Neal and Garnett
[2010] FMCAfam 97
•12 February 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NEAL & GARNETT | [2010] FMCAfam 97 |
| FAMILY LAW – Property – short marriage – parties separated almost three years ago – assessment of contributions – treatment of gifts made to the wife’s family during the marriage – assessment of s.75(2) factors – husband twenty years older than the wife and having the majority care of child aged 7. |
| Family Law Act 1975(Cth), ss.75 & 79 |
| Re NHC & RCH (2004) FLC 93-204 |
| Applicant: | MS NEAL |
| Respondent: | MR GARNETT |
| File Number: | SYC 6550 of 2007 |
| Judgment of: | Terry FM |
| Hearing dates: | 8 & 9 December 2009 |
| Date of Last Submission: | 9 December 2009 |
| Delivered at: | Darwin |
| Delivered on: | 12 February 2010 |
REPRESENTATION
| Applicant: | In Person |
| Respondent: | In Person |
ORDERS
That within 42 days of the date hereof the husband shall:
(i)pay the wife the sum of $27,548.20;
(ii)refinance into his sole name the loan from Commonwealth Bank secured by mortgage over Property C.
That contemporaneously with the husband complying with Order 1 the wife shall sign all documents and do all acts and things required to transfer to the husband at the expense of the husband the whole of her right title and interest in the Property C property and the husband shall thereafter indemnify the wife and keep her indemnified from liability for the said loan from the Commonwealth Bank and for all rates taxes and outgoings owing in respect of the property.
That if the husband fails to comply with Order 1 the wife and the husband shall do all acts and things and sign all documents required to sell the Property C property on the following terms:
(a)the property shall be listed for sale with a real estate agent agreed between the parties;
(b)in the event that the parties cannot agree on the nomination of such agent they shall jointly approach the President of the Real Estate Institute of the Northern Territory of Australia and accept his or her nomination of a real estate agent to sell the property;
(c)in the event the parties are unable to agree on a listing price, the time of listing, the method of sale and conditions of such sale in respect of the property they shall accept the recommendations of the real estate agent appointed pursuant to these orders for the sale of the property in respect of each such matter;
(d)upon completion of the sale the proceeds of sale shall be applied as follows:
(i)firstly to pay all costs, commissions and expenses incurred in respect of the sale;
(ii)secondly to pay the amount owing to the Commonwealth Bank in respect of Mortgage No [omitted]
(iii)thirdly to pay the remaining balance as to 30% less $2,540.00 to the wife and 75% plus $2,540.00 to the husband.
That until the transfer of the Property C property to the husband pursuant to order (2) or its sale pursuant to order (3):
(i)the husband shall have sole right to occupy the property; and
(ii)the husband shall be responsible for paying the mortgage payments and all rates and outgoings for the property as they fall due.
That the wife shall upon presentation to her by the husband sign all documents required to transfer to the husband her interest any the bank accounts in joint names with Commonwealth Bank and Circle Credit Union.
UPON NOTING that it is intended that a superannuation splitting order be made in favour of the wife to the effect that an amount equal to 30% of the husband’s superannuation less $112.70 be transferred to the wife, the matter is adjourned to 10.30am on 22 February 2010 so that directions can be made concerning valuation of the husband’s superannuation entitlements and the giving of procedural fairness to the trustee of one of the funds in respect of the proposed splitting order.
That unless specified in these orders and except for the purpose of enforcing payment of any money due under these orders or subsequent orders, each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of each party and superannuation standing in their respective names.
That in the event that either party refuses or neglects to comply with the provisions of these orders the Registrar of the Federal Magistrates Court of Australia at Darwin is hereby appointed to execute all deeds and documents in the name of the defaulting party.
IT IS NOTED that publication of this judgment under the pseudonym Neal & Garnett is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ALICE SPRINGS |
SYC6550 of 2007
| MS NEAL |
Applicant
And
| MR GARNETT |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Neal and Mr Garnett separated in February 2007 after a relationship of less than seven years and a marriage of six years.
Their separation was followed by a protracted and acrimonious dispute about parenting arrangements for their only daughter [X]. The parenting proceedings were commenced in October 2007 and did not finally conclude until November 2009.
In May 2009 the wife filed an application for a property settlement. As the parenting proceedings were already part heard at this time, the property matter was heard separately, in December 2009.
The property pool is small, net around $200,000.00 on any view, and the two significant items of property are the former matrimonial home, which the husband wishes to retain and the wife’s agrees that he should, and the husband’s superannuation. The issue between the parties has always been one of the amount which the husband will need to pay to the wife.
The wife did not propose that she receive any particular amount but rather proposed that she receive 50% of the net property pool. She proposed that she receive the whole of her entitlement in cash, and did not want a superannuation splitting order.
