Nicolson and Nicolson

[2016] FCCA 2329

FEDERAL CIRCUIT COURT OF AUSTRALIA

NICOLSON & NICOLSON [2016] FCCA 2329

Catchwords:
FAMILY LAW – Property – long marriage – small pool – whether the parties’ eldest daughter is owed funds.

Legislation:

Family Law Act 1975, ss.75(2), 79

Cases cited:

Stanford & Stanford (2012) 247 CLR 108

Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143

Applicant: MR NICOLSON

Respondent: MS NICOLSON

File Number: MLC 6280 of 2015

Judgment of: Judge Harland

Hearing date: 22 July 2016

Date of Last Submission: 22 July 2016

Delivered at: Melbourne

Delivered on: 7 September 2016

REPRESENTATION

Counsel for the Applicant: Ms Baczynski

Solicitors for the Applicant: Basil Nuredini Lawyers

Counsel for the Respondent: In person

ORDERS

1. That within 60 days of the date of these orders each party shall do all things and execute all documents necessary to cause the property situated at and known as Property H (“the property”) to be sold by private treaty at the earliest possible date and that the proceeds of sale be disbursed as follows and in that priority:

   (a)Discharge of all mortgages secured on title.

   (b)In payment of agents commission, advertising expenses, conveyancing adjustments and legal expenses of the sale;

   (c)In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the Victoria Division of the Australian Property Institute or his/her nominee (if any);

   (d)Payment of $100,000 to Ms Z;

   (e)The net balance then to be divided as to 60% to the wife and 40% to the husband.

2. That the husband do all acts and things to cause the caveat he lodged on the home to be removed 14 days before settlement.

3. That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)Each party be solely entitled to the exclusion of the other all other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the Husband/Wife).

4. That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to Section 106A Family Law Act that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 6280 of 2015

MR NICOLSON

Applicant

And

MS NICOLSON

Respondent

REASONS FOR JUDGMENT

1. The parties were married for 24 years. They have four adult children. Two of them are married. The youngest daughter is attending university. The youngest two children live with the wife. The parties cannot agree on how their property should be divided.  The husband sought to rely on an affidavit filed on 21 July 2016, a day before the hearing.  On 17 February 2016, I made orders listing this case for trial. I directed that the parties file and serve their trial affidavits ad supporting affidavits by 1 July 2016. The respondent who appeared without legal representation complied with that order. It would have been unfair to the respondent to allow the applicant to rely on that affidavit. It is all too common in this Court that parties attend Court for a final hearing ill-prepared even though the date is set well in advance.  I also refused an application for adjournment. The property pool in this matter is small. I do not have hearing dates before the middle of 2017. If I were to accede to that request the hearing date would have been wasted and another family would have had to wait longer. Significantly the respondent, who at all times has appeared without legal representation, complied with the trial directions.

2. The issues for determination are:

   a)The assessment of contributions by the parties;

   b)Assessment of the assessment of section 75(2) factors;

   c)Whether or not the applicant’s eldest daughter lent the parties the sum of $110,000 and whether or not all part of that amount should be repaid.

The parties’ legal and equitable interests

1. The parties own the former matrimonial home at Property H. The home is in the wife’s sole name. The husband has lodged a caveat over the property. The home is valued at $460,000. The home is the subject of a mortgage of approximately $173,000.00

2. The parties do not have any superannuation. The each have a car and some furniture.  Each party will keep any cars, furniture, chattels, bank accounts and personal belongings in their possession.

Legal principles

1. Until the High Court decision in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”), the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].

2. The High Court considered the operation of s.79 of the Family Law Act 1975 (Cth) (“the Act”) in the matter of Stanford. In this case, the majority stated at [35]-[36] that:

   It will be recalled that s 79(2) provides that [t]he 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. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

   The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.

   [Footnotes omitted]

3. The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:

   1.Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.

   2.Secondly, although s.79 gives the Court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.

   3.Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The Court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).

4. In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.

5. The High Court also pointed out that what is just and equitable is different in every case.

6. In the circumstances of this case I am satisfied that it is just and equitable to make orders adjusting the parties’ property interests.

Alleged loans

1. The wife alleges that various family members have loaned the parties money.

2. When the matter was listed for compliance checks before me on 17 June 2016, I warned the wife that if the she wished to maintain that the parties owed sums of money to third parties those parties would need to file affidavits and to be available for cross-examination at the hearing.

3. The mother says that her niece Ms A lived with them after migrating to Australia when she was 20. She was working and contributing her income to household expenses. The wife says she paid her entire wage to them. The wife says that she and her husband verbally agreed to repay her $20,000 for her financial assistance provided over the years. The husband denies this. I do not accept that such an arrangement occurred. It is not unreasonable for a family member staying with the parties who was working to contribute to the household expenses. The wife also says that they owe Mr I $10,000 and Ms N $1000.

