Munston & Munston
[2022] FedCFamC2F 966
Federal Circuit AND FAMILY Court of Australia
(Division 2)
Munston & Munston [2022] FedCFamC2F 966
File number: MLC 6988 of 2019 Judgment of: JUDGE RILEY Date of judgment: 22 July 2022 Catchwords: FAMILY LAW – Property settlement – marital relationship – wife not attending hearing – child of relationship in care of husband. Legislation: Family Law Act 1975, ss. 75(2), 79(2), 79(4), 90XT(1)(a), 90XT(4). Cases cited: Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52 Number of paragraphs: 67 Date of last submission/s: 22 June 2022 Date of hearing: 25 May 2022 Place: Melbourne Counsel for the Applicant: Mr Kiernan Solicitor for the Applicant: MMH Lawyers Counsel for the Respondent: No appearance ORDERS
MLC 6988 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MUNSTON
ApplicantAND: MS MUNSTON
Respondent
order made by:
JUDGE RILEY
DATE OF ORDER:
22 July 2022
THE COURT ORDERS THAT:
1.The applicant pay to the respondent the sum of $60,715 (“the payment”) within 60 days.
2.Contemporaneously with the payment:
(a)the respondent do all such acts and things and sign all such documents as may be required to transfer to the applicant, at the expense of the applicant, all of her right, title and interest in the real property situate at and known as B Street, Town C in the State of Victoria (“the property”); and
(b)the applicant indemnify the respondent against all apportionable rates, taxes and outgoings of or with respect to the property of whatsoever nature and kind.
3.If the applicant fails or refuses to make the payment to the respondent within 60 days then the parties do all acts and things and sign all such documents as may be necessary to sell the property and for this purpose:
(a)the property be listed for sale by private treaty or auction at the earliest possible date by an agent as agreed and failing agreement an agent as nominated by the President of the REIV (or his or her delegate);
(b)the method of sale and list price be as agreed between the parties and failing agreement within 14 days of a written proposal by one party to the other be as nominated by the real estate agent;
(c)the sale price of the property be such amount as is agreed between the parties and failing agreement any offer to buy the property that is at least 95% of the list price be accepted by the parties as the sale price;
(d)the parties co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;
(e)upon agreement being reached for sale of the property the parties execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor;
(f)the proceeds of sale of the property be paid in the following manner and priority:
(i)payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;
(ii)payment of the legal costs and outlays relating to the sale (i.e. conveyancing costs);
(iii)payment to the respondent of the sum outstanding as per order 1 plus any interest owing and calculated in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021; and
(iv)the balance to the applicant.
4.The trustee of the applicant’s superannuation fund namely “Super Fund D” (“the fund”) member no. … is directed to split that policy pursuant to s.90XT of the Family Law Act 1975 as herein set out.
5.Pursuant to Section 90XT (4) of the Family Law Act 1975, the amount of $100,000 be allocated as the base amount to the respondent out of the applicant’s interest in the fund.
6.Pursuant to Section 90XT(1)(a) of the Family Law Act 1975, when the trustee of the fund makes a splittable payment out of the applicant’s interest in the fund, the trustee shall:
(a)pay to the respondent the entitlement calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001; and
(b)make a corresponding reduction in the entitlement that the applicant would otherwise had in the fund but for these orders.
7.The operative time for the splitting of the fund shall be four business days after the trustee of the fund is served with a copy of this order.
8.The trustee do all such acts and things and sign all necessary documents to fulfil any obligation set out in the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 so that the respondent’s entitlement can be calculated and paid to her in accordance with these orders.
9.Until the payment of the interest of the respondent pursuant to these orders, the applicant be and hereby is restrained from doing any act or thing or giving any direction which would have the effect of reducing or prejudicing the entitlements of the respondent.
10.Orders 4 to 9 herein are binding on the trustee of Super Fund D.
11.The applicant otherwise retain, to the exclusion of the respondent, all of his right, title and interest in:
(a)any monies in bank accounts in his sole name;
(b)any superannuation entitlements in his name;
(c)any shares or investments held in his name; and
(d)his personal effects and the furniture and chattels in his possession.
12.The applicant otherwise assume sole responsibility for any loan or liability in his name or any liability encumbering any item of property to which he is entitled pursuant to these orders (“the applicant’s liabilities”) and the applicant indemnify the respondent and keep her indemnified in respect of those liabilities except as otherwise provided in these orders.
