NEUMAN & GRIFF

FEDERAL CIRCUIT COURT OF AUSTRALIA

NEUMAN & GRIFF

[2019] FCCA 2965

Catchwords:
FAMILY LAW – Property adjustment – assessment of contributions – orders made.

Legislation:

Family Law Act 1975, ss.75, 79

Cases cited:

Weir & Weir (1992-1993) 16 Fam LR 154

Lotta & Lotta [2017] FamCA 50

Applicant:

MR NEUMAN

Respondent:

MS GRIFF

File Number:

PAC 3945 of 2018

Judgment of:

Judge Newbrun

Hearing dates:

11 and 12 September 2019

Date of Last Submission:

12 September 2019

Delivered at:

Parramatta

Delivered on:

1 November 2019

REPRESENTATION

Solicitors for the Applicant:

Mr Benetatos

The Respondent appeared in person

ORDERS

Within 56 days of the date of these orders, the Applicant (Mr Neuman) pay the Respondent (Ms Griff) $257,500 and in exchange the Respondent shall do all things necessary to transfer her right, title and interest in the property at A Street, Suburb B (hereafter referred to as ‘the A Street, Suburb B property’) to the Applicant. Contemporaneously, the Applicant shall cause the mortgage currently registered over the A Street, Suburb B property and held with Me Bank to be discharged and refinanced into his name at his expense.
If at the expiration of 56 days from the date of making these orders, the Applicant has failed to pay the Respondent $257,500 and discharge and refinance the A Street, Suburb B property, each party will do all acts and things and execute all documents necessary to place the A Street, Suburb B property for sale at a price agreed by both parties or, failing such agreement, at the average price of two recent market appraisals. Once sold the Applicant shall receive 37.5% of the net sale proceeds and the Respondent shall receive 62.5% of the net sale proceeds.
The Respondent shall retain the C Street, Suburb D property, the land at F Street, Suburb G, her motor vehicle, all funds in her retirement income account, all funds held by financial institutions held solely in her name, and 50% of the balance of the Me Bank joint account.
The Applicant shall retain his superannuation interests, his motor vehicle, all funds held by financial institutions held solely in his name and/or with any person other than the Respondent, the full amount of his redundancy payment, and 50% of the balance of the Me Bank joint account.
The Me Bank joint savings account shall then be closed.
The parties shall otherwise each be entitled to retain all other property currently held in their respective names, possession and/or control.
That in the event that either party refuses or neglects to comply with any part of these Orders in relation to the execution of any deed, instrument or document the Court appoints and authorises the Senior Registrar of the Family Court of Australia, Parramatta Registry, and/or any Registrar or Deputy Registrar thereof to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints that Registrar or Deputy Registrar to do all acts and things necessary to give validity and operation to the deed, instrument or document.
Liberty to the parties to apply to the Court on seven days’ notice in relation to the implementation of the above Orders.

IT IS NOTED that publication of this judgment under the pseudonym Neuman & Griff is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 3945 of 2018

MR NEUMAN

Applicant

And

MS GRIFF

Respondent

REASONS FOR JUDGMENT

These are Reasons for Judgement relating to property proceedings.
The wife appeared, legally unrepresented. The husband was represented by his solicitor.
In relation to property proceedings, the wife sought Orders as set out in her case outline at pages 3 and 4. The wife sought orders, inter alia, that in return for the wife transferring to the husband her interest in the parties property at A Street, Suburb B, the husband pay to her a sum representing 70% of the property’s value being $552,000. In this context, the husband would personally retain the whole mortgage liability.
The husband, on the other hand, sought Orders as set out in his case outline at pages 3 and 4, inter alia, being that the wife transfer her interest in the said property at A Street, Suburb B to the husband for no consideration. In this context, the husband would cause the mortgage over the said property to be discharged and refinanced into his name at his expense.

