MULHOLLAND & MULHOLLAND
[2017] FCCA 2979
•6 December 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MULHOLLAND & MULHOLLAND | [2017] FCCA 2979 |
| Catchwords: FAMILY LAW – Property – division of assets – wife suffered from meningococcal disease which has resulted in physical disabilities – adjustment for 75(2) factors. |
| Legislation: Family Law Act 1975, s.75(2) |
| Cases cited: Palmer & Palmer [2009] FMCAfam 987 Pierce v Pierce [1998] FamCA 74 |
| Applicant: | MR MULHOLLAND |
| Respondent: | MS MULHOLLAND |
| File Number: | SYC 7677 of 2014 |
| Judgment of: | Judge Henderson |
| Hearing dates: | 3 & 4 October 2017 |
| Date of Last Submission: | 4 October 2017 |
| Delivered at: | Sydney |
| Delivered on: | 6 December 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Christie |
| Solicitors for the Applicant: | Mills Oakley Lawyers |
| Counsel for the Respondent: | Mr Tockar |
| Solicitors for the Respondent: | Uther Webster & Evans |
THE COURT ORDERS BY CONSENT:
That the Husband attends the property at Property A (“the Property A property”) to collect some of his personal items as referred to in Annexure “A” between 10am and 2pm on 9 October 2017.
That the Property A property be listed for sale by auction (if recommended by the agreed agent) on the first Saturday in May 2018 or as agreed to in writing.
That if the agreed agent does not recommend auction then the Property A property is to be listed for sale by private treaty on or before 1 May 2018.
That the Husband removes the balance of items in Annexure A on a date nominated by him between exchange and settlement.
That the parties accept the recommendation of the Agent as to works and other actions necessary to prepare the property for sale up to a maximum of $10,000 and share equally in the costs of the works and action provided that if one party pays all or part of the other party’s share of those costs, then they be reimbursed from the proceeds of sale before any division of the net proceeds of sale thereafter, unless otherwise agreed.
That the Wife pay as and when they fall due:
(a)the mortgage on the Property A property;
(b)the portfolio loan on the Property A property;
(c)the rates for the Property A property;
(d)the building insurance for the Property A property.
until settlement of the sale of the Property A property.
THE COURT FURTHER ORDERS THAT:
The wife pay to the husband the sum of $703,115 by 1 April 2018 and simultaneously the husband to sign a transfer of his interest in the property to the wife and the wife discharge the current mortgage on the property.
In the event the wife does not pay the husband the sum specified in Order 7 herein by the due date, then the property is to be listed for sale as agreed and from the proceeds of sale after payment of agent’s commissions, discharge of the mortgage and usual conveyancing costs the wife is to to receive 60% of the net proceeds, less the sum of $50,900 and the husband the balance.
Otherwise, both parties retain all assets in their name including superannuation.
IT IS NOTED that publication of this judgment under the pseudonym Mulholland & Mulholland is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 7677 of 2014
| MR MULHOLLAND |
Applicant
And
| MS MULHOLLAND |
Respondent
REASONS FOR JUDGMENT
The matter of Mulholland is a property application heard for two days on 3 and 4 October 2017.
The applicant husband was represented by Ms Christie of counsel and Mr Tockar of Counsel represented the respondent wife.
The Evidence
For the husband:
a)Further amended initiating application filed 22 September 2017;
b)Affidavit of 22 September 2017 and financial statement of the same date.
For the wife:
a)The wife asked that I read well over 2,000 pages of material. The wife had exhibited 1625 pages of material to her affidavit which I did not read.
b)Ultimately the material I did read for the wife was limited.
c)I read her trial affidavit and financial statement filed 14 September 2017;
d)Response filed 27 February 2015;
e)An updating affidavit of 29 September 2017;
f)Affidavit of her treating specialist, Dr B, filed 29 September 2017;
g)Affidavit of Dr A, her psychologist filed 18 September 2017;
h)Two valuations of Mr D, one dated 15 September 2015 and his updated valuation of 31 August 2017;
i)Affidavits of Anthony Bellanto QC, Ms S and Mr B were not read;
j)Although the wife had managed to exhibit 1625 pages to her affidavit, she did not file her expert’s reports within the time frame ordered by the Court.
Husband’s exhibits:
a)Husband’s exhibit 1, a list of documents prepared by him of moneys expended by him post-separation in either support of the family or maintenance of the former matrimonial home;
b)Exhibit 2, legal fees paid to Newnhams Solicitors over time;
c)Exhibit 3, a schedule of the wife’s travel outside Australia for the period (omitted) 2011 to (omitted) 1991;
d)Exhibit 4, an email to the wife from the husband dated 9 October 2012. This is the date that the husband moved out of the former matrimonial home. He asserts separation occurred in September 2012. The wife says is occurred in April 2013. Nothing turns on this dispute;
e)Exhibit 5, a bundle of correspondence from the husband to the wife setting out payments made by him in respect of the former matrimonial home post-separation, reconciliations of those payments, and requests for the wife to provide to him a similar document setting out her payments;
f)Exhibit 6, letter to the wife dated 4 December 2014 asking the wife to allow him to install a kitchen in the former matrimonial home he had purchased; and
g)Exhibit 7, a bundle of letters from the husband;, emails from the husband to the wife, starting 27 February 2015 back to 1 December 2014, requesting her she advise him of money she had expended on the home etc.
Wife’s exhibits:
a)Exhibit 1, picture of the kitchen the husband had purchased in pieces;
b)Exhibit 2, a letter from the (country omitted) indicating the wife had received $19,776.30 lump sum payment being a backdated (nationality omitted) pension for the period July 2014 to August 2017, and advising of a monthly pension of (omitted)$473.80 each month thereafter; and
c)Exhibit 3, wife’s legal costs. The wife’s costs to date, unpaid, are $224,871.