13.The respondent otherwise retain, to the exclusion of the applicant, all her right, title and interest in:
(a)any monies in bank accounts in her sole name;
(b)any superannuation entitlements in her name;
(c)any shares or investments held in her name; and
(d)her personal effects and chattels in her possession.
14.The respondent otherwise assume sole responsibility for any loan or liability in her name or any liability encumbering any item of property to which she is entitled pursuant to these orders (“the respondent’s liabilities”) and the respondent indemnify the applicant and keep him indemnified in respect of those liabilities except as otherwise provided in these orders.
15.Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) owned by or in the possession of such party as at the date of these orders;
(b)each party forego any further claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named therein;
(d)cash in any joint accounts be divided equally between the parties;
(e)any monies or liabilities held in any bank or credit accounts remain the sole property of owner in whose name the accounts are held;
(f)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(g)each party remain responsible for any debts in that party’s name; and
(h)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
16.All extant applications be otherwise dismissed.
Note: Pursuant to r.10.13(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, the court may vary or set aside a judgment or order made in the absence of a party.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Munston & Munston has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE RLEY:
introduction
This is an application for property adjustment under s.79 of the Family Law Act 1975 (“the Act”). The husband is the applicant and the wife is the respondent. The husband is 38 years old and the wife is 39 years old. The parties commenced a de facto relationship in 2010 and were married in 2014. They have one child, X, who was born in 2016 and is now six years old. The parties separated on 1 July 2018, when X was two years old. The parties were divorced on 18 March 2020. Their relationship was thus about eight years long.
Immediately after separation, X lived with his mother. The wife has had some serious issues with drugs. An independent children’s lawyer was appointed in the parenting aspect of the proceedings. The wife participated in the proceedings spasmodically, and eventually not at all. Interim parenting orders were made in the wife’s presence on 14 August 2020 providing for:
(a)X to live with his father;
(b)X to spend time with his mother under the supervision of a family friend; and
(c)the mother to do a hair follicle drug test.
The mother never did the hair follicle test, and did not take the opportunity to spend time with X.
Orders were made under s.102NA of the Act on 4 March 2022. The wife did appear in court on that occasion. On that date, and in the wife’s presence, the final hearing was adjourned from 28 March 2022 until 11 April 2022.
The husband obtained legal assistance pursuant to s.102NA but the wife did not.
The mother failed to attend the final hearing on 11 April 2022. Final parenting orders were made with the consent of the father and the independent children’s lawyer. They provided for:
(a)the father to have sole parental responsibility for X;
(b)X to live with his father; and
(c)X to spend time with his mother at a contact centre pending her completion of a six month hair follicle test.
On 11 April 2022, the property aspect of the proceeding was adjourned to 25 May 2022 for final hearing. In the lead up to that hearing, the wife did not spend time with X at a contact centre as provided for in the final parenting orders. The wife did not attend the final property hearing on 25 May 2022. The hearing proceeded in the wife’s absence. The husband was given leave to file and serve some further documents by 22 June 2022, including evidence that the superannuation trustee of the husband’s superannuation fund had been given procedural fairness. Judgment was otherwise reserved.
Based on the material before the court, I am satisfied that the wife was given adequate notice of all court events, and could have participated in the parenting and property final hearings if she had chosen to. Those hearings were conducted by Microsoft Teams.
chronology
The husband provided to the court a chronology, which was filed on 24 May 2022. It was substantially as follows:
Date Event 1983 The wife was born: 39 years old.
1983 The husband was born: 38 years old.
2010
The parties commenced cohabitation. The husband owned a two bedroom unit in City E and a vacant block of land in Town F. He also had superannuation valued at $26,596.21.
2011 The husband bought a unit in Suburb G, in Queensland.
2014 The parties were married.
2015 The property in B Street, Town C was purchased in joint names. The husband paid for the deposit.
2016 The child of the relationship, X, was born. He is now six years old.
1 July 2018 The parties separated on a final basis.
25 June 2019 The husband initiated these proceedings.
28 August 2019 At a duty list hearing, interim parenting orders were made by consent.
19 November 2019 The husband filed an amended initiating application.
10 December 2019 At an interim hearing, the wife did not appear.
4 February 2020 The wife applied for and was granted an interim family violence intervention order, naming the husband as the respondent.