Evidence

The wife is aged 60 years. The husband is aged 57 years.
The wife currently lives with her mother and brother in Suburb K, NSW. The husband lives in the A Street, Suburb B property.
The parties’ relationship spanned from about the second half of 2006 to about January 2016.
At cohabitation, the wife owned, inter alia, real estate at C Street, Suburb D and F Street, Suburb G. She also had superannuation interests of about $300,000. She owned some shares and had modest savings. She owned a car. The C Street, Suburb D flat was valued at about $389,000 in … 2007 and about $62,000 was owing on the mortgage to that property at that time.
At cohabitation, the husband had $5,000 in savings, superannuation of about $30,000, and debt of about $13,000.
In about … 2007 the parties purchased the subject property at A Street, Suburb B. The purchase price was about $327,500. The title to that property reveals the wife having a 7/10 share, and the husband having a 3/10 share, as tenants-in-common.
The wife refinanced her mortgage debt on her property at C Street, Suburb D to provide a deposit for the purchase of the property at A Street, Suburb B, using $127,500 for this purpose. She paid the refinancing costs. (The refinanced mortgage debt on the C Street, Suburb D property then became, accordingly, $200,000). The wife obtained rental from this property.
The balance of the purchase price of the A Street, Suburb B property was provided by a mortgage loan for $200,000 in the names of the parties.
The wife paid all stamp duty, fees and charges for the purchase and mortgage establishment of the property at A Street, Suburb B. The husband provided about $5,000 from his savings towards the expenses of purchasing the A Street, Suburb B property.
The parties agreed to contribute equally to the mortgage repayments on the A Street, Suburb B property. It was calculated that the wife’s contribution of the deposit to the A Street, Suburb B property, being about 40% of the purchase price, plus half the mortgage repayments (60% divided by 2), resulted in a 7/10 fraction in title, while the husband’s contribution would yield a 3/10 ownership fraction. These fractions were reflected in the title to the A Street, Suburb B property.
The wife, on occasion during the relationship, experienced some mental illness and received treatment. The husband was understanding and supportive of the wife in this context, but was not otherwise involved in her treatment. Otherwise, during the parties’ relationship, each party supported the other emotionally.
During the parties’ relationship the parties, on balance, made equal contributions to homemaker tasks.
The parties married in … 2010.
Both parties worked in paid employment during the relationship; the wife as a public servant, and the husband worked as a professional.
The wife’s income in 2006, as a public servant, was about $96,000. At about this time the husband’s income was about $62,000.
During the parties’ relationship, in relation to the A Street, Suburb B property, will the wife paid council rates, water rates, electricity bills and home and contents insurance. The husband paid the gas bill, the phone bill and Internet expenses. The parties shared approximately the payment of grocery bills. The wife paid the bulk of the maintenance and renovation costs for the A Street, Suburb B property; she paid about $41,000 for the renovation costs. Otherwise, the parties contributed approximately equally to the physical maintenance of the A Street, Suburb B property.
The court finds the parties respective non-financial homemaker contributions were approximately equal during the relationship.
The wife’s income during the relationship was superior to that of the husband.
The parties established a joint savings account with the Me bank. The mortgage repayments for the A Street, Suburb B property and the C Street, Suburb D flat were taken directly from this account.
The husband, from 2007 to 2012, usually contributed about $350 per fortnight towards the A Street, Suburb B property mortgage. From 2012 he usually contributed about $750 per month towards that mortgage. However, as at separation date, the husband was in arrears in relation to his share of the mortgage repayments to a sum of about $6,000.
After the parties separated in January 2016, the husband continued to make mortgage repayments of $750 per month.
Since about mid 2016 the husband paid the council rates and building insurance premiums for the A Street, Suburb B property.
The wife contributed about $800 per fortnight into the joint savings account as well as depositing all rent from the C Street, Suburb D flat into that account. Such rental deposited averaged about $400 per week, and was paid into that account up to about September 2016. The wife contributed $800 per fortnight to the A Street, Suburb B property mortgage until about September 2016, and then $600 per month from September 2016, and then $400 per month from July 2018.
During the parties’ relationship, the wife renovated her flat at C Street, Suburb D. The husband provided some relatively modest physical assistance, and the Court accepts the wife’s evidence in this context. There is no evidence to quantify the value of such assistance. The husband provided some relatively modest physical assistance to the wife’s house in Suburb L, and again there is no evidence to quantify the value of such assistance.
The wife was emotionally unwell after the parties’ separation, but with treatment, which has continued to date, for depression and anxiety, she is reasonably well.
The wife retired from her employment in about late 2016. She assists her brother with the care of their mother. The wife intends to build a home for herself and her brother dependent upon the result of these property proceedings.
The husband’s employment was terminated in August 2019 and he received a redundancy payment of about $22,000. Since then he has had some temporary freelance work in December 2018 and a further three days work in August 2019. He has had a couple of freelance jobs which have only amounted to a few days. He has applied for over 100 jobs since 1 September 2018 without success.
Since mid-2016 the husband has been in a relationship with Ms E. She has lived with the husband in the A Street, Suburb B property since 2016. She is aged 49 years. The husband is currently dependent upon her whilst he remains unemployed. He is in reasonable health. The husband’s Financial Statement dated 21 August 2019 indicates that Ms E pays general living expenses of $467 per week for the husband’s benefit which includes an amount of about $281 per week for the mortgage loan on the A Street, Suburb B property.
At separation the A Street, Suburb B property was worth about $520,000. It had a mortgage at that time of about $165,000. The mortgage loan on that property is now about $140,000.
The husband gave oral evidence. The court does not propose to set out the entirety of his oral evidence.
The husband’s new partner can assist him with refinancing the mortgage loan over the A Street, Suburb B property. If the husband was required by the court to make a payment to the wife, and refinance such loan, in the context of the husband acquiring the wife’s interest in the property, he would have to access his superannuation when he turns 58 years on … 2020.
The wife gave oral evidence. The court does not propose to set out the entirety of her oral evidence.
The wife stated that she used the parties’ joint account to pay bills on her C Street, Suburb D flat and she also paid some of the bills for the A Street, Suburb B property from her own CBA bank account into which she paid some of her salary.