The husband’s legal fees to Mills Oakley are $113,134. Those fees include the fees paid to Messrs Newnham’s in the sum of $43,547 and various counsels’ fees.
The wife’s legal fees are double that of the husband’s. The total legal fees of over $300,000 are a travesty for the parties. The quantum of fees is a concern for the Court when one has regard to the facts of this case. At any level this was a straight forward property matter which was well capable of settlement. There were no difficulties of valuations, company issues, trusts or tax issues. There were no parenting issues. This was case of assessing the parties’ contribution and then identifying needs under section 75(2)[1] and assessing whether to adjust the contribution based entitlement of the parties due to their particular needs into the future.
[1] Family Law Act 1975, s 75(2).
That legal fees in excess of $300,000 have been incurred in a matter where the only asset of real value is the home and the marriage is of some 27 years duration may bespeak of either poor legal advice or intransigence of parties or a combination of both and is most concerning. Parties are entitled to pursue their legal rights as they see them. However, that then compels the other party to respond. If the perceived legal right is misplaced unpalatable consequences may flow.
Ultimately, only the husband and wife were cross-examined. There was no complaint made or issue taken with the expert’s reports filed on behalf of the wife in relation to her significant physical impairments.
Each of the party’s counsel prepared a case outline document.
Parties’ positions
The husband asserts that the home be sold and the net proceeds equally divided between them and each keep what they have.
It is the wife’s case that she is entitled to 78% of the matrimonial property after a 27 year marriage and wishes to retain the former matrimonial home.
Or in reverse the husband is entitled to 22% of the matrimonial property after a marriage of 27 years.
The wife says her contribution-based entitlement for her past contributions is 60%. That she has also made superior post separation contribution and that this combined with her future needs results in a further adjustment to her of some 18%.
The pool is in excess of $2 million. The difference between what the wife contends after a marriage of 27 years that she receive and the husband receive is a difference of 56% around one million dollars in her favour.
The issues for determination
a)Ascertaining the value of the matrimonial pool for division;
b)Whether the wife is entitled to a greater contribution-based entitlement than the husband for her past contributions;
c)Secondly, has the wife has made a superior financial contribution to the parties’ assets post-separation;
d)Should the wife’s percentage entitlement be further adjusted upwards due to her needs in the future under section 75(2)[2].
[2] Above, note 1.
The wife’s case in a nutshell is she made a superior initial contribution to the acquisition of the matrimonial property due to a sale by her of a property she part owned with her mother in (omitted) in 1996. That this sale netted $55,000 and was the deposit for the purchase former matrimonial home in 1996.
That due to the husband’s work and lifestyle choices, she made the overwhelming contribution as parent and homemaker for the parties’ one daughter, Ms K, now aged 23 and living in (omitted). That this role was made all the harder due to some serious behavioural and mental health issues Ms K suffered from at least 2009 to 2012 and the wife’s significant physical impairment from the effects of meningococcal disease which she contracted in late 2006.
In addition that she worked for a number of years during the marriage and unlike the husband applied all her income to the assets and family.
My concern for the wife’s case and the position she took is that it is totally one sided. In focusing only on her needs and contributions she has significantly minimised the husband’s contributions to the current matrimonial assets and as parent and homemaker. This is how I must approach the matter, assesses both parties’ contributions and needs.
Relevant Short Historical Facts
The husband is 61; the wife is 59.
In 1980, the wife acquired a 50 per cent interest in her parents’ property at (omitted) by way of the virtue of her father’s death.
In 1985, the parties met in the (country omitted) and married in (omitted) 1985.
The parties lived in the (country omitted) from 1985 to 1992 where they both worked and in 1992, they came to Australia.
The wife commenced work as a (occupation omitted), part time, in 1993. The husband commenced working in the (employment omitted) industry.
The wife took about 19 months maternity leave when Ms K was born on (omitted) 1993 and resumed part-time work in (omitted) 1995.
In (omitted) 1996, the wife sold the (omitted) property to her mother and received $55,000. The wife asserts her mother also gifted to her $7000. The husband asserts the wife received $49,000 from the sale of (omitted) and $6,000 to $7,000 from her mother. That dispute is not a significant issue in a 27-year marriage.
Parties past contributions to their Assets
The wife asserts that at the time the parties bought their home the husband had only been working part time in Australia. However, from a reading of her extensive and very thorough affidavit, the husband was working full time between 1996 to 2001 as set out in paragraph 48 of her affidavit.
It is clear from 1996 the husband has always been in full-time employment until his retirement this year.
The wife made much of the money she earnt. That she earnt more money than the husband early on in their relationship; that he was only earning small amounts of money whilst they were in (country omitted) as set out in her affidavit. Her evidence is that whilst in (country omitted) and in 1986 she earnt $18,000 and continuing to 1992. Whereas she says in 1985 the husband was only earning $7000 and in 1986 and 1992, only $217.
The husband was cross-examined on this evidence and he agreed the income tax returns were correct. However, he was running his own (omitted) business and commencing to build connections and knowledge in the (omitted) industry.
He was employed by a (omitted) company called (employer omitted). His evidence was the company not only provided him with some small income but also provided the home they lived in, rent-free, including utilities and petrol thus the explanation for the low income. The wife would not concede this to be the case.
Sadly, the difficulty with the wife’s obsession in her material and oral examination of how much she earnt as opposed to the husband at this time was not counter-balanced with the husband’s superior income when she was at home caring for their child and when she was unwell in late 2006 until returning to work in (omitted) 2008 a period of some 18 months.
Additionally, she did not accept that redundancies the husband received in (omitted) 2001 of $12,000, (omitted) 2003 of $16,985, (omitted) 2004 of $4,508, sale of shares in (omitted) 2005 of $6,414 and redundancy of $87,129.24 in (omitted) 2012 were spent by the husband in support of the family and renovations to the home and that he spent this money as he wanted.