4. The wife gives no explanation for failing to obtain affidavits from these family members. This is significant particularly given the fact that she expressly put on notice that she needed to. By failing to call these witnesses I infer that they would not have assisted her case.

5. The parties’ eldest daughter Ms Z filed an affidavit and was cross-examined. I will address her evidence later in this judgment.

Contributions

1. The husband was married previously. When the parties started living together the husband owned a 10% interest in a farm in Property L which the parties lived in. The husband later sold his interest. He says he sold it for $17,000. The wife says he sold it for $15,000. The difference is minor particularly given that the parties agree it was sold in 1991.

2. The husband also received a property settlement from his first marriage in 2005. He says he received $60,000. The wife says it was $40,000. The wife had a good recall about dates and amounts that were paid at various times including what the payments were for. Apart from an error in her affidavit which referred to February 2013 instead of 2015 which appeared to be a typographical error, her evidence was consistent and detailed.  It is consistent with the wife being the one who was responsible for managing the parties’ finances.

3. The husband was vaguer in his evidence.  In his affidavit he said they bought the Property D property in 1993. In fact it was 1997 and the wife annexed a document to her trial affidavit supporting this.  I do not find that the husband was being untruthful. Rather he is not as good as the wife at remembering dates and details. The husband says he did not know anything about their finances during or after the marriage. He says the wife would not answer his questions when he asked her about the finances. I accept that the wife primarily managed the finances. I do not accept that he knew nothing about it. I find it is more likely that he was content to let the wife manage those things.

4. He says that he did not know that his name was not on the title of the Property H property until after the proceedings were started. The wife says that the husband did not want his name on the property because he was not on good terms with his children from his first marriage at the time.

5. I find the wife to be a better historian than the husband. She was able to give detailed evidence which including dates. The husband was not able to do this. I am satisfied that the wife was responsible for managing the parties’ finances. I do not accept that the husband was excluded from this; rather he was happy to leave this to the wife.

6. The husband born in (country omitted). The husband spent considerable time overseas in (omitted) 2008 seeking to make a claim with respect to ancestral lands. The wife says he spent a year there from (omitted) 2008 after having made previous shorter trips for a few months at a time. The wife says that the husband incurred several thousand dollars in expenses during those periods.

7. The wife was entirely responsible for the care of the children and home during the periods the husband was away. The wife says that from 2007 until 2014 the husband did not contribute his pension to the family expenses but kept those funds for his own purposes. She has not provided any documents to support this claim and I am not satisfied that this is the case.

8. The husband claims that the wife wasted funds on extravagances and trips to (country omitted) to see her family and provide money to her family. The husband makes these assertions with little detail and no evidence. The wife herself refers to family trips to (country omitted) and also wedding expenses for two of the daughters. The husband also attended these weddings. Both parties spent money to see their family at various times – Both were aware of the other’s trips. I find that these were reasonable family expenses.

9. The wife’s case is that far from wasting funds the simple fact is that the parties were reliant on Centrelink benefits whilst raising four children and that there were periods of time where they did not have enough funds to make ends meet.

10. The wife says that husband would not let her work. The husband denies this. In any event the parties had four children to raise. The husband says that in addition to the disability pension he received he also did some casual work and brought in extra cash. He has not provided any documentary evidence. I am not satisfied that he did bring in any extra income to any significant degree. Rather the financial position that the parties find themselves in is consistent with the wife’s evidence that they consistently struggled to make ends meet given that both were reliant on Centrelink pensions. The funds the husband did bring in were much earlier in the relationship.

11. The wife says that post separation she drew down $8000 from the mortgage for improvements to the property including a pergola and expenses for one of their daughter’s weddings. She says the husband consented to this.

12. The wife gave detailed evidence about the party’s finances and is also able to provide detailed evidence in cross-examination including as to dates. I prefer her evidence with respect to the financial matters to the husband’s.

13. The husband is able to provide some lump-sum payments. The wife is the primary parent homemaker. The marriage is a long one. Considering the whole of the evidence I find that the parties’ contributions were equal.

Ms Z

1. Ms Z is the party’s oldest daughter. She is married with two children of her own. She is 24.

2. She and her father were in a serious car accident in January 1999 when she was seven years old. In April 2007 she received her TAC payout of $375,000. The husband received a payout of $12,000. He used part of this sum to buy a boat.

