NORTHAM and NORTHAM

[2019] FCWA 240

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: NORTHAM and NORTHAM [2019] FCWA 240

CORAM: O'BRIEN J

HEARD: 7 & 8 OCTOBER 2019

DELIVERED : 15 NOVEMBER 2019

FILE NO/S: PTW 6804 of 2015

BETWEEN: MR NORTHAM

Applicant

AND

MS NORTHAM

Respondent

Catchwords:

PROPERTY - Long marriage - Assessment of contributions - Prospective factors - Where wife has ongoing supportive responsibilities for an adult child of the marriage who suffers from a disability - Turns on its own facts.

ADULT CHILD MAINTENANCE - Where child in question is disabled but evidence as to his earning capacity, reasonable needs, property and financial resources of the child is inadequate - Turns on its own facts.

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Mr Brooks
Respondent	:	Ms Bouwman

Solicitors:

Applicant	:	HFM Legal
Respondent	:	WL & KJ Everett

Case(s) referred to in decision(s):

C & C [1998] FamCA 143

Chorn & Hopkins (2004) FLC 93-204

Cosgrove & Cosgrove (1996) FLC 92-700

Kowaliw & Kowaliw (1981) FLC 91-092

Paul & Paul (2012) FLC 93-505

Trevi & Trevi [2018] FamCAFC 173

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Northam & Northam has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

1[Mr Northam] (“the husband”) and [Ms Northam] (“the wife”) have been unable to agree on the division of their property. They also disagree as to the needs of their adult son, [R], for whom the wife seeks payments of maintenance.

Background

2The husband was born in 1956 and is a [car salesperson]. The wife was born in 1958 and is a [community worker].

3The parties began their relationship in 1984, and lived together for a short period before they married in December 1986. They separated in November 2014 and are now divorced. There are three adult children of the marriage; R, who was born in 1993, is the youngest.

4R is autistic. He lives with the wife in the home jointly owned by the parties. He has not held any steady employment since 2013.

5The husband lives with his elderly mother in her home.

6The jointly owned home is the primary asset available for division between the parties. The wife seeks to retain it; the husband seeks its sale and a division of the proceeds.

Relief sought by the parties

7To their credit, the parties conferred as directed at the Status Hearing and filed prior to trial a Minute setting out the orders which can be made by consent. In short, it is agreed that each party should retain his or her own personal property, chattels and superannuation, and responsibility for personal liabilities. Neither party seeks a superannuation splitting order.

8The husband seeks the orders set out in a Minute filed by him prior to trial. He seeks the sale of the home on certain terms and conditions specified in that Minute. He proposes that the proceeds of sale, after discharge of the mortgage and payment of expenses associated with sale, be divided so as to achieve an overall division of the property and superannuation available for division between the parties, after taking into account all liabilities, in the proportions of 47.5 per cent to him and 52.5 per cent to the wife. He otherwise proposes that the wife’s application for adult child maintenance in relation to R be dismissed.

9The wife seeks the orders set out in a Minute filed by her prior to trial. She seeks that the husband transfer his interest in the home to her, and that contemporaneously she refinance into her sole name all loans presently secured against it. She proposes that those transactions happen within six months of orders being made. She then proposes alternative orders in the event that she is unable to refinance, such that the home would be sold and she would receive the whole of the net proceeds. Otherwise, she seeks an order that the husband pay maintenance to her for R in the sum of $450 per week, to be indexed in accordance with the consumer price index annually, for a period of six years.

Affidavits relied upon by the parties

10The husband relied on the following affidavits:

(a)his trial affidavit filed on 1 July 2019;

(b)his affidavit filed on 19 September 2019 responding to the wife’s affidavit material; and

(c)his financial statement filed on 1 July 2019.

11The wife relied on the following affidavits:

(a)her trial affidavit filed on 26 August 2019;

(b)her financial statement filed the same day;

(c)affidavit of the parties’ son, [B], filed on 26 August 2019;

(d)affidavit of her friend, [Ms L], filed on 26 August 2019; and

(e)affidavit of [Dr W] filed on 3 October 2019.

12The affidavit of Dr W was filed out of time, and without leave, after a Status Hearing at which I had made specific orders as to the affidavits upon which each party could rely at trial. Those orders, in turn, had been based on counsel’s advice at the Status Hearing that neither party sought to rely on any other affidavits.