The wife’s own evidence supports the fact that over the marriage the husband’s income far exceeded hers. This is why property matters are not accounting exercises but an exercise is assessing all the contributions made in a marriage.
No challenge is made by the husband that the wife contributed equally with him to their marriage and assets.
It is clear to on the evidence that the parties engaged, as many married couples do, in joint ventures in their marriage, that is, on some occasions, the wife earnt more money and the husband took over parenting and homemaking. They each contributed the best of their ability where they could. The wife does not accept this to be the case.
When the parties purchased the former matrimonial home at Property A they had to renovate the premises. The property was at purchase divided into three one-bedroom flats.
The husband turned the property into one in which they could live as a family. I accept the renovations have not been completed and likely never will be. The husband’s exhibits many e-mails imploring the wife to let him enter the home post separation and finish the renovations or to obtain quotations from builders to do so are inconsistent with her version of events of a husband who abandoned she and their daughter at separation.
At times the wife’s parenting and homemaking contribution vastly outweighed the husband’s. At times the husband’s income vastly outweighed hers. At time the husband’s parenting and homemaking vastly outweighed hers particularly when she became so ill in late 2007. I am describing a real marriage, the ups and downs, swings and roundabouts. The wife’s obsession with pointing out every failure of the husband’s did her no credit as the husband did not take this approach at all.
The husband conceded in cross-examination that the (omitted) money gave them the deposit needed to purchase the former matrimonial home. They purchased the property for $225,000 and borrowed $180,000. The remainder paid for stamp duty and costs.
The wife increased her work hours in 2007 to 33 hours a week. From 1997 she had been working about 16 hours a week.
The wife asserted she did not know what the husband did with his money in 2003 and 2004. It is clear from his evidence that it was used to support the family for her income would have been insufficient. The husband received redundancy payments in 2003 and 2004 and placed that money into an overdraft offset line of credit facility. It is clear that when working, each put their pay into the line of credit facility and used the moneys in that account to fund necessary expenses for themselves. That arrangement ceased in May 2012.
The parties separated for about a year from June 2006 to June 2007 when the husband left the home.
There is no issue here of gambling, excessive alcohol use or wasting of money per se.
It is clear that the husband’s business in Australia was as a (occupation omitted) and he travelled for his work. There were times when he was away for two, perhaps three, weeks at a time, leaving the wife at home with the child. Thus the wife may well have made a superior contribution to parenting and homemaking over the years as did he as income earner.
The wife takes this further. The wife asserts that he was an uninvolved parent as she said the same in the witness box. At paragraph 80 she said:
Mr Mulholland was uninvolved in Ms K’s care from the time of her birth.
That is simply inconsistent with the evidence before me. The wife would not admit that the husband went to the child’s school, took her to and from school: “He was an uninterested parent.” Paragraph 83:
Between the early 2000s and 2007, I continued to cater for the majority of Ms K’s needs without assistance from him.
That evidence is contrary to the husband’s evidence. It is clear on the husband’s evidence, which I accept, that when he was at home, the husband was involved with his daughter and did care for her when he was able given his role in renovating the home, a home in much need of renovation. His statements of taking her to school, attending school events, homework and other activities have the ring of truth.
The wife would not concede the quantity and extent of renovation work the husband did, that he converted what was a property of three flats into a property that his family could live in. I accept the home does not have a fully functioning kitchen in which the wife could have a dishwasher installed and have proper mobility for her wheelchair. Her evidence at paragraph 72 is:
The father was working part time between 1996 and 2000 and was able to undertake work on the former matrimonial home.
The wife agrees he replaced walls and floorboards, built in wardrobes, constructed a side fence, demolished an old kitchen and the wife says:
Constructed an incomplete makeshift kitchen in 1997.
Installed a fireplace, relined walls and ceilings, painting, constructed a two-car garage and carport.
The husband asserts he did many, many more tasks than this. He says given he was a (occupation omitted) by trade, he replaced rotting framing and floorboards, installed new exterior sidings, gyprock lining, pine ceiling panels, new rear windows, replaced a rotted rear awning attached to a granny flat, removed rubbish from the property, installed guttering, rebuilt a part of the house that had been infested with white ants, replaced new weatherboards, soundproofed the walls, rebuilt what was called the “attached corner shop” and he says converted into an attached granny flat.
The wife would not concede there is a granny flat as part of the property. This area contains the only kitchen which both agree is unsuitable. That he relined all the rooms with plasterboard, added a three-car garage, put in granite drive, laid a brick patio, installed a new hot-water system, dug a new sewage line, added new circuit board, landscaped and repaired the gardens and designed a new kitchen which he bought but was refused to install by the wife.
The husband says the home requires the master bedroom and bathroom be completed and requires some painting. The new kitchen he purchased needs to be installed and countertops, pluming, fixtures, stove, dishwasher and trim added.
The wife has refused him access to the home since December 2014.
The wife complains that the husband bought three or four boats during the marriage. He has one presently. Boats have been bought and sold during the marriage. In cross examination she agreed that prior to her illness she, the husband and Ms K would spend weekends on the boat on the (omitted) for example.
The wife complains that the husband took many holidays and trips overseas without her or their daughter. That he went on fishing trips overseas leaving her and the child at home. The wife prepared 2 schedules. One schedule was trips/holidays she asserted he took without her and Ms K and another schedule was for times he was overseas. Cross examination revealed the falsity of her complaints and poor recollection of past events. The wife’s evidence on this issue and many others was unsafe.
At paragraph 151:
To the best of my recollection there were no less than 31 occasions during the marriage where Mr Mulholland on holidays without Ms K or me. -
The facts revealed under cross examination were that she and Ms K took 5 of these trips with the husband, that they were business trips in the main and that some of the places she asserted the husband went to he had never been. For example, the husband has never been to (countries omitted). He had not been to the (countries omitted) in (omitted) 2012 as was asserted.