3 March 2020 The wife failed to attend a conciliation conference and was ordered to pay the husband’s costs fixed in the sum of $1,500.
12 March 2020 Interim property orders were made by consent for the parties to make full and frank disclosure within 14 days of a request and for the wife to file a financial statement within 14 days.
3 April 2020 The wife filed responding materials.
1 April 2022
A family report prepared by Dr H was released to the parties.
5 April 2022 The husband filed and served an amended initiating application.
11 April 2022 The wife failed to appear at the final hearing.
Final parenting orders were made for the husband to have sole parental responsibility for X, for X to live with the husband and for X to spend supervised time with the wife pending her completion of a six month fair follicle test.
The property proceedings were adjourned to 25 May 2022 for final hearing.
4 May 2022 Company J Valuers were engaged to conduct a valuation of the B Street, Town C property.
23 May 2022 The husband filed and served a further amended initiating application and trial affidavit with respect to property matters.
25 May 2022 The final hearing for property matters was held.
22 June 2022 The husband filed further material, with leave.
material relied upon
At the hearing on 25 May 2022, the husband said that he relied upon:
(a)his further amended initiating application filed on 23 May 2022;
(b)his trial affidavit sworn on the 23 May 2022;
(c)the wife’s affidavit sworn on 1 December 2021;
(d)his case outline filed on 24 May 2022;
(e)the table of assets, liabilities, contributions and future needs filed on 24 May 2022; and
(f)the chronology filed on 24 May 2022.
Although the husband said that he relied on the wife’s affidavit sworn on 1 December 2021, it did not contain evidence on the point that he wanted to rely on it for, namely, that he had paid the wife $10,000 as a part property settlement. Consequently, the husband did not rely on the wife’s affidavit. He subsequently filed his own affidavit on that point.
At the final hearing on 25 May 2022, the husband was granted leave to file and serve further material by 22 June 2022. He filed that material, and also relied on it. The additional material was as follows:
(a)the affidavit sworn or affirmed by Mr K on 17 June 2022 (valuation of the B Street, Town C property);
(b)the affidavit of Ms L sworn on 22 June 2022 (service);
(c)the husband’s amended financial statement filed on 22 June 2022;
(d)his affidavit sworn on 22 June 2022; and
(e)a copy of a Super Fund D procedural fairness letter emailed to chambers on 22 June 2022.
As mentioned above, the wife did not participate in the hearing. She therefore did not rely on anything. Therefore, I do not take her affidavit evidence into account. The husband was not cross-examined. He gave some oral evidence at the final hearing and, with leave, he updated some of his evidence by affidavit following the hearing. Except where otherwise stated, I accept his evidence as it was eventually presented.
the husband's proposal
Basically, the husband sought 80% of the property pool including superannuation, largely on the basis of substantial initial contributions and substantial ongoing needs. The husband’s proposed final orders were contained in his further amended application filed on 23 May 2022. However, he made some further adjustments to his proposal during the hearing. Ultimately, the husband’s proposed orders were as follows:
1. That the Applicant pay to the Respondent the sum of $41,200 (“the payment”) within 60 days.
2.That the following be deducted from the payment and be retained by the Applicant:
a. Half share of the valuation costs paid by the Applicant
b. The sum of $1500 for costs pursuant to the Orders made on 3 March 2020
3. Contemporaneously with the payment:
(a) the Respondent do all such acts and things and sign all such documents as may be required to transfer to the Applicant, at the expense of the Applicant, all of her right, title and interest in the real property situate and known as [B Street, Town C] in the State of Victoria (“the property”);
(b) each of the parties do all such acts and things and sign all such documents as may be required to refinance the mortgage encumbering the property into the Applicant's sole name or as otherwise directed by the Applicant so long as the Respondent’s name is removed from the mortgage associated with the property; and
(c) the Applicant indemnify the Respondent against all payments and liability pursuant to the mortgage and all apportionable rates, taxes and outgoings of or with respect to the property of whatsoever nature and kind.