The husband proposed that he pay the wife $10,000.00. He was concerned that if he was required to pay any greater amount he might lose the home. The husband proposed that he retain all of his superannuation.
The husband proposed that a “high percentage” of any money he was obliged to pay be placed into trust for [X] rather than paid to the wife.
The Evidence
The wife relied on her application, affidavit and financial statement all filed on 15 May 2009, and her affidavits filed on 12 October 2009 and 27 November 2009.
The husband relied on his response, affidavit and financial statement all filed on 15 July 2009, and his affidavit filed on 27 November 2009.
Both parties gave evidence and were cross-examined.
Background
The wife is from Vietnam and the husband, although originally from the United States, has been an Australian citizen for some time. The parties met in Vietnam in 2000 when the husband was working there. They commenced a relationship in May 2000 and married in Thailand in December 2000.
After their marriage the parties lived in Vietnam until September 2001 and then came to Australia. In Australia they lived in [B], [K] and [D] before settling in Alice Springs in early 2005.
The parties’ only child, [X], was born in [K] in 2002.
In Australia the husband was consistently employed outside the home, and he accrued superannuation during the marriage. The wife was engaged exclusively in home duties and parenting, save that in the final few months of the marriage she worked one day a week for [workplace omitted]. The wife did not accrue any superannuation.
In December 2005 the parties purchased Property C for $327,000.00. They borrowed $300,000.00 and the balance of the purchase price came from their savings.
The parties separated in February 2007. A detailed history of the events surrounding separation is included in the parenting judgement[1] and I do not propose to repeat the details extensively here. Suffice to say that the husband has continued to reside in the former matrimonial home since separation, and that since early April 2007 [X] has lived there with him.
[1] Neal & Garnett (2009) FMCAfam 1139
Between February 2007 and December 2007 the wife lived in the United States and saw [X] irregularly. In December 2007 the wife returned to live in Alice Springs, and since about March 2008 [X] has spent five nights per fortnight with the wife. The effect of the parenting decision in November 2009 was to continue this arrangement.
The law applicable to the resolution of disputes about property settlement
Pursuant to s.79 of the Family Law Act, a court can make such orders as it considers appropriate altering the parties’ interests in property. Section 79(2) provides that the court shall not make an order under this section unless the court considers that it is just and equitable to do so.
The procedure usually adopted in determining applications for property settlement is:
i)to identify and value the assets and liabilities of the parties;
ii)to assess the contributions of the parties under s.79(4)(a), (b) and (c) and to express those contributions as a percentage;
iii)to consider the matters set out in s.79(4)(d),(e),(f) and (g), which include the matters in s.75(2), so far as they are relevant, and to determine whether any adjustment should be made as a result to the contribution based entitlements;
iv)to consider whether it is just and equitable to make the relevant orders.
In my view it is appropriate to follow this procedure in the present case.
Assets & Liabilities
I am satisfied that the assets are as follows:
Description
Ownership
Value
Property C Joint 385,000.00 Diamond Ring Wife 7,200.00 1971 Chrysler Valiant Husband 5,000.00 1998 BMW motor bike Husband 10,000.00 Household contents Property C Joint 5,000.00 Motor vehicle Wife 8,500.00 TOTAL $420,700.00
The former matrimonial home was valued at $385,000.00 by a licensed valuer in November 2009. At the hearing however both parties argued against the home being included in the pool at this value.
The wife submitted that the home should not go into the pool at $385,000.00 because she had been told that it was worth over $400,000.00. The wife’s case in this regard must fail because the valuer was not called or challenged by cross-examination and the wife did not produce any other admissible evidence of the value of the home.
The husband submitted that the home should be included at its value at about the time of separation, which he claimed would have been “close to the purchase price [of $327,000.00] rather than the current inflated one.”[2]
[2] Husband’s affidavit filed 15 July 2009 paragraph 12
This argument must also fail. The current value of the home is not due to any post-separation efforts by the husband, but simply due to a windfall gain as a result of an increase in property values in Alice Springs. It is entirely appropriate that the wife, one of the joint owners of the home, should share with the husband in any windfall increase in the value of the home and I intend to include the home in the pool at $385,000.00.
The wife tendered a valuation for her ring which valued it at $11,800.00 for “retail insurance replacement.” The husband tendered a valuation of the ring which valued it at $7,200.00 for “probate purposes.” In my view the husband’s valuation is likely to be a market rather than replacement value and I intend to include the ring in the pool at $7,200.00.
The husband owns a 1971 Chrysler Valiant motor vehicle. Neither party provided any independent evidence of the value of this vehicle but the husband estimated its value at $5,000.00 in his financial statement. As the only evidence I have of the value of this vehicle is the husband’s admission against interest I intend to include the vehicle in the pool at this value.