The wife asserts, in paragraph 173 of her affidavit that since separation he has been on no less than 25 holidays.
The trips to (country omitted) in (omitted) 2013 to (omitted) 2013 were to see his mother who had a brain tumour. He went to (country omitted) to support her and he travelled back and forth and, of course, saw friends and others when in the (country omitted) and also undertook some business trips. The wife said, in her oral evidence, that he did not see his mother because she saw on Facebook that he wrote:
I am having difficulty spending time with my mother.
The wife said that meant he did not want to see his mother. I asked her whether she could think kindly of the husband and perhaps he was struggling to spend time with his mother who had undergone brain surgery and chemotherapy.
The wife made a concession that this was possible.
The husband was not in (country omitted) in 2015 as the wife asserts. Not in (country omitted) in (omitted) 2016. Not in (omitted) in (omitted) 2015. This was a trip that the husband purchased for his daughter and her boyfriend, not himself.
He was in Queensland in 2017 but not on a holiday. He was staying with a friend before he determined to leave Australia and live in (country omitted) which he did in (omitted) 2017 to care for his unwell stepfather.
The wife alleged he was in (country omitted) in (omitted) 2016. She conceded this was only a stopover.
The husband has never been to (country omitted). (country omitted) was not a trip he took, but a trip his daughter took to visit her mother in (omitted) and for which he used frequent flyer points to pay for.
The majority of these trips were business trips. The husband conceded he had had fishing holidays and would tag along on a fishing trip after a business trip on many occasions.
The wife’s evidence at paragraphs 151 and 173 was mischievous, misleading and disingenuous and has resulted in me accepting the husband’s evidence whenever there is a contest and rejecting hers.
The wife’s case that the husband enjoyed himself on holidays, spent all his money his own pursuits, left her to care for the child alone and that he was careless of her when she was so ill and simply took off on fishing trips is not made out.
A life-changing event occurs for these people in late 2007. They are doing well. The wife is working almost full time and the husband full time. Even on the wife’s evidence he was earning a reasonable income. In 2001, his income was $31,000 per annum – the wife’s income was $31,000 per annum. By 2008, his income was $84,000 per annum and the wife’s was $37,000. After 2008 his income approached in excess of $100,000.
The wife contracted meningococcal disease and that has had dire and tragic consequences for her. The wife has had seven fingers amputated, a partial amputation of other fingers, partial amputation of toes on her right foot and all the toes on her left foot. The wife nearly died and was seriously ill for many months.
When she became so unwell in (omitted) 2007 and nearly died, the husband took six months off work to care for her and the child. Her mother was there for three of those months. After the wife’s mother returned to her home it was the husband who cared for she and his daughter full time. He managed to obtain full time employment after those 6 months and continued to financially support his family.
The wife had hyperbaric oxygen therapy for five weeks in 2008. She admitted the husband took her there every day but would not admit that he collected her from that process and she was required to make her own way home. I find favour with his evidence and not hers.
The wife criticises the husband for taking a four-day fishing trip in mid-2008 in Queensland after resuming work and leaving her at home. He agrees he did this after the conference he attended as part of his return to work. This is not the conduct of a dis-interested husband or father.
In 2008, after this life-threatening illness of her mother, Ms K’s behaviour began to deteriorate. She begins taking drugs, became bulimic and anorexic. She is truanting from school and from 2009 to 2012 the parties’ life became very difficult with not only the wife’s severe and very concerning physical disability but also their daughter’s behaviour. The wife would have the Court believe that the husband was careless, not interested and left her to deal with this on her own. That is clearly not the case.
The evidence is that the husband, wife and child were all involved in family therapy between 2009 and 2012. The husband took the wife and the child to family therapy and this continued post-separation when, in the letter, he wrote to his wife on (omitted) 2012:
(omitted) 2012. I am going to stay with Mr M for a few days. Will pick up you on Thursday for our meeting with Ms B.
Ms B was the psychologist that the parties were attending to assist not only themselves but their daughter, Ms K to recover and, by all accounts, she has. He then says in the letter:
This weekend I intend to work on the house. I would like you to organise a shopping list so I can take you to the mall and buy the things you need. We will also do some cooking for meals that will last you through the week ….. for example lamb stew.
The wife would not concede that this letter indicated a husband, although separating from his wife, was still interested in her care and welfare and wanting to assist his family. When asked how she could say he did not want to assist, her answer was, “I did not want him to cook me food. I do not like his cooking.”
The wife said she did not know if he was separating from her because he wanted to take her to brunch; something they had never done. He wanted to spend quality time together; something they had never done. However, this evidence and other emails from the husband post-separation indicate a husband most concerned about not only his wife’s welfare but his daughter’s welfare.
There are many emails from the husband to the wife post-separation about the child, who was, at that stage, an adult. Discussing the matter of Ms K’s 21st birthday in a letter of (omitted) 2014. The husband asking for photographs to make a pictorial history for Ms K on her 21st birthday. Worrying about trees pushing the antenna over, speaking of urgent repairs that need to be done. The wife did not respond to any of these e-mails.
It is simply not the case that this man abandoned this wife who was suffering and will continue to suffer from significant physical and, unfortunately, deteriorating neurological issues. On many issues the wife was not a correct historian. Her overwhelming need to retain the home she has lived in for 17 years, at times, clouded her recollection of events. Ultimately, the finding I have come to is that where there is a contest, I prefer the husband’s evidence to the wife’s evidence.