4. If the Applicant fails or refuses to make the Payment to the Respondent then the parties do all acts and things and sign all such documents as may be necessary to sell the property and for this purpose:
a. The property shall be listed for sale by private treaty or auction at the earliest possible date by an agent as agreed and failing agreement an agent as nominated by the President of the REIV (or his delegate).
b. The method of sale and list price shall be as agreed between the parties and failing agreement within 14 days of the date of these Orders shall be as nominated by the real estate agent.
c. The sale price of the property shall be such amount as is agreed between the parties and failing agreement any offer to buy the property that is at least 95% of the list price shall be accepted by the parties as the sale price.
d. The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
e. That upon agreement being reached for sale of the property the parties shall execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor.
f. The proceeds of sale of the property shall be paid in the following manner and priority:
i. Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale.
ii. Any mortgage encumbering the home.
iii. Payment of the legal costs and outlays relating to the sale (ie. Conveyancing costs).
iv. To make the payment to the Respondent the sum outstanding as per order 1 plus any interest owing and calculated in accordance with the Family Law Rules;
v. The balance to the Applicant.
5.The Applicant otherwise retain, to the exclusion of the Respondent, all of his right, title and interest in:
a. any monies in bank accounts in his sole name;
b. any superannuation entitlements in his name;
c. any shares or investments held in his name; and
d. His personal effects and the furniture and chattels in her possession.
6. The Applicant otherwise assume sole responsibility for any loan or liability in his name or any liability encumbering any item of property to which he is entitled pursuant to these Orders (“the Applicant’s liabilities”) and the Applicant indemnify the Respondent and keep her indemnified in respect of those liabilities except as otherwise provided in these Orders.
7. The Respondent otherwise retain, to the exclusion of the Applicant, all her right, title and interest in:
a.Any monies in bank accounts in her sole name;
b. Any superannuation entitlements in her name;
c. Any shares or investments held in her name;
d. His personal effects and chattels in her possession.
8.The Respondent otherwise assume sole responsibility for any loan or liability in her name or any liability encumbering any item of property to which she is entitled pursuant to these Orders (“the Respondent’s liabilities”) and the Respondent indemnify the Applicant and keep him indemnified in respect of those liabilities except as otherwise provided in these Orders.
9.That unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent Orders:
a.Each party be solely entitled to the exclusion of the other to all property (including choses- in-action) owned by or in the possession of such party as at the date of these orders.
b. Each party forego any further claims they may have to any superannuation benefits belonging to or earned by the other.
c. Insurance policies remain the sole property of the owner named therein.
d. Cash in any joint accounts is to be divided equally between the parties.
e. Any monies or liabilities held in any bank or credit accounts remain the sole property of owner named in whose name the accounts are held.
f. Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party in entitled pursuant to these orders.
g. Each party remain responsible for any debts in that party’s name.
h. Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
SUPERANNUATION SPLITTING
1. That the Trustee of the Applicant’s Superannuation fund namely “[Super Fund D]” (“the Fund”) Member no. … is directed to split that policy pursuant to s.90XT Family Law Act as herein set out.
2. That pursuant to Section 90XT(4) of the Family Law Act 1975, the amount of $40,000 be allocated as the base amount to the Respondent out of the Applicant’s interest in the Fund.
3. That pursuant to Section 90XT(1)(a) of the Family Law Act, when the Trustee of the Fund makes a splittable payment out of the Applicant’s interest in the Fund, the Trustee shall:
(a) pay to the Respondent the entitlement calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001; and
(b) make a corresponding reduction in the entitlement that the Applicant would otherwise had in the Fund but for these Orders.
4. That the operative time for the splitting of the Fund shall be four (4) business days after the Trustee of the Fund has been served with a copy of this Order.
5. That the Trustee do all such acts and things and sign all necessary documents to fulfill any obligation set out in the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 so that the Respondent’s entitlement can be calculated and paid to her in accordance with these Orders.
6. Until the payment of the interest of the Respondent pursuant to these Orders, the Applicant be and hereby is restrained from doing any act or thing or giving any direction which would have the effect of reducing or prejudicing the entitlements of the Respondent.
7. That all extant Applications and Responses be dismissed.
the wife's proposal
The wife did not participate in the property aspect of the proceeding. She did not provide the court with any proposed property orders. Her response filed on 3 April 2020 did not explicitly state the orders that she sought. It just made some assertions.
the legislation
Section 79 of the Act gives the court power to alter the interests of the parties to a marriage in the property of the parties to that marriage. Subsection 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.
