, the husband’s evidence is that he has been seizure free for 18 of the last 23 years (i.e. up to the date of his affidavit),[40] and that he does not believe that his brain injury currently affects his capacity to work.[41] That said, the husband’s evidence is that he is often questioned during job interviews about his injury given the visible scar on the side of his head.[42]
(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
[38] Husband’s affidavit sworn 5 September 2013 and filed 6 September 2013, paragraph 3.
[39] Ibid.
[40] Ibid.
[41] Ibid, paragraph 60.
[42] Ibid.
The wife is currently employed. Health permitting, it is her intention to continue working until she is eligible for retirement.[43]
[43] Wife’s affidavit sworn and filed on 23 March 2015, paragraph 49.
The husband asserts in his affidavit evidence that he is unemployed and had difficulties in obtaining suitable employment.[44]
(c) Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
[44] See husband’s Financial Statement sworn 5 September 2013 and filed 6 September 2013, item 3 and Husband’s affidavit sworn 5 September 2013 and filed 6 September 2013, paragraphs 60-61.
This consideration is not specifically relevant to this dispute.
(d)Commitments of each of the parties that are necessary to enable the parties to support:
(i) himself or herself;
(ii) a child or another person that the party has a duty to maintain
The wife has two adult children from a previous relationship. As her sons are each now aged in their 30’s, she no longer has any duty to maintain them.
There is no evidence that the husband has any such commitments relevant to this consideration.
(e)The responsibilities of either party to support any other person
I refer to the above comments.
(f)The eligibility of either party for a pension, allowance or benefits…
The wife is not in receipt of Centrelink benefits and remains in full-time employment.
At the time he swore his Financial Statement, the husband was in receipt of Centrelink benefits being $253.00 per week.[45]
(g)Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable
[45] Husband’s Financial Statement sworn 5 September 2013 and filed 6 September 2013, item 12.
I am satisfied that the orders to be made in this matter will provide a reasonable standard of living for the parties having regard to their assets and liabilities and the circumstances existing at the present time.
(h)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
As neither party is seeking spousal maintenance this consideration is not relevant.
(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
I am satisfied that on the evidence presented, there are sufficient assets to satisfy the claims of all known creditors.
(j)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
This consideration is not specifically relevant to this dispute.
(k)Duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
As neither party is seeking spousal maintenance this consideration is not relevant.
(l)Need to protect a party who wishes to continue that party's role as a parent
This consideration is not specifically relevant to this dispute.
(m)If either party is cohabiting with another person – the financial circumstances relating to the cohabitation
As stated previously, I am not aware that either party has re-partnered.
(n)Terms of any order made or proposed to be made under section 79
As neither party is seeking spousal maintenance this consideration is not relevant.
(naa)Terms of any order or declaration made, or proposed to be made, under Part VIIIAB
This consideration is not relevant to the present dispute.
(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
This consideration is not relevant to the present dispute.
(o)Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
There are some additional facts or circumstances that are relevant.
Firstly, as stated, the husband argues that he made a ‘contribution’ to the raising of the wife’s children. While this contribution is acknowledged by the wife,[46] she asserts that the husband took on this obligation voluntarily and that “in the scheme of this relationship over that period of time, it’s not something which would make very much difference. It would just go in with the mix of all the other things”.[47]
[46] Transcript 21 April 2015, p.6.
[47] Ibid.
Secondly, the Court cannot ignore the evidence that the husband withdrew the sum of approximately $57,000.00 from his superannuation in July 2011. The Court is unable to determine what the husband has done with these monies.
Otherwise, there are no other factors which the justice of the case requires to be taken into account that have not been discussed previously in this decision.
(p)The terms of any financial agreement that is binding on the parties to the marriage
This consideration is not relevant to the present dispute.
(q)The terms of any Part VIIIAB financial agreement that is binding on a party to the marriage
This consideration is not relevant to the present dispute.
Further adjustment analysis
The wife does not seek any adjustment in her favour and argues against any adjustment being made in the husband’s favour. The husband, as stated, seeks an adjustment in his favour pursuant to s.75(2) and related factors.
I am not satisfied that there should be any adjustment in the husband’s favour because the husband had the benefit of his superannuation that he had not satisfactorily accounted for. Consequently, the Court agrees with the submissions made by the wife that there should not be any further adjustment pursuant to s.75(2) and related factors.