The husband also owns a 1998 BMW motor bike. Neither party provided any independent evidence of its value. The husband estimated its value at $10,000.00 in his financial statement and I intend to accept this as an admission against interest and include the bike in the pool at this value.
There was no independent evidence of the value of the chattels and furniture in the former matrimonial home. The wife claimed that the items were worth $20,000.00, and she particularly identified a motor vehicle engine and a piece of timber as being valuable. The husband estimated in his financial statement that the household contents were worth $5,000.00.
The only evidence of the value of the items in the home is the husband’s admission against interest that they were worth $5,000.00 and I intend to include the items in the pool at this amount.
The wife owns a motor vehicle which she purchased in November 2009 for $8,500.00 and as this purchase was made only a few weeks before the hearing it is reasonable to conclude that the vehicle is worth $8,500.00.
The wife paid for this vehicle by trading in her previous motor vehicle for $3,500.00, and obtaining a loan of $3,500.00 from Mr P (my spelling) and using some savings.
The wife’s previous vehicle, a Daewoo, was purchased in about February 2008. The wife purchased this vehicle for $5,000.00 using money saved by her from her government benefits and loans from friends.
The motor vehicle the wife currently owns is completely a post-separation purchase. However the issue of post-separation contributions and in particular the extent to which the wife has contributed to the financial and non-financial support of [X] post-separation is important in this case. In my view the wife’s motor vehicle should be included in the pool.
It was the wife’s case that the proceeds of sale of a RAV 4 motor vehicle, owned by the parties during the marriage and sold by the husband post-separation, should be added back to the pool.
The husband sold the RAV 4 in September 2007 for $17,000.00 and used the money as follows:
$8,285.84 to pay out the loan on the vehicle;
$5,151.98 to pay the balance owing on the husband’s credit card.
The husband’s evidence was that the remaining amount of $3,563.00 had long ago been used up paying bills such as outstanding rates for the former matrimonial home ($957.00), a Power and Water Bill ($347.55) and motor vehicle registration for another vehicle ($347.55).[3]
[3] Annexure 5 Husband’s affidavit filed on 15 July 2009
Payment of the outstanding loan on the motor vehicle was clearly a reasonable use of the money and the issue is whether the balance of $8,714.00 should be added back.
In Re NHC & RCH [4] the Full Court said as follows about the issue of add-backs:
“we would in the present context draw attention to the following observations by later Full Courts:
2.11There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge. (Marker [1998] FamCA 42, 1 May 1998, per Baker, Kay and Chisholm JJ.)…
46.Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. (Cerini [1998] FamCA 143, 8 October 1998, per Nicholson CJ, Ellis, Kay JJ.)”
[4] Re NHC & RCH (2004)FLC 93-204
The wife has not made out a case for adding the balance of $8,714.00 back to the pool. The money is gone and I am satisfied that it was spent on reasonable living costs, at a time when the wife was in the United States, the husband had already incurred some expense and dislocation as a result of his need to recover [X] from the United States in April 2007 and at the time the husband was the sole financial provider for [X].
I am satisfied that the liabilities are as follows:
Description
Ownership
Value
Loan from Commonwealth Bank secured by mortgage over the Property C property Joint 284,706.00 Loan from Mr P Wife 3,500.00 Total liabilities $288,206.00
The husband provided a bank statement establishing that the amount owing on the mortgage as at 20 November 2009 was $284,706.00.
As the wife’s motor vehicle has been included in the pool, the loan from Mr P in respect of this motor vehicle must be included as a liability. As at December 2009 the wife had made no repayments in respect of this loan.
The husband has other debts. First of all he owes $500.00 on a Go Credit Card. He agreed during cross-examination that he had used this card after separation in 2007 to purchase a vacuum cleaner for about $1,000.00. The husband still owes $500.00 on this card.
It would not be reasonable to include this post-separation debt as a relevant liability.
Secondly, in his financial statement filed on 15 July 2009 the husband said that he owed $3,256.00 on his credit card. However he paid out his credit card in September 2007 when he sold the RAV 4 and he has continued to use his credit card for his own purposes since then, without any consultation with the wife about his spending choices. I do not consider that it would be appropriate to include the husband’s post-separation credit card debt as a relevant liability.
Thirdly when he filed his financial statement on 15 July 2009 the husband stated that he owed about $2,500.00 to Circle Credit Union although documents suggest that the amount owing may be over $4,000.00. This is the balance due on a loan which the husband took out in early 2008. His evidence was that he needed money because he was behind with electricity bills and rates and that had to pay a bill for legal fees incurred in respect of the parenting proceedings.
In my view it would not be appropriate to include the balance owing on this post-separation personal loan as a relevant liability.