Legal principles: property

In Lotta & Lotta [2017] FamCA 50 Foster J stated:
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or defacto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties present property rights without a consideration of s 79 (4) matters.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell [1999] FamCA 1875; (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The parties agreed balance sheet was as follows:

Ownership		Description	Husband’s value	Source
ASSETS
1	J	A Street, Suburb B, NSW	$552,000	By Agreement
2	W	C Street, Suburb D, NSW	$725,000	By Agreement
3	W	F Street, Suburb G, NSW	$200,000	By Agreement
4	H	Motor vehicle	$2,000	H Financial Statement
5	W	Motor vehicle	$19,200	W Financial Statement
6	H	Bank accounts	$1,665	H Financial Statement
7	W	Bank accounts	$3,140	W Financial Statement
8	W	H Shares	$5,225	W Financial Statement
9	H	Household goods	$15,000	H Financial Statement
10	W	Household goods and period items	$10,500	W Financial Statement
Total			$1,533,730

LIABILITIES
11	J	Mortgage: A Street, Suburb B	$140,000
12	W	Mortgage: C Street, Suburb D	$140,370	W Financial Statement
13	H	Mastercard	$6,900	H Financial Statement
14	H	Private loan for legal fees	$4,000	H Financial Statement
Total			$291,270

SUPERANNUATION
Member			Name of Fund		Type of Interest			Husband’s value
15	W		J Super Fund	Eligible Annuity			$403,100		W Financial Statement
16	H		M Super Fund	Accumulation Interest			$128,416		H Financial Statement
Total		$531,516
ASSETS – LIABILITIES						$1,242,460
ASSETS - LIABILITIES + SUPER						$1,773,976

As to items 4 and 5, the parties respective motor vehicles, the evidence before the court indicates that these motor vehicles were purchased in about late 2016 (each party purchasing their own motor vehicle) and they should be taken out of the balance sheet, noting the parties’ separation in about January 2016.
As to items 13 and 14, they should be deleted from the balance sheet, as they relate to non-matrimonial indebtedness.
Accordingly, the final balance sheet should be as follows:

Ownership		Description	Husband’s value	Source
ASSETS
1	J	A Street, Suburb B, NSW	$552,000	By Agreement
2	W	C Street, Suburb D, NSW	$725,000	By Agreement
3	W	F Street, Suburb G, NSW	$200,000	By Agreement
4	H	Bank accounts	$1,665	H Financial Statement
5	W	Bank accounts	$3,140	W Financial Statement
6	W	H Shares	$5,225	W Financial Statement
7	H	Household goods	$15,000	H Financial Statement
8	W	Household goods and period items	$10,500	W Financial Statement
Total			$1,512,530

LIABILITIES
9	J	Mortgage: A Street, Suburb B	$140,000
10	W	Mortgage: C Street, Suburb D	$140,370	W Financial Statement
Total			$280,370

SUPERANNUATION
Member			Name of Fund		Type of Interest			Husband’s value
13	W		J Super Fund	Eligible Annuity			$403,100		W Financial Statement
14	H		M Super Fund	Accumulation Interest			$128,416		H Financial Statement
Total		$531,516
ASSETS – LIABILITIES						$1,232,160
ASSETS - LIABILITIES + SUPER						$1,763,676

From the above, it can be seen that the parties’ net non-superannuation assets are $1,232,160. The total of non-superannuation assets plus superannuation of the parties is $1,763,676.

Section 79 (2) of the Act

The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.

Contributions

As to the wife’s real estate at C Street, Suburb D, the court finds that the husband made no relevant quantifiable contribution to this property (whilst acknowledging the relatively modest physical assistance he provided in relation to repair and renovation of the C Street, Suburb D property) during the parties’ relationship.
The F Street, Suburb G property was purchased post separation by the wife. She had purchased this property from funds from her retirement income account. As discussed below, the court is not persuaded that either party made any relevant contribution to the other’s superannuation entitlements during their relationship. Accordingly, the Court will make no adjustment orders relating to these above properties of the wife (ie the C Street, Suburb D and F Street, Suburb G properties), nor to the parties superannuation entitlements. Accordingly, the asset pool liable to be the subject of a property adjustment order will be confined to the net value of the A Street, Suburb B property.
The parties’ relationship was for about 9.5 years.
When the A Street, Suburb B property was purchased, the wife made a significant contribution through provision of a deposit of $127,500 having refinanced the mortgage debt on her property at C Street, Suburb D. Thereafter she was effectively required to service the $127,500 amount through the refinanced mortgage loan on the C Street, Suburb D property.

The balance of the purchase price was obtained through the parties’ mortgage loan of $200,000. Thereafter, during the parties’ relationship, and up to about September 2016, the wife’s financial contributions towards the mortgage repayments for the A Street, Suburb B property were superior to those of the husband, and noting that the husband was in arrears in relation to his repayment contributions, as discussed previously. Post about September 2016, the court takes into account the husband’s superior financial contributions towards the mortgage loan on the A Street, Suburb B property, as well as rates and insurance premiums for that property.
At purchase of the A Street, Suburb B property, both parties contributed to purchase related expenses for the property; the wife paid the stamp duty, fees and charges for the purchase and mortgage establishment, and the husband contributed about $5,000.
The parties’ indirect financial contributions towards the A Street, Suburb B property during the relationship were approximately equal.
The wife made a significant contribution towards the renovation costs of the A Street, Suburb B property.
Again, the parties respective non-financial homemaker contributions were approximately equal during the relationship.
Turning to the parties’ superannuation entitlements, again, the court is not persuaded that either party made any relevant contribution to the other’s superannuation entitlements during their relationship.
At cohabitation, the wife’s superannuation entitlements were about $300,000 and as at 16 March 2016 her “net lump sum tax benefit” was some $678,000. Following certain expenditure by the wife, her present superannuation entitlements are $403,100.
At cohabitation, the husband’s superannuation entitlement was about $30,000. His present superannuation entitlement is $128,416.
There is no evidence of any relevant direct financial contributions by one party to the other party superannuation entitlements.
The court is not persuaded that either party made any relevant indirect contribution to the other’s superannuation entitlements. There were no children to this relationship. Both parties worked in paid employment during the relationship. Whilst acknowledging that each party provided the other with emotional support during the relationship, and that each party made relevant contributions towards the running of the parties’ household, both financial and otherwise, the court is not persuaded that by reason of such support and contributions, that the parties thereby enabled the other party to maintain employment and thereby accumulate superannuation entitlements.
Neither party seeks a superannuation splitting order.
The husband contended that his contributions should be assessed at 25% but in relation to all assets in the balance sheet, including the wife’s C Street, Suburb D and F Street, Suburb G properties and the parties’ superannuation interests.
The wife contended that her contributions should be assessed at 70% as at trial date, subject to the asset pool liable to be the subject of a property adjustment order being confined to the net value of the A Street, Suburb B property.
Taking into account the above matters, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ contributions to the A Street, Suburb B property as at trial date to be 70% to the wife and 30% to the husband. That results in a disparity of about $164,800 in favour of the wife.