Subsection 79(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:
(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.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(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; and
(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
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(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; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person — the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
the approach to applications under s.79
In Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act as follows:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property”. The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order. (emphasis in original)
38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. … (footnotes omitted)
39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered. (footnotes omitted)
40.Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. (emphasis in original) (footnote omitted)
…
42.In many cases where an application is made for a property settlement order, 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). (emphasis in original)
Stanford requires the following matters to be determined in applications brought under s.79 of the Act:
(a)whether the parties have separated;
(b)the assets and liabilities of each party;
(c)the contributions of each party;
(d)the future needs of each party;
(e)whether it is just and equitable to make any orders altering the interests of the parties in their property; and
(f)what orders, if any, are just and equitable in all the circumstances of the case.
Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above.
Whether the parties have separated
It is clear the parties have separated.
The assets and liabilities
The husband filed a table of assets, liabilities, contributions and future needs (“the Table”) on 24 May 2022 and an amended financial statement on 22 June 2022. The wife did not contribute to the Table. The husband made changes to the Table during the course of the hearing, and some were necessary due to the updated financial statement that the husband filed following the hearing. Ultimately, the evidence before the court in relation to the assets and liabilities at the time of trial was as follows.
The parties’ only joint asset was the property at B Street, Town C. It was recently valued at $80,000. The parties had no joint liabilities.
The husband’s financial statement sworn on 22 June 2022, said that the husband had cash in the bank of $50,000 and shares worth $50,000. However, the husband’s affidavit, sworn on 23 May 2022, two days before the trial, and the Table, filed on 24 May 2022, said that his cash in the bank amounted to $60,000 and his shares were worth $55,000. That is an extra $15,000.
The husband did not explain where the additional $15,000 had gone in the space of one month. I have to use the figures as at the date of the trial. Consequently, I will use the figures in the husband’s affidavit sworn on 23 May 2022. Using those figures, the husband’s individual assets at the time of trial totalled $166,000 and were comprised of the following:
(a)bank accounts $60,000
(b)shares $55,000
(c)work vehicle $20,000
(d)Motor Vehicle 1 $30,000
(e)tools $1,000
The husband’s individual liabilities consisted of a $30,000 loan on the Motor Vehicle 1.
The husband’s superannuation in the Table as originally filed was worth $226,116,30. However, the husband updated his superannuation in his financial statement filed on 22 June 2022, saying it was worth $329,643.76. That is about $100,000 more than the husband initially claimed.
So, the husband’s individual assets, less liabilities, plus superannuation at the time of trial were worth $166,000 minus $30,000 plus $329,643.76, making a total of $465,643.76.
The husband said he was unaware of the wife’s financial situation, except that he believed that she had superannuation worth $4,701, (as disclosed in her financial statement filed on 3 April 2020) and she received a part property settlement of $10,000 on 1 December 2021. The part property settlement will be taken into account under s.75(2)(o) of the Act. The wife’s financial statement filed on 3 April 2020 also disclosed credit card and other debts of $18,000 and no assets apart from her share of the B Street, Town C property, household contents, nominal savings across two bank accounts and an engagement ring worth $2,000. However, that financial statement is more than two years out of date, and the wife was not available for cross-examination or to say that she relied on it, so I cannot give it any significant weight.
The pool, in so far as it is known, is thus, $80,000 (for B Street, Town C), plus $465,643.76 (being the husband’s individual assets less liabilities plus superannuation) plus $4,701 (for the wife’s superannuation), making a total of $550,344.76. The non-superannuation assets total $216,000.
Contributions
a. Initial contributions
The husband claimed that, at the commencement of the relationship in 2010, he owned a two bedroom unit in City E, and a vacant block of land in Town F. He estimated that he brought approximately $150,000 worth of property into the relationship. However, he did not provide any retrospective sworn valuations. The husband did provide a letter from a real estate agent as to the value of the City E property in 2007. However, the court cannot take that sort of evidence into account. In any event, the letter says nothing about the husband’s equity in the City E property, or the Town F property, which is the critical issue. I am left not knowing whether the City E property and the Town F property had any equity in them at the commencement of the relationship, or how much that equity might have been.
The husband also said that he had about $26,000 of superannuation at the commencement of the relationship. That claim was not contradicted and I accept it.
The husband alleged, and I have no reason to not accept, that the wife brought no assets of any significance to the relationship.
b. Contributions during the relationship
In 2011, during the relationship, the husband bought a property in Suburb G in Queensland in his sole name. He said he paid $450,000 for it, and it was sold in October 2019, following separation in July 2018, for $630,000. The husband provided the settlement statement on 22 June 2022. It shows that the property was subject to a mortgage of $397,497.70 and that the proceeds of sale of $198,918.17 were paid to the husband.