I am satisfied that the superannuation is as follows:
Description
Ownership
Value
[H] Husband 34,359.00 [G] Husband 3,213.00 [R] Husband 24,491.00 [O] Husband 7,131.00 [A] Super Wife 112.70 TOTAL $69,306.70
Apart from the [O] Superannuation the husband’s superannuation was acquired during the relationship and post-separation.
The wife acquired no superannuation during the relationship and the $112.70 which she has in [A] Super was acquired post-separation as a result of the wife’s part time employment in 2009 in two [workplaces omitted].
The husband argued that if Mr R and the wife had properly declared the wife’s earnings in 2008 and 2009 the wife would have much more superannuation.
I intend to include the wife’s superannuation in the pool at $112.70 as this is the amount she actually has, but I will consider the husband’s argument about the conduct of the wife and Mr R when dealing later in this judgment with the issue of whether there are any other matters which justice and equity require me to take into account before finally determining each party’s entitlement to a share of the assets.
The effect of the above findings is that the net non-superannuation assets total $132,494.00 and the net superannuation totals $69,306.70. The total net pool is $201,800.70.
Contributions
I must now consider the parties contributions to the acquisition conservation and improvement of the property.
The husband made initial and post-separation contributions to both pools and the wife’s contribution as homemaker and parent must be taken into account in respect of both pools. In my view it is appropriate to assess contributions to one combined asset pool of $201,800.70 rather than to assess contributions to the superannuation and non-superannuation pools separately.
When the parties met in 2000 the husband was employed as [occupation omitted] in Vietnam and the wife, who lived in Hanoi, was working as an [occupation omitted]. The wife was living with her sister and brother. She was providing financial support to her sister who was studying, and may have been assisting her brother from time to time.
After the parties married in Thailand in December 2000 they returned to live in the south of Vietnam while awaiting the grant of a visa which would permit the wife to travel to Australia. This visa eventually came through in September 2001.
The wife had no assets at the commencement of cohabitation.
The husband owned some ICL stock (shares) prior to cohabitation. He sold this stock during 2001 for about $3,000.00 USD[5] and the money was used to meet the parties living expenses while they remained in Vietnam. Some savings of an unknown amount were also used for the parties support while they lived in Vietnam after their marriage.
[5] The wife did not concede that the stock was sold for this much and the husband had no evidence of its sale price and I therefore do not make a precise finding about the value of the stock
The husband owned the 1971 Valiant and the 1998 BMW motor bike at the commencement of cohabitation.
I take into account however that after the parties came to Australia some work was done on these vehicles. There was no evidence to support the wife’s claim that $40,000.00 was spent on the vehicles but they were registered and serviced from time to time and at least $3,000.00 was spent on the Valiant.
The husband also had the [O] Superannuation which he still retains at the commencement of the marriage.
There was no evidence of the value of the Valiant or the BMW Bike or the [O] Superannuation at the time the parties commenced cohabitation.
The wife was unemployed between the date of or shortly prior to the date of the marriage and September 2001, and the husband was also unemployed for the six or seven months preceding September 2001.
After the parties came to Australia the husband obtained work as a [omitted] in [B]. He later obtained a position at [A], and during this period the parties lived in [K] and the husband worked two weeks on two weeks off at the mine. In 2004 the husband left this employment and the parties moved to [D] where the husband was employed at the [D] hospital for six months.
In early 2005 the parties moved to Alice Springs and in mid-2005 the husband obtained a position as [occupation omitted]. The husband has remained employed in or near Alice Springs ever since, although he has changed employment on at least two occasions.
The husband did not provide evidence of his income for the whole of the marriage but his taxable income in the last three years of the marriage was:
$65,599.00 in 2006;
$67,734.00 in 2007;
$78,858.00 in 2008.
The wife did not work in Australia between September 2001 and September 2006. In about September 2006 she obtained employment one day a week at a multicultural playgroup. The wife earned little from this employment. In September 2006, she received $319.35 net, in October 2006 $238.10 net, in November 2006 $255.50 net and in December 2006 $191.60 net.
The husband complained that none of the money the wife received was used for household expenses or put into the joint account. However the amount of money was quite small and there was no evidence that it was wasted.
It is clear that the husband made the overwhelming financial contribution during the marriage and the savings used to assist the parties to purchase the former matrimonial home must have come from his earnings.
During the marriage the wife was the primary homemaker and after [X]’s birth in 2002 she was the primary carer for [X]. It was the wife’s case and I accept that the parties agreed that she would stay home and care for [X] while [X] was young.
I accept that the husband had some input into the care of [X] when he was at home, but there were occasions during the marriage when he worked long hours, and during his employment at [A] he worked on a two week on two week off basis.
Although the husband earned a good income during the marriage and although the marriage was only of six years duration, I am satisfied that when the wife’s role as homemaker and parent is taken into account, and in light of what I accept was the parties agreement about their roles during the marriage, the contributions during the marriage should be assessed as equal.