13The explanation given for the late filing of the affidavit of Dr W was that those advising the wife had not anticipated that the husband would object to the hearsay evidence attempted to be given in the wife’s trial affidavit. Given that the threshold issue in relation to the application for adult child maintenance for R was contentious, it was, to put it mildly, surprising that the wife had not sought to adduce proper evidence in relation to that issue at a much earlier stage. The explanation given for her failure to do so was unconvincing.

14That said, while the husband initially opposed the application for leave to file Dr W’s affidavit, his counsel could not identify any prejudice to him if leave was granted, made it clear that he would not need to seek an adjournment if it was, and said further that he did not intend to require Dr W to present for the purposes of cross‑examination, thereby leaving his evidence unchallenged in any event. On being given an opportunity to take further instructions having made those submissions, counsel withdrew his opposition and the affidavit was admitted into evidence by consent.

15During cross-examination of the husband, the wife’s counsel asked whether he agreed with the observations of Dr W. The husband said that he did not. Given the earlier exchange, I considered it appropriate to stand the matter down to allow the husband’s counsel to consider whether, in those circumstances, he wished to revisit his earlier indication that Dr W was not required for cross‑examination. On reflection, counsel changed his position in that regard and arrangements were made for Dr W to present.

16B was required to present for cross-examination, and did so. Ms L was not required.

Observations as to the oral evidence at trial

17Neither party was overly impressive in giving oral evidence. Both showed an inclination to seek to argue their case rather than simply answering questions. Both clearly held strong views about the other, and those views permeated their evidence.

18The husband presented as a cautious witness, who appeared to consider the likely ramifications of each answer before giving it. That said, there was some miscommunication between him and counsel for the wife which I did not misinterpret as being reflective of evasiveness on his part.

19The wife had very firm views both as to her own contributions, and as to the attribution of blame almost exclusively to the husband for various financial decisions taken during the course of the marriage, and the negative outcomes of those decisions. She was vague in much of her evidence, although again there was some miscommunication between her and counsel for the husband which I did not attribute to any evasiveness on her part.

20As appears later in these reasons, there were gaps in the evidence which neither party filled. Some of those gaps were in relation to matters of significance, leaving the Court to do the best it can with the respective cases of the parties as presented.

21B gave his evidence by telephone, by agreement. Even allowing for the difficulties associated with assessing a witness in those circumstances, he appeared to give his evidence in a straightforward and even-handed manner. I accept his evidence.

22Dr W gave his evidence in a straightforward and professional manner. As appears below, he also readily made concessions as to his own expertise. I accept his evidence.

The law – the property case

23The Court has a wide discretion conferred by s 79(1) of the Family Law Act 1975 (Cth) (“the Act”). That discretion must be exercised in accordance with legal principle, and without assuming that the parties’ interests in assets are or should be different from those determined by common law and equity.

24The Court must be satisfied that it is just and equitable to make an order adjusting existing property interests. That requirement is readily satisfied in most cases, including this one. The parties are long separated, are now divorced, and both seek to discontinue their joint ownership of property.

25In determining what orders will be just and equitable, the Court’s power is not confined by any “steps” or “stages”. Having said that, a court will satisfy the legislative requirements if it identifies and values the assets and liabilities of the parties (to the extent the evidence permits), takes into account their respective contributions (including contributions to any assets which have ceased to be owned by them), assesses the factors in s 79(4)(d) to (g) of the Act (to the extent they are relevant), and considers whether the proposed orders are just and equitable.

26The Court is required to consider the respective contributions of the parties, both financial and non-financial, holistically over the whole period to trial. That does not lend itself (other than in an atypical case) to a strictly mathematical approach. The holistic approach to the assessment of contributions accommodates the wide range of factual scenarios dealt with by the Court.

27There is no presumption that, even over the course of a long marriage, the contributions of the parties are to be regarded as having been equal. There is no requirement for an entirely discrete consideration of the impact of particular and individual financial contributions, nor that the contributions of the parties be quantified at a particular past moment in time, whether by reference to the date of commencement of cohabitation or, for that matter, the date of separation.

28Nothing in the Act requires the Court to express in percentage terms its assessment of contributions, or its assessment of the factors in s 79(4) (d) to (g), although that is often convenient and practical. Similarly, nothing in the Act requires the Court to allocate a percentage entitlement of the property to each party.