Post-separation and for some 15 months thereafter, the agreement was that they would pay expenses for the home in a two-thirds/one-third basis. The husband provided at least three reconciliations to the wife of expenses he paid asking the wife to contribute one-third. The wife responded on three occasions and then, in January 2014, for reasons best known to her, determined she would no longer do that. Her oral evidence was that she had observed her husband had many tools therefore had spent a lot on money on tools and many of the invoices he asked her to contribute to were invoices from Bunnings. Bunnings is where you buy tools and she was not going to help buy him tools.
The wife said she did not trust what he was saying, did not know what many of the expenses he claimed related to and so she would no longer contribute one-third to the expenses and ceased that arrangement. This was an arrangement which had been working quite well.
Even after this the husband again sought to enter the home and install the kitchen. The wife refused saying in cross examination that this was because he was harassing her, bombarding her with emails and telephone calls wanting to control her, she did not understand what he wanted to do. His emails are clear to me. He wanted to finish the renovations to the home and particular install a fully functioning kitchen for her use including a dishwasher.
The husband was made redundant from (employer omitted) in (omitted) 2015. He received a payout of $59,758. The wife alleges none of this money was used for the benefit of the family.
The wife could not be kind to the husband at any level when the reality is that during the marriage they had both contributed to all aspects of their married life to the best of their ability financially and non-financially. That post separation the wife remained in the home to the exclusion of the husband and yet he still contributed to the outgoings of the home and care of their daughter who was by that time an adult for some 15 months.
So strong is her desire to retain the home, the wife has convinced herself of a fiction. I find that the facts of this marriage are inconsistent with her version and recreation of history.
The wife has been unfair in her many and numerous criticisms of the husband. It is difficult to read the wife’s affidavit at times. For example the wife criticises the husband’s failure to work full time or earn sufficient income early in the marriage, then when he returns to work full time after her illness, says he left her at home to suffer the effects of her illness alone.
That is simply not the case. The husband returned to work after his wife had recovered to a reasonable level from the effects of her illness as the family needed financial support. The wife herself returned to part time work in (omitted) 2008 some six months after the contracting of this disease.
The wife made much of the poor kitchen, lack of dishwasher and that despite her significant difficulties in using her hands her husband was careless of this and she was required to wash up. On her own evidence under cross-examination, she agreed that the attachment kitchen she uses was too small to fit a dishwasher. Yet after separation and again in December 2014, the wife would not agree to the husband installing a kitchen in the property.
In cross-examination on her refusal of a new kitchen with a dishwasher, she said that that the husband did not want to install the kitchen for her benefit or to assist her because it was not the right sort of kitchen for her in bench height and the like. He only wanted a new kitchen to maximise the sale price of the house. It is now approaching 4 years since that offer was first made and still the wife uses an inappropriate room as a kitchen and continues to wash up despite the difficulties this causes her. I do not know what to make of the wife’s position other than she will do everything possible to minimise the sale price of the house and maximise what she sees as her right to keep the home.
Unlike the wife, the husband made many concessions in the witness box. As just one example he conceded he was still able to work and would work if he could, but at this stage he was caring for his stepfather. That he is in good health is fit and able to work. If he does return to work he has 4 years until he is aged 65 so there is at least four years of work capacity for me to have regard to.
I accept the wife has no earning capacity at all.
The wife believes the husband was in a de facto relationship with Ms P, it is clear he is not. Ms P lives in Queensland and he lives in (country omitted). I accept his evidence that he has not entered into a de facto relationship since separation but has had female friendships.
In the case outline provided by Mr Tockar and on the wife’s instructions he asserts:
That the wife’s contributions both financial, direct, indirect and as parent and homemaker significantly outweighed the husband’s and she is entitled on a past contribution-based entitlement including post-separation to 60 per cent and him 40 per cent.
These superior contributions are:
$55,000 and $7000 or $49,000 and $6000 that came to the parties from the sale of her property in (omitted). $55,000 was the deposit for the house and the remainder, if any spent on stamp duty, etc.
The home is now the major asset of the parties worth 1.9 million.
That this contribution from the (omitted) property was pivotal or a launch pad for the parties to buy the matrimonial home and without it, they may never have done so, consistent with the principles of Pierce & Pierce[3].
[3] Pierce v Pierce [1998] FamCA 74.
Ms K’s difficult behaviours exhibited from 2009 to 2012 made the wife’s parenting and home-making role more arduous, combined with her own significant disability from the meningococcal disease.
Although the husband’s income from 1995 improved, he spent the majority of his income on his own activities, travel, boating and other leisure activities, tools and equipment that he will retain.
That the wife also made a significant financial contribution from her work at times up to 33 hours a week and spent all her income on the home or family.
That these contributions combined so outweigh or are so superior to the husband’s that this entitles her to a 60% entitlement in her favour.
A most curious contribution by the wife was asserted. The husband wanted to sell the home in 2015 when it was valued at $1.2 and the wife resisted. It is now worth is now $ 1.9 and the wife eludes that as she fought hard to keep the home that this is in some way a contribution.
In answer to that. Firstly the husband is, as is the wife, perfectly entitled to seek that their capital be released from a property post separation. Secondly, had there been no delays in this Court the matter may have been heard to finality in 2015 and not 2017. These matters have nothing to do with contributions by the wife they are exigencies or vicissitudes of life not matters of contribution.
I accept that in relation to the (omitted) property, the wife has made at first blush a superior contribution to the current home. However, during its ownership by the wife and the husband, they paid rates, mortgages and taxes on the property from their combined incomes. Thus the husband has made a contribution to the end value although a lesser one to that of the wife. I accept the $7,000 or $6,000 from her mother was a gift and that that is her contribution.
The husband’s contribution as parent and homemaker rose to extraordinary heights for the six months he took off work to care for the wife and child and for a further 12 months thereafter, having regard to his wife’s disability and his daughter’s concerning behaviour. His contribution at that time outweighed and may have been superior to the wife’s as a parent and homemaker and income earner until she became well enough to resume her work and the level of homemaking activities that she had previously engaged in.