Conclusion
In this case, given the various findings made above in relation to contributions and the s.75(2) and related factors, and given the fact that the parties are no longer living in a marital relationship, I consider that it would be just and equitable to alter the parties’ interests in their property and liabilities.
I am satisfied that there should be orders to the effect of dividing the matrimonial property pool, in percentage terms, 65% to the wife and 35% to the husband.
This outcome will necessitate the first pool, (i.e. the net proceeds of the sale of the former matrimonial home less expenses and related loans) being divided 65% to the wife and 35% to the husband.
The final orders will need to be read in conjunction with the Orders made on 20 and 21 April 2015. In summary, the Orders made on 21 April 2015 provide for the wife to be appointed trustee for the sale of the former matrimonial home with the proceeds to pay the usual sale expenses, the mortgage of course and the (omitted) personal debt. In addition, the Orders made on 20 April 2015, with the consent of all parties, require the husband to pay his former lawyers, Santone Lawyers, the specific sums of $14,155.43 (plus interest)[48] and $1,000.00[49] from his share of the net proceeds of the sale.
[48] The outstanding legal costs claimed by the intervener against the husband.
[49] The agreed costs of enforcement to be paid by the husband to the intervener.
In addition, the second pool (i.e. the net property pool excluding the former matrimonial home) should be divided 65% to the wife and 35% to the husband. Given the determination that the value of this pool is $108,482.65, there should be an adjustment to the wife of $70,513.72. The relevant adjustment to the husband is $37,968.93. The relevant division of net assets may be summarised as follows:
Husband’s Net Asset Distribution Mitsubishi Lancer (insurance proceeds) $7,496.28 (omitted) bank account $371.98 (omitted) $2,488.86 Household contents & furniture $3,500.00 (omitted) Super $4,000.00 (omitted) Super $195.00 (omitted) Super $2,553.92 (omitted) Super $4,182.87 (Less) (omitted) Visa card ($16,199.22) Sub total $8,589.69 Payment from wife $29,379.24 Total net assets $37,968.93
Wife’s Net Asset Distribution (omitted) joint account $0.79 (omitted) account $1,691.94 Ford Festiva $1,850.00 (omitted) Super $134,265.82 (less) (omitted Mastercard ($13,777.23) (less) (omitted) Mastercard ($12,574.17) (less) (omitted) Mastercard ($11,564.19) Sub total $99,892.96 (Less) payment to husband $29,379.24 Total net assets $70,513.72
As such, the wife will be required to pay the husband $29,379.24 to achieve a division of 65%/35% in her favour for pool two. These monies can be paid by the wife from her share of the net proceeds of the sale of the former matrimonial home.
There will be a further order that the parties will retain all property including personal property, savings in bank accounts and such held in their sole names or in their respective possessions.
There will also be an order, pursuant to s.106A of the Act, to take effect in the event of default in signing any required documentation.
I note that the wife sought her legal costs be paid by the husband in her Initiating Application filed 12 July 2013. The husband did not seek such an order in his Response filed 6 September 2013. I note that reg.21.02 of the Federal Circuit Court Rules 2001 stipulates that this Court has the power to make an order for costs at any stage in a proceeding. That said, in family law matters, the Court also needs to consider s.117(1) of the Act, which states the principle that each party shall pay their own costs. The exception to that rule is contained in s.117(2), which relates to circumstances where the Court finds there is justification for departing from the principle. The exception is subject to the matters referred to in s.117(2A) of the Act.
That all said, I further note that in the interim orders made on 21 April 2015, an order was made that “the wife’s costs be reserved”. Regulation 21.04 of the Federal Circuit Court Rules 2001 states that “If the costs of a motion, application or other proceeding are reserved, the costs reserved follow the event unless the Court otherwise orders”. Consequently, I find it appropriate that the wife be given liberty to apply within 28 days of these orders to seek to have the matter relisted in relation to costs. If no such request is made within that period then the Court will assume that the wife does not seek press that issue.
For all these reasons the Orders of the Court will be set out at the commencement of these reasons for judgment. Given the factors to which I have referred, I state again that I am satisfied that the Orders are just and equitable.
I certify that the preceding one hundred and fifty-three (153) paragraphs are a true copy of the reasons for judgment of Judge Monahan
Associate:
Date: 17 September 2015
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Consent
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Constructive Trust
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Costs
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Remedies
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