Addbacks

29In this case, as in many others, issues arose as to the appropriate treatment of property no longer owned by the parties, but which was owned by them prior to separation. While the Court’s power is only to adjust existing interests in existing property, circumstances often arise where the disposal of property post separation must be taken into account if a just and equitable order is to be made.

30Broadly, there are two approaches which may be taken. The Court may notionally “add back” the value of disposed property, merely as an aid to calculation in determining the appropriate division of existing property. Alternatively, and without notionally adding back, the court may take the disposal of property into account pursuant to s 75(2)(o).

31Adding back is the “exception rather than the rule”.[1] Reasonably incurred expenditure does not usually come within accepted categories of addbacks.[2]

[1] C & C [1998] FamCA 143, [46].

[2] Trevi & Trevi [2018] FamCAFC 173, [29].

32As the Full Court observed in Trevi:

Two fundamental premises emerge from Omacini and the authorities preceding it. First, “adding back” is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion – usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property. [3] [citations omitted]

[3] Ibid, [30].

33Paid legal fees “occupy a particular position in the consideration of addbacks by reason of s 117(1) of the Act”.[4] Against the background of s 117(1) the Court is alert to consider notionally adding back legal fees paid from monies which would otherwise have been properly available for division between the parties, and were not generated by one party post-separation from his or her own endeavours, so as to avoid a contribution by one party to the legal fees of the other, other than by a proper application of s 117(2).[5]

The law – adult child maintenance

[4] Ibid, [36].

[5] Chorn & Hopkins (2004) FLC 93-204.

34Section 66L(1) of the Act is in the following terms:

(1)A court must not make a child maintenance order in relation to a child who is 18 or over unless the court is satisfied that the provision of the maintenance is necessary:

(a)to enable the child to complete his or her education; or

(b)because of a mental or physical disability of the child.

The court may make such a child maintenance order, in relation to a child who is 17, to take effect when or after the child turns 18.

35The applicant bears the onus of establishing that the payments of maintenance sought are “necessary”. While “necessary” does not mean “completely indispensable”, neither does it simply mean “desirable”. The applicant must establish a “base level of necessity” before the court’s discretion is enlivened. The capacity of the child to undertake employment, and the financial circumstances of the child, other than any entitlement to an income tested pension or benefit, are appropriately to be taken into account in determining that threshold question.[6]

[6] Paul & Paul (2012) FLC 93-505; see also Cosgrove & Cosgrove (1996) FLC 92-700.

36If the threshold question is answered in the affirmative, the court must then adopt the approach mandated in s 66H, and take into account the matters set out in ss 66J and 66K.

The existing interests of the parties in property and superannuation

37To their credit, the parties were able to agree the nature and value of their existing interests in property and superannuation, and the amounts of their liabilities.

38The agreed position in that regard is set out in the table which appears below.

Description	Value/amount
Joint property
Joint assets
[The Home]		$850,000
Joint liabilities
[Mortgage]		$427,879
[Bank A] Equity Access account		$148,007
Total joint liabilities		$575,886
Subtotal – joint property minus liabilities		$274,114
Husband
Husband’s assets
[Bank B Account 1]		$509
[Bank B Account 2]		$590
[Bank B Account 3]		$750
[Bank C Account]		$9,170
Furniture		$2,000
[Motor Vehicle A]		$8,000
[Motor Vehicle B]		$900
Total husband’s property		$21,919
Husband’s liabilities
Bank A MasterCard		$13,264
[Bank D] Visa account		$22,229
[Bank E Account]		$8,942
Total husband’s liabilities		$44,435
Subtotal – husband’s property minus liabilities		-($22,516)
Wife
Wife’s assets
[Bank D Account 1]		$483
[Bank D Account 2]		$24
[Bank D Account 3]		$50
Funds in solicitors trust account		$22,000
Furniture		$3,000
Jewellery		$165
[Motor Vehicle C]		$32,850
[Motor Vehicle D]		$5,585
Total wife’s property		$64,157
Wife’s liabilities
[Bank D] Flexi Loan		$1,996
[Bank D] Earth Platinum card		$1
[Bank D] Visa card		$3,283
[Bank F] credit		$4,725
Total wife’s liabilities		$10,005
Subtotal wife’s property minus liabilities		$54,152
Superannuation – husband
[Superannuation A]		$199,211
[Superannuation B]		$46,633
[Superannuation C]		$75,246
Subtotal husband’s superannuation		$321,090
Superannuation – wife
[Superannuation D]		$8,322
[Superannuation E]		$7,075
[Superannuation F]		$400,321
Subtotal wife’s superannuation		$415,718
Total property and superannuation available to the parties after deduction of all liabilities		$1,042,558