At the time of the hearing the parties had been separated for nearly three years and it is necessary to make an assessment of post-separation contributions.
The husband has lived in the former matrimonial home since separation. He has made all the mortgage payments and has paid the insurance and rates for the property. It was the husband’s case that he should receive credit for his contribution in this regard.
In most circumstances payment of the mortgage on the former matrimonial home by the party who remains in occupation of the home does not attract an adjustment, however because the other joint owner is excluded from occupation and has to pay rent elsewhere.
In this case however I must have regard to the amount of the mortgage repayments the husband has been making, and the amount of rent the wife is paying.
The husband has been paying the mortgage at the rate of $955.00 per fortnight (later rising to $962.00 per fortnight) since separation. I do not have a complete history of the wife’s rental payments, but she was paying $200.00 per week when she filed her financial statement in May 2009 and $250.00 per week at the time of the hearing, in contrast to the $477.00 per week (now $481.00 per week) the husband was paying in respect of the mortgage.
In my view the husband should receive some credit for his post-separation mortgage payments, although I do not consider that he is not entitled to credit for paying the rates and insurance on the home.
Another relevant post-separation matter is the husband’s financial and non-financial contribution to the care of [X].
Between April 2007 and December 2007 [X] lived with the husband in Alice Springs and the wife lived in the United States. The wife visited [X] for one week in June 2007 and [X] spent about a month with the wife in Sydney in October 2007. The wife made no financial contribution to [X]’s care when [X] was not with her.
In December 2007 the wife returned to live in Alice Springs and [X] began spending regular time with her.
After the wife returned to Australia she obtained some employment with Mr R at [workplace omitted], but she was mainly in receipt of Newstart Allowance between February 2008 and May 2009. Since May 2009 the wife has done some part time work in [workplaces omitted] but has mainly been in receipt of a Centrelink Education Allowance.
The wife did not pay child support to the husband in the post-separation period and indeed for most of 2008 and 2009 the husband, because of his income, was assessed to pay child support to the wife, although I understand that the husband has never in fact paid this child support.
The net result is that from April to December 2007 the husband provided the vast majority of financial and non financial support for [X] and during 2008 and 2009 the husband provided the majority of the financial and non-financial support for her.
A third relevant post-separation factor is that the husband’s superannuation has increased since separation. In dollar figures it has increased net $3,902.00 but given that a number of superannuation funds declined in value as a result of the global financial crisis, this amount does not accurately reflect the contributions by the husband to superannuation post separation. The husband’s employer for example paid $5,984.55 into [H] for the period between April and September 2009.
It is against this background that I must make an overall assessment of contributions.
The husband’s contributions clearly exceed the wife’s. He brought in the ICI stock (although that was quickly used up on living costs at the beginning of the relationship) and the BMW bike, the Chrysler Valiant and the [O] Superannuation which now represent a total of $22,131.00 in the pool. I accept that the parties spent some money on the car and the bike during the marriage.
The husband’s post separation contributions over a period of nearly three years, to the payment of the mortgage and to the care of [X] and his post separation contributions to his superannuation fund must also be taken into account, although it is relevant here that he retained the net proceeds of $8,000.00 from the sale of the RAV4 to the exclusion of the wife and used it to pay post-separation bills.
The asset pool is fairly small. In my view it is appropriate to assess contributions as 65% by the husband and 35% by the wife. This would entitle the husband to $131,170.45 and the wife to $70,630.25.
Section 75(2) factors
As required by s.79(4)(e) I now turn to consider the matters in
s.75(2) of the Family Law Act. Subsections 79(4)(d) and (f) have no relevance to these proceedings I have considered the issues of child support paid or not paid for [X] between separation and the date of the hearing when assessing contributions and I will consider the future child support situation in the context of s.75(2)(na).
The wife is 37. She is in good health and is currently employed as a casual part time [omitted worker]. The wife works ten hours a week and earns $200.00 gross per week. The wife is otherwise in receipt of a Centrelink Education Allowance.
The wife completed a [qualification omitted] during 2009 and intends to commence a [qualification omitted] in 2010,[6] which will take one year to complete.
[6] Wife’s affidavit filed 27 November 2009
The wife appeared confident that she would complete this diploma. She will then be able to work with organisations such as [omitted]. The wife said that she hoped to earn over $40,000.00 per annum once qualified.
The wife has few assets in her possession. I accept that the wife is not currently in a relationship.
I take into account that pursuant to orders made on 5 November 2009 the wife has the care of [X] five nights each fortnight and for half of the school holidays. This equates to almost 40% of [X]’s care per annum.