3. The money was held by the Master of the Supreme Court until she turned 18. In order to secure a release of funds from the Court the mother had to apply to the Court seeking a specific amount for a specific purpose. The husband suggested that the mother has dealt with some of these funds improperly. I do not accept that. The husband also complains that the mother has spent money extravagantly and the mortgage should not be as high as it is currently. These complaints are inconsistent with the husband’s case that he was kept entirely in the dark about financial matters and that the wife controlled it all. When she turned 18 on 3 March 2010 she received the balance of the funds held by the Supreme Court being $303,381.65.

4. On 6 April 2010 she transferred the sum of $110,000 into her parent’s bank account. $10,000 of this sum was used to pay her siblings school fees. All the children went to religious school. $100,000 went to reduce the mortgage. On 16 April 2010 she withdrew a further $6000 and gave that to the husband to send to his lawyer in (country omitted) for legal fees he has incurred there. She next documents to her affidavit to show orders from the Supreme Court releasing funds 2009 to the purchase of a car and associated expenses as well as her bank accounts showing the withdrawals.

5. Ms Z bought a house and land package for $175,000 in (omitted). She was cross examined about her bank statements. It was suggested that she could not have paid the $110,000 to her parents and for her own house. She gave evidence that as it was a house and land package with the house being constructed. She only had to make payments by instalments. She says her parents were struggling to make the mortgage payments on their house.

6. She says her father knew about the money she provided them. She says she saw them sign a joint document to deposit the $110,000 into their bank account. She says they had to do that because it was such a large sum. She says they all banked with (omitted) Bank and went to the (omitted) branch.

7. She says that she had an agreement with her parents that if they ever sold the house she would be repaid.  She says that if the property had remained with her parents she would have been content for that because they are family. She says her parents owe her $150,000 for the financial assistance she has provided.

8. In final submissions the husband’s counsel argued that given the way the family worked it was a gift. She did not put the proposition that this was a gift to Ms Z in cross-examination.

9. These funds came from Ms Z’s compensation payment. It was a significant sum to compensate for the serious injuries she sustained. She says she continues to suffer problems, particularly with her shoulders. I do not find that this was a gift. I accept Ms Z’s evidence about the arrangement she had with her parents.

10. She was a credible witness and I accept her evidence she had an agreement with her parents that she would be repaid if the property was sold. Only the sum of $100,000 was paid into the mortgage. I do not accept the husband’s evidence that he was not aware of this arrangement. Ms Z says the discussions took place at their home. Whilst I accept that Ms Z made other financial contributions, it has not been established on the evidence that it is as high as $50,000. I find that Ms Z is owed $100,000 by her parents and that she should be repaid this sum from the sale of property.

11. Both parties seek an order that property be sold, given their respective financial positions neither are in a position to afford to keep the property. Based on figures before the Court in net equity heirs $287,000. After Ms Z is repaid there is the sum of $187,000 (which will be slightly less after selling costs) to be divided between the parties in the proportion of 60% to the wife and 40% to the husband.

Section 75(2) factors

1. The husband is 76 years old. He says his health is poor. The husband was involved in an accident prior to the marriage which caused serious damage to his shoulders and knees. When the parties married he was in receipt of disability pension. He continued to receive the pension and remains reliant on pension payments for his self-support. I accept that the husband is reliant on pension for his income and is not in a position to supplement his income through paid employment.

2. The wife is 56 years old. The wife obtained a qualification in (country omitted) in 1983 with respect to (qualifications omitted). The wife did not work in paid employment during the marriage and is not currently employed. The wife also in receipt of the pension throughout the marriage and remains reliant on Centrelink benefits. The wife says that the husband did not allow her to work during the marriage. The husband disputes this. It is not necessary for me to determine that issue because the fact is that the wife has not worked in paid employment since being in Australia.

3. After separation the wife started studying for a certificate (qualifications omitted). She says she stopped studying that course because of the stress of these proceedings. Husband’s counsel suggested that she has a lot of experience in this area having raised four children and that she should be able to get employment. Being a parent does not automatically qualify the person for (omitted) work. It is also a reality that it will be a challenge for the wife to find paid employment given her age and lack of work experience. If the wife is able to find employment I find it would only be from modest amount. It is more likely on the balance of probabilities that she will remain reliant on Centrelink payments even if she is able to supplement that by a modest amount.

1. The property pool is modest. Neither party is in a position where they have capacity to improve their financial circumstances.

2. The 20 year age gap between the parties is significant. The wife will need to support herself for longer than the husband that requires an adjustment in her favour.

3. I find that the wife should receive a 10% adjustment from the proceeds of sale for s.75(2) factors. Given the small amount of property to divide between the parties this is modest adjustment.

Conclusion

1. Having considered all the evidence I am satisfied that the orders I shall make are just and equitable.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date:  7 September 2016