Even with the gift of $7,000 from her mother and sale of her interest in the (omitted) property, over this long marriage I can find nothing other than the husband and wife each contributed all their income to the conservation, preservation and maintenance of their property. The husband contributed his labour, energy and effort in converting the home to a property that the parties could live in with their child from three separate one-bedroom flats to one accommodation still incomplete. The wife took over the lion’s share of parenting due to the husband’s work on the home and travel for work as a (occupation omitted). I do not accept the wife’s assertions that the husband used his income for his own benefit it is simply an incorrect belief.
I find these parties’ contribution-based entitlement to be equal over their 27-year marriage despite the initial superior contribution of the wife to the deposit for the property. I do not accept that without that money these parties would never have purchased a home. They were frugal and careful with their money and today have a mortgage less than $80,000 having borrowed $186,000 and spent considerable funds in renovation and been without any income for 6 months whilst the wife was so unwell from 2007to June 2008.
The contribution each has now made over their 27 year marriage is equal.
However, I must deal with the matter of Palmer & Palmer[4] a decision of my brother Judge Howard referred to me by Mr Tockar. In that matter the parties were married for 37 years. At the time of trial the wife had suffered a stroke and the husband was impecunious. His Honour gave the husband 30% of the matrimonial pool for the following reasons.
[4] Palmer & Palmer [2009] FMCAfam 987.
He assessed the wife’s entitlement to the parties’ assets in the past was 55%. The wife had paid some joint debts of joint businesses from the sale of inherited properties, inherited many years prior to the debts being paid out. His Honour found that the businesses were a joint endeavour.
That the wife inherited a large sum of money – 15,000 pounds – in the early sixties which may or may not have been a large sum of money as there was no evidence to support this finding. It is a significant sum of money, however.
That the wife has made a superior contribution to both the assets and as parent and homemaker to that of the husband. The wife worked outside the home the husband ran the businesses. Both parties made their incomes available for the benefit of the family. Both parties were doing their best to assist their family and made contributions.
His Honour found that the 15,000-pound contribution in the early sixties entitled the wife to an additional 10% by way of financial contribution.
Secondly, post-separation, the parties were separated for 12 years and the wife made the loan repayments. However, the wife was living in the former matrimonial home and had use of the resources of the parties, and that matter was not referred to by his Honour at all. He then further found she was entitled to 10% post-separation contributions of 12 years.
In relation to 75(2)[5] factors – the wife was in a coma, having suffered a stroke, a most tragic circumstance. The husband was as well as a man of his age could be and was living an independent life. Yet his Honour gave the wife an additional 5% for 75(2) factors when the reality is there was no evidence as to her life expectancy or superior need over his. Given the modest sum the husband was receiving the 75(2) factors may have weighed in his favour.
[5] Above, note 1.
I am not bound by this decision. Given the significant gaps in the evidence to support the findings made this decision is unreliable and I will not follow it.
These parties have made equal contributions in the past to their current asset base.
What is the matrimonial pool for division?
Item Value Assets Property A property $1,900,000 Husband's (vehicle omitted) $10,600 Husband's (omitted) boat $9,010 Wife’s contents $6,000 Husband tools and equipment $18,000 Wife's (omitted) Bank account $23,370 Husband's (omitted) Bank account $40,810 Wife's (country omitted) Bank Account $44,900 Total $2,052,341 Superannuation Husband's (omitted) Super $194,289 Wife's (omitted) Super $87,694 Debts Mortgage on Property A property $75,482 Total $75,482
The wife has a (country omitted) Bank Account in (country omitted) she asserts worth some of $44,900. The husband contends it is worth $69,490. The wife’s figure includes the tax she will pay if she realise this investment and that is the figure I will accept. The wife is concerned this account may affect her entitlements in Australia and wants the husband to have the account. He does not seek that order. The account is in her name and that is how it will remain.
ADDBACKS
$20,000 of the $23,370 in the wife’s (omitted) bank account has come from a lump sum payment of a pension to which she was entitled for having worked in (country omitted) and some savings. There is no doubt the husband contributed to that lump sum as they were living together at the time it was accrued.
The husband withdrew $62,500 from his (omitted) superannuation in (omitted) 2017 when he determined he would retire to care for his stepfather. The wife seeks that sum be added back to the pool.
The $40,810 in the husband’s (omitted) Bank account is what is left of that drawdown of $62,540 from his (omitted) Super.
The husband has spent $22,000 of this joint money post separation on a combination of legal fees and living expenses and it is impossible to break this up any further. The wife has received just under $20,000 from her entitlement to a (nationality omitted) pension and savings. The pension amount is also joint money.
I propose to leave the wife with the money in her bank account and the husband with what he has spent of his superannuation money. This will result in each having received for their exclusive use a similar amount of matrimonial funds.
I will leave the balance of the husband’s (omitted) Bank money in the pool for division as they are joint funds.
In relation to the (employer omitted) redundancy of $59,798 received by the husband 3 years post separation. The wife seeks an add back of $50,703 paid by the husband for legal fees post separation
No doubt some of these fees were paid from that redundancy as well income as some of his legal fees were paid off in small amounts. It is impossible to now break that up. Perhaps none of that money was used towards maintenance of the home. However, the money was received 3 years post separation and the husband has been required to pay rent and store his equipment. Attached to his affidavit is a schedule of the substantial costs he has incurred in renting privately and storing his furniture which amounted to almost $100,000 post-separation. The payment on the mortgage on the matrimonial home of which the wife had exclusive occupation was less than the rent the husband was paying.
I will have regard to the fact that the husband had exclusive use of this sum and the wife sole occupation of the home in my deliberations and not add it or legal fees paid back to the pool.