The wife is financially supporting [X] when [X] is with her. As to the child support situation, because of the comparative incomes of the parties the husband is assessed to pay child support to the wife for [X] despite the fact that [X] lives with him for the majority of the time. This situation will not change for at least twelve months, until the wife completes her studies and obtains better paid employment.
It was the wife’s case that the marriage had affected her earning capacity.
I accept that the wife ceased work in Vietnam after the marriage in December 2000 and that this was either at the request of or with the agreement of the husband. She did not work in Australia between September 2001 and September 2006 and during that period was engaged in home duties and the parenting of [X]. I accept that this was pursuant to an agreement between the parties.
I accept that the wife’s absence from the workforce between December 2000 and September 2006, and in particular her failure to obtain work in Australia after she migrated here, has affected her income earning capacity.
The wife was absent from Australia during 2007. She was initially only able to obtain unskilled work when she returned in 2008 and she did limited unskilled work between about March 2008 and May 2009. She thereafter commenced studying for a [qualification omitted] and she intends to commence a one year diploma course in 2010. I accept that she the wife needs to obtain Australian qualifications to enhance her income earning capacity in Australia.
The husband is 57. He did not claim to be suffering from any health conditions which were likely to affect his ability to work. He is employed as a [omitted] and earns $114,400.00 per annum.[7]
[7] Taken from husband’s financial statement filed 15 July 2009. Husband’s evidence at the hearing was that he earned “over $100,000.00” per annum
The husband said and I accept that he had to work hard for this money, sometimes six days a week for ten hours a day. He said that his contract would end in mid-2010. He also pointed out that he was on a casual wage and received no holiday pay, overtime or sick leave. Because of the long hours this employment entails the husband has to pay for before and after school care for [X] which he estimated cost him $335.00 per week.
I take into account that the husband is 57 and that he is working on contract but the husband has had a number of jobs of relatively short duration since he returned to Australia and he has never had any difficulty obtaining employment. His income for the last four years has ranged between $67,000.00 and $114,000.00. The husband is a manager or supervisor and there was nothing to suggest that his age or health would limit his ability to obtain employment at least until the normal retiring age of 65.
The husband will have the opportunity to retain the former matrimonial following these proceedings. He will also retain either some or all of his superannuation. I accept that the husband’s superannuation entitlements are very modest, given his age. I accept that equity in the former matrimonial home is also modest and that if the husband retains the home he may retire still owing a very substantial debt to the bank.
I take into account that the husband has a number of debts which were not included as relevant liabilities when calculating the asset pool. These are the balance of the personal loan from Circle Credit Union (about $4,700.00) the Go Credit Card debt (about $500.00) and the husband’s other credit card debt (about $3,700.00). The husband however has the income to gradually reduce these debts by regular repayments.
The husband may have another liability, in that he has been assessed to pay child support to the wife but has never in fact paid it. The wife said that she was not chasing payment from the husband, but if arrears are accruing it could be that at some time in the future action is taken against the husband to recover the arrears. Neither the husband nor the wife however provided sufficient information about this matter however for me to take it into account in a meaningful way.
I take into account that the husband has the care of [X] nine nights each fortnight and for half of the school holidays. This equates to just over 60% of the care of [X]. The husband provides the majority of [X]’s financial support. It will be at least a year before the wife is earning income which will allow her to contribute more equitably to [X]’s financial support.
I am required by s.75(2)(o) to take into account any fact or circumstance which in the opinion of the Court the justice of the case requires to be taken into account. Several matters are relevant here.
Firstly it was the wife’s case that the husband had committed waste during the marriage in that he had spent excessive amounts of money on alcohol and marijuana.
The wife alleged that the husband spent “well over $80,000.00 on alcohol and marijuana”[8] during the marriage but she provided no further detail of this claim. The husband admitted that he purchased alcohol, but denied that he purchased it in excessive quantities. He denied using marijuana.
[8] Wife’s affidavit filed 12 October 2009
There was no evidence that the husband’s purchase of alcohol during the marriage went beyond a level consistent with reasonable recreational use. As to the alleged marijuana use I have no reason to prefer the evidence of the wife to that of the husband and on the state of the evidence I cannot be satisfied on the balance of probabilities that the husband used marijuana during the marriage. Even if I could be satisfied of this, I could do little with the finding because the wife provided absolutely no evidence to support her claim about the amount allegedly spent on marijuana.
Secondly it was the husband’s case that regard should be had to the support provided to the wife’s family during the marriage, which came from his income.
It was the husband’s evidence that “soon after [Ms Neal] and I became involved together in 2000 we made a decision to support [Ms Neal]’s family.”[9] The husband said that he and the wife “took over the funding of [Ms Neal]’s sister [Ms N]’s college (until she graduated) plus financial support to her brother [Mr B]’s and [Ms Neal]’s parents. We bought her parents a motorcycle, washing machine, heater, computer/printer, paid their internet fees, a 35mm camera, digital camera etc.”