Section 75(2)

The husband is in reasonable health.
The wife has historically experienced mental health issues, however she is presently well from that perspective, albeit that she is still being treated for depression and anxiety through medication, with the dosages of her medication having been reduced and her not requiring psychological treatment for close to 2 years. She still continues to use cognitive behavioural therapy when necessary. The wife and her brother share carer duties for their mother.
The wife has retired. She had a long career as a public servant. She is aged 60 years. Apart from her interest in the A Street, Suburb B property, she owns the C Street, Suburb D (attracting rental income) and F Street, Suburb G properties, and has a superannuation interest in the sum of about $403,100 from which she receives a regular income. She stated in submissions that she is able to support herself in her retirement by reason of her superannuation entitlements.
On the other hand, the husband, aged 57 years, has experienced significant difficulties in obtaining employment following his employment termination. The husband has a present work capacity in his particular field of work, however, and again, he is experiencing difficulties in obtaining further employment.
He is financially dependent upon his new partner who, it would appear, has relatively modest financial circumstances. He has limited financial resources, by reference to his superannuation entitlement of about $128,416. He is not able to access his superannuation until he turns 58 years. He is not presently entitled to government benefits.
The husband seeks to retain the former matrimonial home subject to its mortgage loan, and thereby maintain a reasonable standard of living. It was common ground between the parties that the minimum fortnightly repayment on the current A Street, Suburb B property mortgage loan of $140,000 is $562 per fortnight. Presently, being unemployed, his weekly expenditure significantly exceeds his stated weekly income of $20.
The husband contended (in his final oral submissions to the court) for an adjustment of 5%, thereby resulting in an adjusted contributions assessment finding of 30%, but again applying to the total property pool.
The wife, in final submissions to the court, stated she would not disagree with a 5% adjustment in favour of the husband, but again she would confine the asset pool which was liable to a property adjustment order to the A Street, Suburb B property.
Taking into account the above matters, there should be an adjustment in favour of the husband of 7.5%. This results in an adjusted contributions finding, again, relating to the net value of the A Street, Suburb B property only, of 62.5% in favour of the wife and 37.5% in favour of the husband.

Justice and equity

Pursuant to the Court’s contribution assessment, and again applying only to the net value of the A Street, Suburb B property, the husband should receive $154,500. The wife should receive $257,500. That results in a disparity of $103,000.
The husband will retain his modest motor vehicle, and household contents (noting that these did not enter the balance sheet).
Each party will retain their superannuation entitlements.
The husband will be able to access his superannuation entitlement on turning 58 years of age, subject to paying relevant taxation.
In the view of the court, it is not reasonable to delay the wife receiving $257,500 until the husband turns 58 years of age, when he can access his superannuation. The wife, the court infers, wishes to get on with her life involving caring for her mother, and building a house for herself and her brother. In this context, the Court refers to the wife’s historical mental health issues and present ingestion of medication for treatment of depression and anxiety.
The Court recognises that its proposed orders may well result in the A Street, Suburb B property having to be sold, noting that the husband wishes to remain living there. The husband should be given 8 weeks to pay the wife $257,500 in return for the transfer of the wife’s interest in the A Street, Suburb B property. Otherwise, the A Street, Suburb B property should be sold.
The Court is of the view that its proposed property adjustment Orders will represent a just and equitable property settlement between the parties.

I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Date: 1 November 2019

[2019] FCCA 2965

1 November 2019

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Jurisdiction