In light of these facts, I do not propose to add this money back to the pool. The creation of a matrimonial pool for division is artificial enough without adding to it monies for division that have already been expended when such payments may be had regard to under section 75(2) of the Act[6]. Otherwise I make no further adjustment for add backs.
[6] Above, note 1.
Debts
There are only two matrimonial loans being the mortgages on the home totalling $75,482. All other loans in the parties’ names such as credit cards, loans to family and the like are their debts and not matrimonial debts. This is net liquid assets of $1,953,838.
I cannot allow any possible Centrelink overpayment made to the wife to be had regard to due to her receipt of the lump sum pension payment from (country omitted) as I do not know what that is to be.
Any overpayment will be a small sum. Remarkably the wife only ceased working in December 2016 and has only received a disability pension from about that date.
The lump sum (nationality omitted) pension has been paid for the period July 2014 to August 2017. The conversion of that now weekly pension to Australian dollars was at the date of the hearing $604 per month. The wife is able to earn some money whilst in receipt of a disability pension and I accept the submission of Ms Christie that any overpayment is likely to be of small compass. However, it is a relevant factor in the exercise of my discretion
The assets available for distribution are:
Item Value Assets Property A property $1,900,000 Husband's (vehicle omitted) $10,600 Husband's (omitted) boat $9,010 Wife’s contents $6,000 Husband tools and equipment $18,000 Husband's (omitted) Bank account $40,810 Wife's (country omitted) Bank account $44,900 Total $2,029,320 Debts
Net available
$75,482
$1,953,838
Net liquid assets for division are $1,953,838.
The husband has $194,289 and the wife $87,695 in superannuation. Neither party seeks a super splitting order.
I do not propose to make a super splitting order in this matter and will have regard to the difference in each parties superannuation account in the exercise of my discretion.
I have assessed the contribution-based entitlement of the parties for their past contributions to be equal.
Post-separation I do not see that their contribution based entitlement as anything other than equal:
The wife asserts that there was difference in parenting contribution post separation.
At separation their daughter was virtually 18 and I do not see the fact their daughter remained living with her mother in the home for some time as an adult takes the wife’s parenting contribution to a level that outweighs the husband’s parenting contribution.
The wife remained in the home to the exclusion of the husband for 5 years and his payment of rent and storage far exceeded any interest only mortgage payments the wife made.
In addition the husband paid two thirds of the outgoings on the home post separation. The husband received a redundancy of some $59,000 3 years post separation and the wife remained in occupation of the home for 5 years. The husband continued to pay two thirds of the outgoings on the home for 15 months post separation. These factors do not cause me to vary my determination of an equal contribution post separation.
I find on these facts there is no difference in the contribution based entitlement of each post separation
Into the future and the 75(2) factors
The husband is well. He has 4 years until he is 65. He may work past 65. He conceded he still had a capacity for work, and that he may well return to work in this time and that if he worked for about 18 months in (country omitted) this would benefit his (nationality omitted) pension.
The wife is not well and has significant physical disabilities and an eventual neurological decline as well in her day to day functioning due to the effects of contracting meningococcal disease. The impact of the meningococcal disease has resulted in the following;
The wife has no ball on her right foot, no padding on the ball of the left foot with continuing a necrotic flesh and the obvious requirement for specialled footwear and orthotics which must be renewed every 12 months.
One of her amputation wounds has not healed and she must change the silicon dressing every three days.
The wife has difficulties with mobility, eating, bathing and showering on her own. These tasks take time. She is required to use public transport and cannot drive a car, she must catch taxis even for short distances and has difficulties travelling on public transport.
She has only has three complete fingers. Preparing meals is difficult, as is washing up. She has to concentrate to avoid dropping things. She has to be careful when bathing herself.
She uses her wheelchair all the time, walks with a stick for short distances, has numbness in the top part of her right foot, a strong burning sensation in her feet at night, sensitivity to sounds, suffers from hypertension, short-term memory loss, difficulties with facial memory.
The wife is a very slim woman and has no stamina or strength. The wife attends a physio and psychologist and a Pilates classes. The wife is now part of the National Disability Support System.
The wife’s entitlement and support under the National Disability Support scheme are impressive.
The wife is provided with a new wheelchair when required. The scheme will fund renovations and extensions to her home. The wife manages her entitlement to funds under the Scheme which total $53,872 as lump sum for renovations and the like. The wife’s plan/budget is set out at Exhibit 32 to her affidavit.
Her plan/ budget provides yearly for the following;
$1,775 for individual assessments and therapeutic interventions.
$2,472 for transport.
$31,144 for supervision of her daily needs, maintaining home environment, house cleaning, gardening, meal preparation, delivery of meals, domestic chores, assistance to support her to attend or participate in community and social activities which includes $8,500 for assistive technology etc.
The total approved funds for the wife to date are $53,872. The wife will still have out of pocket expenses and those costs were set out very clearly in the most helpful report by her physician Dr S.
If she requires an amputation of a foot, a prosthetic will be some $10,000 and the cost of the operation and physiotherapies some $21,000. Dr B says such an operation may be required in 10 years.
These costs are absent from any rebate from Medicare or the wife’s private health insurer. Perhaps some of these costs will be met or covered by the National Disability Scheme.
Looking at paragraph 227 of the wife’s affidavit, she sets out what she has paid in medical costs from January 2013 to date, and they total $14,006.05.
Of that amount, she has received rebates totalling some $8000, leaving about $6000 she has been out of pocket for the period from January 2013 to the date of swearing the affidavit, 13 September 2017 some four years. Those costs amount to about $1500 per year.
I have no doubt the wife does and will have needs that she cannot meet from her own income. However, they are modest given her entitlement under the National Disability Scheme. Her disabilities, although tragic, may not result in her inability to meet her needs being much greater than the husband’s inability when he reaches a retirement age in perhaps 4 years or longer.
