Nathan and Nathan

[2007] FamCA 589

FAMILY COURT OF AUSTRALIA

NATHAN & NATHAN [2007] FamCA 589

FAMILY LAW - APPEAL – Property settlement – Section 75(2) factors – Long marriage of approximately 24 years – Pool of assets valued at $260,000 – Federal Magistrate concluded that there had been equal contributions and based upon the husband’s greater earning capacity there should be a section 75(2) adjustment of 15 per cent in favour of the wife, leaving a 65:35 spilt to the wife – Although the husband’s evidence was unsatisfactory, evidence of the husband’s income and expenditure did not necessarily show a greater earning capacity considering all sources of capital and income received by him post separation – No section 75(2) adjustment was appropriate as both parties have very limited earning capacities and significant medical disabilities – Appeal allowed – Equal division of asset pool ordered

Family Law Act 1975 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)

APPELLANT: MR NATHAN

RESPONDENT: MS NATHAN

APPEAL FILE NUMBER: SA 26 of 2007

FILE NUMBER: LNM 1301 of 2005

DATE DELIVERED: 7 June 2007

PLACE DELIVERED: Launceston

JUDGMENT OF: Kay J

HEARING DATE: 7 June 2007

REPRESENTATION

COUNSEL FOR THE APPELLANT: MR AYLIFFE

SOLICITOR FOR THE APPELLANT: DOOLAN AND BROTHERS

COUNSEL FOR THE RESPONDENT: MR MCGUIRE

SOLICITOR FOR THE RESPONDENT: TEMPLE-SMITH PARTNERS

Orders

1. The appeal be allowed.

2. The orders made by Federal Magistrate Roberts on 27 February 2007 be varied as follows:

   (a)In lieu of order 1 it is ordered “That subject to Order 5 hereof and on or before 6 September 2007, Ms Nathan (‘the Wife’) pay to Mr Nathan (‘the Husband’) the sum of ninety two thousand three hundred dollars ($92,300) (‘the required sum’)”. 

(b)In order 5, delete all words after “the Husband and the Wife” and substitute the word “equally”.

1. The Court grants to the appellant a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

2. The Court grants to the respondent a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.

FAMILY COURT OF AUSTRALIA AT LAUNCESTON

APPEAL NUMBER: SA26 of 2007
FILE NUMBER: LNM 1301  of 2005

MR NATHAN

Appellant

And

MS NATHAN

Respondent

REASONS FOR JUDGMENT 

1. This is an appeal from orders made by Roberts FM on 27 February 2007 in property proceedings between the parties Ms Nathan, the wife, and Mr Nathan, the husband.

2. The parties had been together in a relationship that commenced in February 1979 and ended when they separated in October 2003.  In the course of their relationship they managed to accumulate a very modest pool of assets which the Federal Magistrate concluded had a value of about $260,000, the most significant asset being the former matrimonial home which had a value of $235,000 and was encumbered by about $50,000.

3. Other than some modest chattels and a small amount of superannuation held by the wife and some cash savings held by the husband, the parties had very little capital to show for their 24 and a half years together.

4. For much of that time they had been dependent upon social security although eventually the wife obtained some secure employment earning very modest amounts for what was no doubt hard work.  She is presently on a salary of some $27,000 per annum and looking forward to eking out an existence on a very modest income indeed.

5. The husband's income position was somewhat more difficult to pin down.  It is clear that during the course of the marriage he was not in any long periods of any formal employment but he was involved in trading in motor vehicles, shooting some kangaroos, chopping some wood and doing a number of small tasks which had generated some income for the family. 

6. Post-separation he did obtain some employment as a truck driver.  He earned about $19,000 over two years before he was involved in a trail‑bike riding accident that left him severely disabled and thereafter he begun to live on social security, caring for one of the children of the parties who was an autistic child and obtaining a carer's allowance.  More recently he has entered into a new domestic arrangement with a lady and they seem to support each other, again without necessarily any visible means of support.

7. Notwithstanding the submissions made by each party in relation to the matter before the Federal Magistrate, his Honour concluded that it was appropriate to divide the asset pool between the parties equally based on the various contributions to be considered under the provisions of s 79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”)

8. The wife had urged that the husband had virtually made no contribution.  The husband had urged somehow that his contributions had been greater than the wife's.  Eventually the Federal Magistrate concluded that there had been an equality of contribution.  That finding is not the subject of any challenge in this appeal.

9. The Federal Magistrate did, however, determine that having regard to one s 75(2) factor, namely a finding that the husband was capable of earning more than the wife, that it would be just and equitable to make an a further adjustment of the asset pool from 50:50 to 65:35 in favour of the wife.  This gave the wife the first 30 per cent of a pool of assets valued at $260,000.  That gave her the first $78,000 before the balance was divided equally.  She was to receive almost twice as much as the pool of the husband. 

10. Sometimes percentages are misleading because the size of the pool is so small that the adjustment is a modest one, but in this case they are not entirely misleading because the income-earning capacity of the parties is an extremely modest one.  At best each of them would be seen to be earning something less than average weekly earnings and probably less than that which each of them need to survive on.  Indeed one of the outcomes of these proceedings is that it seems inevitable that the house will have to go because the wife will be unable to demonstrate a borrowing capacity necessary to keep this very modest house.