[9] Husband’s affidavit filed 15 July 2009
The husband said that he could not find all the receipts but “certainly the money to [Ms Neal]’s sister alone was well over $15,000.00.”
The wife’s evidence was that her sister finished studying in 2001, and that she and the husband had never provided financial support as such after her marriage for her family. The wife said that her brother and her parents were employed, and that gifts sent to her parents were just ordinary gifts given from time to time. The wife said that she and the husband gave her parents a camera and helped them buy a computer for example so that photographs could be exchanged between the families in different countries.
The wife said that the money provided to her sister was nothing like $15,000.00 USD but was in fact quite a modest amount.
There can be no doubt that the following money was sent to Vietnam from Australia by the parties because there were documents to establish it:
$1,000.00 in March 2002;
$2,000.00 in May 2003;
$1,000.00 in January 2004 as a wedding gift to the wife’s sister;
$2,000.00 in August 2004;
$2,000.00 in January 2005.
The wife said that it needed to be taken into account one amount was a wedding gift and that she and the husband had also sent a wedding gift of $1,000.00 to the husband’s niece during the marriage.
The husband and wife were both unemployed for much of 2001 and indeed needed to borrow money from the husband’s sister to survive, and there is no evidence to support the husband’s contention that $15,000.00 was spent during 2001 or at any other time on the support of wife’s sister while she was studying I am satisfied that total amount given to the wife’s family was likely in the vicinity of $8,000.00 plus some support in of an unquantifiable amount in 2001 for the wife’s sister while the parties were in Vietnam.
The husband acknowledged that the wife was supporting her sister at the start of the relationship and that she had an obligation to her sister. He acknowledged that he agreed at the beginning of the relationship that some support would be provided to her family. This was not a case where the wife surreptitiously removed money from the matrimonial pool. The amounts given to the wife’s family were not in the overall scheme of things excessive. In my view the fact that some support was given to the wife’s sister and that gifts in the amount identified were given to the wife’s family during the marriage does not justify an adjustment in the husband’s favour for s.75(2) factors.
It was the husband’s case that the wife ought to have more superannuation. He complained that no superannuation had been paid on her behalf in 2008/9 by Mr R.
During 2008 and 2009, the wife was in a relationship with Mr R and she also worked for him either in his business, [workplace omitted], or doing his books. It was the husband’s case that Mr R had mainly paid the wife cash in hand and because he had not properly declared her wages he had also not paid the money he sought into a superannuation fund for her.
The wife’s evidence was that she had worked only five hours per week for Mr R and she implied that if she received some additional benefits it was because of the relationship. It was the wife’s case that Mr R paid no superannuation for her because she did not earn sufficient to require him to pay superannuation. The wife produced documents showing that she earned only $612.00 from Mr R’s business in 2008 and $2,450.00 in 2009.
I cannot be satisfied on the balance of probabilities that the wife received additional taxable income from Mr R and I am not satisfied that it is open to me to find that the wife ought to have more superannuation.
In my view there is nothing in the matters considered in the context of s.75(2)(o) which would warrant an adjustment in favour of either party. The remaining issue is whether the other s.75(2) factors warrant any adjustment in favour of either party.
The factors favouring the husband are that he has the care of [X] 60% of the time and is providing the majority of financial and non-financial for her. He earns an income ranging up to the $114,000.00 per annum but he is obliged to pay for before and after school child care for [X] in order to earn his income, and he is also assessed to pay child support to the wife, and may have arrears mounting up with the child support agency.
Although he is apparently in good health the husband is 57 years of age and has limited time left to him in the workforce to acquire superannuation and other assets to help him in retirement. A continuing need for him to shoulder the major burden of supporting [X] will set him back in acquiring further assets for the future.
The factors favouring the wife are that she has the care of [X] 40% of the time and has to support [X] and herself on an income which is a fraction of the husband’s income. The wife’s earning ability has been affected by the marriage. The wife was out of the workforce for five years as a result of the marriage and needs to now gain qualifications and experience so that she can move forward in the workforce following the breakdown of the marriage. It will be at least a year before the wife obtains qualifications which will allow her to earn a reasonable income in Australia. Until the wife qualifies she will not start acquiring superannuation whereas the husband will continue to acquire it while the wife is studying.
However the wife is 37 years of age, twenty years younger than the husband, and once she qualifies will have more than two decades in the workforce to acquire further assets and superannuation before retirement.
In my view the s.75(2) factors favour the husband because of his age and the greater care he has of [X]. It will be at least a year before the wife starts contributing more equitably financially to [X]’s care. An adjustment of 5% in the husband’s favour will give him little enough bulwark against the future but I consider that this is an appropriate adjustment.