Her (country omitted) pension will result in her losing only 50 cents in the dollar when she reaches the threshold of allowable additional income. Thus her financial position will be superior to that which it has been. I accept she may a have small debt to repay Centrelink as a result of this pension.
This is not a compensation matter. Although the wife’s disabilities are a tragedy, it is the financial impact of those disabilities on her capacity to provide for herself that I must assess, not give her an allowance for having suffered so egregiously from this disease.
I assess the wife’s inability to provide for her future needs from her own resources to be less than the husband who has a capacity for work and a superior amount in superannuation. Taking into account those matters I will adjust the matrimonial pool by 10% for those needs. This results in a 60/40 division of the property in favour of the wife.
The result will be that the wife will receive 20% more of the assets than the husband a figure approaching $400,000 on the combined liquid assets
What is the result of this decision for the parties
The net available liquid assets are $1,953,838. A payment to the husband of 40% is $781,535 less the assets in his name which total $78,420. The wife will be required to pay him the sum of $703,115 if she wishes to retain the former matrimonial home. He would also have his superannuation of $194, 000 which he can access immediately.
The wife would have assets then of $1,172,303 and her superannuation of $84,000 which she can access immediately.
There is nothing in the Family Law Act 1975 that says the Court must ensure that one party must live in the matrimonial home. If at all possible, the Court will make orders to facilitate this occurring but it must be feasible, just and equitable and not at the expense of the other party.
My task is to make an order that is in all the circumstances just and equitable, having regard to the parties’ contribution-based entitlements in the past and their needs into the future. I have assessed the wife’s future needs to be 10% per cent greater than the husband’s. That is an allowance approaching $200,000 to the wife in liquid assets for her 75(2)[7] factors over and above the husband resulting in a figure approaching $400,000 or so difference in the monies and assets each will receive excluding superannuation.
[7] Above, note 1.
Are these orders just and equitable in all the circumstances?
I find these orders are just and equitable in the circumstances. They take account of all of the parties’ contributions to their assets over their long marriage, including post separation, their capacity to provide for themselves into the future and take account of the difference in superannuation each will retain and I will so order.
My real concern for the wife is this: Her own evidence indicates that the home she has been living in for 17 years is totally unsuitable for her needs.
The wife does not have an appropriate kitchen with low bench tops, a dishwasher, appropriate cooking facilities, a suitable bath room for a wheelchair. The wife has a garden to maintain and the home is in need of substantial renovation and repair.
Even if the wife did not have to pay the husband any money and retained the home, the cost to bring the home up to a level that suits her needs and then maintain the home may result in her being unable to hold onto it.
Her overwhelming desire to retain this property has caused her to investigate at most concerning ways to keep it. The wife looked at obtaining a reverse mortgage to pay out the husband, her legal fees and to modify the home which she assesses will cost some $100,000. The total she amount she looked at borrowing was $650,000. This was all predicated on my agreeing with her that her husband was entitled to a mere 18% of the value of the home and in total around 22% of the matrimonial assets.
Even if I had agreed with her position, I am concerned that her own case and evidence produced is inconsistent with the outcome she seeks to achieve. The outcome she seeks to achieve may not be in her best interests at the end of the day.
The wife does require an appropriate home with appropriate bathroom, kitchen facilities, ramps, easy access, little to worry about, secure and safe. The wife says she has an overwhelming psychological/emotional need which impacts upon her health to remain in the Property A area. That may be the case, however her need does not outweigh the entitlement the husband has to a proper distribution of matrimonial assets acquired over a lengthy marriage of 27 years.
In any event, the wife receiving 60% of the assets does not mean she cannot live in the Property A area. The wife has not explored the possibilities that abound for a cashed up single woman with perhaps 1 million in cash, after paying her extraordinary legal fees of $224,000, has in obtaining suitable accommodation.
The husband agreed to give the wife time to pay him out if she so chooses, otherwise, the home is to be sold. I asked the parties to agree upon a timetable for sale of the home as I accept the wife’s difficulties in physically and emotionally removing herself from the property and in having the property on the market ready for sale.
The parties have agreed as follows: that the husband will attend the property at Property A to collect his items between 10 and 2 pm on 9 October 2017 and I make orders that the husband is entitled to collect the items set out in annexure A to his amended application.
Secondly, the Property A property is to be listed for sale by auction if recommended by the listing agent on the first Saturday in May 2018 or as agreed in writing. This gives the wife some six months to pay out the husband and/or organise herself to move from the property. This is not the conduct of a careless husband.
If the agreed agent does not recommend an auction, the property is to be listed for sale by private treaty on or before 1 May 2018.
That that the husband will remove the balance of his items in annexure A on a date nominated by him between exchange and settlement, but no less than seven days prior to settlement.
The parties accept the recommendations of the agent as to the works or other actions necessary to repair the property for sale up to a maximum of $10,000 and shall equally bear the costs of the works and actions, provided that if one party pays all or part of the costs, the other party will reimburse their share of the costs from their entitlement to the proceeds of sale.
The wife will pay, as and when they fall due, the mortgage on the Property A property, the portfolio loan on the Property A property and the rates and insurance for the property pending settlement or sale.
I will order that that from the net proceeds of sale after payment of sale costs, discharge of the current mortgage over the property, the wife is to receive 60% of the net proceeds of sale less the amount of $50,900, which is $44,900 for the (country omitted) Bank account and $6,000 for her furniture, and the husband the balance.
I certify that the preceding one hundred and ninety one (191) paragraphs are a true copy of the reasons for judgment of Judge Henderson
Date: 6 December 2017
Key Legal Topics
Areas of Law
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Civil Procedure
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Equity & Trusts
Legal Concepts
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Abuse of Process
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Estoppel
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Res Judicata
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Standing
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