Obviously, the Suburb G property was bought by the husband with matrimonial funds. It was not a contribution on the husband’s part. However, it is possible that, following separation, the husband paid the mortgage on the Suburb G property from his post-separation earnings. However, it is also possible that no one paid the mortgage, and the arrears were allowed to accumulate. I simply do not know. I cannot treat this as a post-separation contribution of any significance.
During the relationship, the City E property and the Town F property were sold and the proceeds applied to the benefit of the relationship. The amount of the proceeds of sale is unclear.
In 2015, the parties jointly bought the B Street, Town C property. However, the husband claimed that he paid for it entirely with his own savings. That may be so. Nevertheless, the B Street, Town C property was bought during the relationship. The husband did not claim to have any savings at the commencement of the relationship. It follows that the B Street, Town C property was bought with matrimonial funds.
The husband worked full-time during the relationship as a tradesman. He said that the wife worked intermittently as an entertainer, and spent anything she earned on herself. He said that he paid for all bills and daily expenses. He said that the parties’ homemaker contributions were equal.
I accept these claims because the wife did not contradict them. Having said that, the money contributed by the husband was matrimonial funds.
The husband also claimed that he and the wife cared for X equally. I do not accept this claim because it is implausible. The husband was working full time, and he claims the wife only worked intermittently. I conclude that the wife did the majority of childcare during the relationship.
c. Contributions post separation
Following separation in July 2018, X lived with his mother until August 2020. Since then, X has lived with his father. That means that each parent has had about two years caring for X post-separation.
At the time of separation, the husband said that the parties divided the contents of the former matrimonial home equally, they each had about $25,000 in savings, and they each had a car, the husband’s being worth about $9,000 and the wife’s being worth about $5,000. I accept those claims, because they were not challenged.
The husband said that he also gave the wife $10,000 at the time of separation. This was obviously from matrimonial funds. Of the $10,000, $5,000 was notionally the wife’s anyway. Nevertheless, the other $5,000 will be taken into account under s.75(2)(o) of the Act.
Following separation, the husband claimed that he paid the wife child support of $1,400 per month until he was made redundant on 4 December 2019. He claimed that his child support was then recalculated to $120 per month, but he continued to pay the wife an extra $800 per month voluntarily. These claims were not disputed, and I accept them. There was no suggestion that the wife has paid the husband child support since X began living with the husband.
The husband has also paid for two valuations of the B Street, Town C property, the second valuation being required because the first one was out of date.
As mentioned above, the Suburb G property was sold in October 2019. The settlement statement shows that the proceeds of sale were paid to the husband and were $198,918.17. The husband said that he paid about $20,000 for capital gains tax. He provided a taxation estimate which indicated that his capital gain was $34,688. I very much doubt that the capital gains tax on that amount was $20,000. The husband should have provided his actual income tax assessment notice for the 2019/2020 income year. It was only a couple of years ago. He should have retained that document himself, or obtained a copy from his tax agent or the tax office.
But, assuming that the husband received $180,000 from the proceeds of sale of the Suburb G property, where did that money go? The husband said that he bought shares which are now worth $55,000 and put $60,000 in the bank. That totals $105,000. The husband said in oral evidence that he had used the balance, being about $80,000 of matrimonial funds, for his own living expenses and holidays since separation. That will also be taken into account under s,75(2)(o) of the Act.
The s.79(4)(d), (e), (f) and (g) and the s.75(2) factors
The husband is 38 years old and the wife is 39 years old. The husband is a self-employed tradesman who earns about $83,000 per year. The wife’s present circumstances are not known with certainty, but on past performance, she works intermittently as an entertainer. The husband’s case in the parenting aspect of the proceedings is that the wife has serious drug problems, which make her unfit to care for X. The same problems presumably make it very difficult for her to earn a substantial income.
The husband has the care and control of X.
It was not suggested that the parties have anything other than the usual commitments to support themselves, or any responsibility to support anyone other than X.
The husband is not eligible for a pension, but it is possible that the wife is. A modest standard of living for each party would be appropriate.
It was not suggested that a settlement in this matter would assist either party to gain an education or start a business. It was not suggested that any proposed orders would have any impact on the position of any creditors.