On this basis the husband would therefore be entitled to 70% of the asset pool or $141,260.49 and the wife to 30% or $60,540.21.
The proposed orders
The assets in the wife’s possession are her motor vehicle, net $5,000.00, her ring $7,200.00 and her superannuation $112.70. The wife is entitled to $48,227.51 from the husband if he retains the balance of the assets.
The wife would prefer to receive her entitlement in cash. She does not want a superannuation splitting order.
If I was minded to make an order that the wife receive her entire entitlement in cash, I would have to give consideration to whether the amount to be paid to the wife should be discounted to compensate for the fact that as the husband would by comparison be receiving a substantial proportion of his entitlement in the form of an asset not presently usable by him.
However in my view although it is not either party’s preference, an outcome whereby the wife receives part of her entitlements in cash and part by way of a superannuation splitting order is the outcome best designed to do justice and equity to both parties.
The wife currently has negligible superannuation, and an outcome whereby she receives some superannuation will benefit her in the longer term. The husband would prefer to keep his cash payment to the wife to a minimum in order not to jeopardise his ownership of the home, and this can only be achieved if he gives up some of his superannuation.
If the wife receives 30% of the real assets and 30% of the superannuation, she will be entitled to $27,548.20 in cash (as opposed to $48,227.51) and $20,679.31 superannuation from the husband.
The difficulty is that I cannot make a superannuation splitting order at present, as I do not have valuations of the superannuation funds nor has the trustee of one of the funds been given procedural fairness.
The parties are both self-represented and I intend to list the matter before me on 22 February 2010 so that I can make directions concerning the obtaining of a valuation of either the [R] or [H] Fund and so that procedural fairness can be given to the trustee of one of the funds in order to permit a splitting order to be made.
The husband wishes to retain the home and I hope that he will be able to do so but I need to make provision for the sale of the home in the event that the husband is unable to pay the wife the amount required and also to refinance the home loan.
In the event that the home must be sold, I intend to order that proceeds of sale be divided as to 30% less $2,540.00 to the wife and 70% plus $2,540.00 to the husband.
I intend to order that the proceeds of sale of the home be divided on a percentage basis because it is essential that the parties share in any selling costs and in any difference between the sale price and the valuation figure.
If an order is made for the proceeds of the sale of the home to be divided on a percentage basis however I also need to adjust for the difference in the value of the other non-superannuation assets retained by the parties.
The wife will retain real assets to the value of $12,200 and the husband will retain real assets to the value of $20,000.00. The wife is entitled to 30% of this total amount of $32,200.00 or $9,660.00. As she has $12,200.00 of real assets in her possession it is necessary to order that the wife receive 30% of the home less $2,540.00 in order to ensure that she receives only 30% of the net non-superannuation asset pool and the husband 70%.
It appears from the documents produced by the parties during the hearing that the husband is still operating bank accounts at the Commonwealth Bank and Circle Credit Union which are in joint names. I intend to make an order that the wife sign documents to transfer her interest in these joint bank accounts to the husband.
Whether the orders are just and equitable
The parties had a short marriage, but a large part of the property they now own was acquired during that marriage.
The wife made contributions during the marriage and she is entitled to a just and equitable share of the property.
I accept that it is important to the husband to keep the home as a place of stability for [X]. However the wife is entitled to her share of the property pool and I cannot reduce her payment simply in order to ensure that the husband retains the home. Regrettably if the only way the wife can obtain her entitlement is for the home to be sold then this must occur and each party, rather than just the wife, must become a renter.
The husband proposed that a ‘high percentage’ of any amount to which the wife was entitled be held in trust for [X] rather than paid to the wife. He said that he in turn intended to leave [X] the house in his will and that she was the beneficiary of his superannuation.
I do not consider that it would be reasonable to force the wife to place some of her entitlement to a property settlement into a trust fund for [X].
Parents have a duty to financially support their children, but it is not necessary for [X]’s support that a lump sum be set aside for her present use. The husband and the wife between them have the capacity to support [X] on a day to day basis from income. Parents do not have an obligation to provide their children with capital sums for use in later life.
The wife is certainly providing less financial support for [X] at present than the husband and this may continue for a time into the future, but the wife does provide some financial support for example by feeding and housing [X] during the five days a fortnight and half the school holidays that [X] spends with her. The husband is providing the greater financial support for [X] but I have taken this disparity into account when assessing s.75(2) factors.
I am satisfied that the outcome, and the orders, are just and equitable, and for all the above reasons the orders of the court will be as set out at the beginning of this judgment.
I certify that the preceding one hundred and fifty-five (155) paragraphs are a true copy of the reasons for judgment of Terry FM
Associate: Barbara Cameron
Date: 12 February 2010
0
0
1