11. The key finding of the Federal Magistrate occurs in his reasons for judgment where he said:

    61.I find it very easy to conclude that the Husband is still an active player in the “cash economy”, notwithstanding injuries that I shall refer to below.  This is because:

    i)He has accumulated $39,000 in savings (that he admits to) in two tins and one bank account.

    ii)He claims to have an aversion to banks but he and his partner have opened numerous bank accounts and moved fairly significant sums between them.

    iii)He and his partner had a term deposit for $25,000 which he initially claimed was the source of the money in the two tins.  However, he subsequently said that he had spent some of that money on various purchases and a six week holiday in Queensland.

    iv)His various purchases have included a Holden Commodore for $3,000, motorcycles (which he and one son still retain) for $3,600 or more, a Yamaha road bike for $8,000, a Nissan Navara for $2,000 and at least one new firearm.  In addition, he claimed to have bought and sold nine trail bikes since separation.

    62.It is therefore not hard to conclude that the Husband is capable of earning more than the Wife and one must suspect that he will pay little or no income tax.

12. His Honour also paid attention to the fact that each party has some difficulties with their medical condition:

    63.The Wife stated that she was generally in good health although she suffered from glaucoma and congenital blindness in one eye.  However, it would appear that these conditions have not been an impediment in relation to her employment.

    64.The Husband relied upon the unchallenged evidence of an orthopaedic surgeon in relation to his injuries that he suffered as a consequence of a motorcycle accident which occurred in mid December 2005.  The orthopaedic surgeon commented in his report as follows:

    I doubt whether he will be able to return to his normal occupation as a truck driver.  (He) tells me that he left school after Grade 8 and has no other skills.  I expect it will be difficult for him to be retrained and/or find an occupation to which he is suited by either his skills or future physical capabilities.

    …

    66.I note that the Husband intends to make a claim against the Motor Accidents Insurance Board in relation to the motorcycle accident.  However, I conclude that the injuries that the Husband suffered in that motorcycle accident and his Meniere’s Disease will not greatly affect his earning capacity, at least in relation to buying and selling motorcycles and cars and possibly in relation to selling kangaroo meat.

13. So what I have are two parties with extremely modest income, a finding by the Magistrate that the husband's earning capacity was "more than the wife" based on a finding that the husband's was possessed of cash and assets as at the date of hearing even though they were not fully disclosed by him in his written documents. 

14. They were said to be

    ·    $39,000 in cash

    ·    money that had been otherwise spent on a six‑week holiday in Queensland,

    ·    the acquisition of a Holden Commodore for $3000,

    ·    some motorcycles for $3600,

    ·    a Yamaha road bike for $8000,

    ·    a Nissan Nivara for $2000 and

    ·    at least one firearm.

15. In addition, Counsel for the wife pointed out that the evidence disclosed that the husband had also spent $10,000 on acquiring a bike which was written‑off in the accident in December 2005.

16. The difficulty in reaching the conclusion that the Magistrate did, that these assets and expenditure were indicative of the husband having a greater earning capacity than the wife, is that they can be readily otherwise explained.

17. It is conceded by counsel for the wife that the husband took with him from the marriage

    ·    $12,000, being half of a motor vehicle insurance claim,

    ·    $10,000 in cash, a finding of the Magistrate, and

    ·    $10,600 for chattels sold.

18. It was further conceded that post-separation the husband earned $19,500 in wages and that he received $12,650 from the insurance claim arising out of the damage to the motorbike in his trail‑bike accident. 

19. These figures alone total $64,750 which is a source of funds adequate to meet the asset pool identified by the Magistrate in paragraph 61 without drawing a conclusion that the husband must somehow be demonstrating an earning capacity greater than the wife. 

20. True it is that he has had to live for three years over the period, but he has also been in receipt of social security for two of those three years and has lived rent-free with his son and more latterly has entered into a new relationship with a new partner who it is said in the findings not to be in receipt of income other than Centrelink benefits.

21. For all of those matters, even if the husband had demonstrated a capacity for some earnings from what was described by the Magistrate as “the cash economy”, it was not open to the Federal Magistrate to reach the conclusion that the husband was capable of earning so much more than the wife that it would be appropriate to make an adjustment for that imbalance in earning capacity under s 79 of the Act.

22. To the extent that the Magistrate has purported to do so, in my view, demonstrates an error on behalf of the Magistrate.

23. A global view of this case shows two people with very limited earning capacity, two people with significant medical disabilities.  They are both aged 46.  Neither of them has a very secure economic future to look forward to.  The husband appears able to live on his wits.  The wife has secure employment at least with some modest superannuation available to her.  It does not seem to me to be a case in which any s 75(2) adjustment is appropriate.

24. In those circumstances I propose to allow the appeal, the effect of which is to move back to the equal division of the asset pool.  To achieve that exercise it is appropriate orders 1 and 5 be amended.

I certify that the preceding twenty four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kay

Associate: 

Date:  14 June 2007