It was not suggested that either party contributed to the other’s earning potential, or that the marriage affected either party’s earning potential. It was not suggested that the proposed orders would impact on either party’s role as a parent.
It was not suggested that either party is cohabiting with another person.
The wife does not appear to be paying any child support for X, and it is unlikely that she will in the future.
The only other relevant facts or circumstances are the $10,000 that the wife got from matrimonial funds as a part property settlement in December 2021, and the $80,000 the husband used from the matrimonial asset pool following the sale of the Suburb G property. I mentioned these matters under the heading of post-separation contributions, but will not take them onto account twice.
Whether it is just and equitable to alter the parties’ property interests
The husband contended that it would be just and equitable to alter their property interests in this case. In view of paragraph 42 of Stanford, the fact that the parties are no longer living in a marital relationship and the various findings made above in relation to contributions and future needs, I also consider that it would be just and equitable to alter the parties' property interests in this case.
What orders ARE just and equitable?
The husband formally submitted that an 80/20 split of the superannuation and non-superannuation should be made in his favour. However, in oral submissions, the husband’s counsel conceded that, in relation to superannuation, that proposal was probably ambitious. However, he also submitted that something more than the usual 50/50 split would be appropriate in the present case.
The significant factors in this case are discussed above and include the following:
(a)the relationship lasted about eight years;
(b)at the commencement of the relationship, the husband owned the City E property and the Town F property, but his equity in those properties is unknown;
(c)the wife brought no material possessions of value to the relationship;
(d)the husband had superannuation of about $26,000 at the commencement of the relationship;
(e)during the relationship, the husband was the principal breadwinner and the wife was the primary carer of the parties’ child;
(f)the husband accrued about $200,000 of superannuation during the relationship;
(g)following separation, the husband and the wife have each had X in their care for about the same amount of time;
(h)the husband paid quite a lot for child support when X was in the mother’s care, but the mother has not paid a significant amount of child support, if any, since X has been in the father’s care;
(i)the wife received $10,000 from matrimonial funds as a part property settlement in December 2021;
(j)the husband has spent at least $80,000 of matrimonial funds since separation on living expenses and holidays; and
(k)the wife has a limited earning capacity, due to her health issues, consisting of drug use.
The non-superannuation assets total $216,000. The wife has had about $10,000 of non-superannuation assets since separation, and the husband has had about $80,000 of non-superannuation assets since separation. The husband was the principal breadwinner. He may have contributed properties of value at the commencement of the relationship, but his equity in them is unknown. Since separation, the parties have cared for X for approximately equal amounts of time. However, the husband paid the wife child support, but the wife did not pay the husband child support. As things presently stand, the husband will have the care of X for many years to come.
In my view, a just and equitable division of the non-superannuation assets, bearing in mind the division of superannuation assets discussed below, is 70% to the husband and 30% to the wife. 30% of $216,000 is $64,800. From that, there needs to be deducted $1,500 for the costs of the conciliation conference that the wife failed to attend, and $2,585, being the wife’s half share of the costs of the valuation of the B Street, Town C property. That means that the amount that the husband must pay the wife is $60,715.
The superannuation assets total $334,344.17, consisting of the husband’s $329,643.17 and the wife’s $4,701.
The husband had $26,596.21 in superannuation on 1 July 2008. When the relationship commenced in 2010, I would estimate that he had about $30,000 in superannuation. On 1 July 2018, at the time of separation, the husband had $226,116.30 in superannuation. Therefore, during the course of the relationship, his superannuation increased by roughly $200,000. He now has $329,643.76 in superannuation.
There is nothing to suggest that the wife had any superannuation at the commencement of the relationship. She now has $4,701 in superannuation.
The husband proposed that the wife be given a super split of $40,000, being 20% of the $200,000 increase in the husband’s superannuation during the course of the relationship. In my view, taking into account all of the circumstances of this case, and the split of non-super assets discussed above, it would be just and equitable for the wife to receive a super split of $100,000. The trustee of the husband’s superannuation fund has been afforded procedural fairness.
There will be orders reflecting these determinations, largely in the terms sought by the husband, with some minor amendments. For example, there is no need for an order regarding the refinancing of the mortgage on the B Street, Town C property, because there is no such mortgage.
I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Riley. Associate:
Dated: 22 July 2022
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