Contingent liabilities and addbacks

39The orders sought by the husband included provision for each party to “include as income in their respective tax returns 50 per cent of the capital gains income arising from the sale of [the home]”. There was no evidence from either party in relation to the issue of capital gains tax, nor for that matter any evidence to suggest that the home was not subject to the usual exemption as a principal place of residence.

40When I raised that matter with counsel I was advised that it is common ground that only a portion of the property on which the home is constructed is exempt from capital gains tax, and that on a sale of the property there will potentially be capital gains tax payable. There was no evidence to enable any estimation of what that tax liability might be.

41I can accordingly do no better than take into account the possibility of an undefined amount of capital gains tax being payable in the event that I order the sale of the home.

42Counsel for the husband submitted that the whole of the wife’s paid legal costs to date should be notionally added back, as having been paid from capital which would otherwise have been available for division between the parties. He submitted that no amount should be added back for the husband’s paid legal costs to date, asserting that those costs had been met by the husband from post-separation income.

43Counsel for the wife submitted that there should be no addbacks.

44When pressed, counsel for the husband acknowledged that there was no evidence as to the amount of legal fees paid by the wife from capital, beyond her vague acknowledgement that she had paid some of those fees from monies inherited by her very late in the relationship. There was no evidence as to the source of payments made for the husband’s legal fees.

45As I explained to counsel, if an amount is to be notionally added back for the purposes of calculations of the overall entitlements of the parties, a specific amount to be added back must be identified. The evidence simply does not permit that to be done in this case.

46In any event, given that, at best, the evidence established that some of the wife’s legal fees were paid by her from monies which she inherited very late in the relationship, it is unlikely that I would have exercised my discretion to add back any amount for the purposes of calculations, even had a precise amount been identified.

47It remains open if appropriate to consider the use of funds for the payment of legal fees pursuant to s 75(2)(o).

48Otherwise, while during the course of the trial criticisms were levelled at the husband for his actions in incurring liabilities to pursue business interests which ultimately were unsuccessful, and at the wife for her expenditure more generally, neither counsel suggested that any amount should be added back to reflect those criticisms. That was, with respect, a sensible approach. The evidence fell well short of that required to establish negligent, wanton or reckless wastage of property which would otherwise have been available for division between the parties.[7] Similarly, a proposition raised in the husband’s Papers for the Judge to the effect that the wife had caused a reduction in the value of the home by failing to maintain it properly post-separation was sensibly not pursued.

Contributions

[7] Kowaliw & Kowaliw (1981) FLC 91-092.

49At or about the time that the parties commenced their relationship, the wife purchased a property in [Suburb A] as tenants-in-common in equal shares with her sister. While there was limited evidence as to the details of that purchase, or the value of the wife’s equity (if any) in the property at the commencement of cohabitation, nothing turns on that. That is so, as it is common ground that within a relatively short timeframe the husband purchased the interest of the wife’s sister in that property for the sum of $8,000, that amount having been gifted to him by his father for that purpose. The amount paid by the husband is consistent with the wife’s estimate of her own equity in the property in any event.

50Both parties were working at the commencement of the relationship, or relatively soon thereafter. The wife worked as a social worker, and the husband worked with his father in a [business] which his father owned. The husband was paid a wage for his work, and in addition received a lump sum of $69,000 from his father in either 1986 or 1987 on the sale of the business.

51After the parties’ first child, B, was born, the husband took 12 months off work. On his case, he did so to care for B. On the wife’s case, he did so because he could not find paid employment, and his father had not yet established a second business. Again, in the context of the required holistic assessment of the parties’ contributions over the entire period since the commencement of their relationship, nothing turns on the factual dispute between the parties in that regard. That is particularly so given the receipt by the husband of what was at the time a significant lump sum at or shortly prior to the time at which he ceased work.

52Both parties continued work thereafter. On the husband’s case, he received a further lump sum payment from his father in 1990 for work done in relation to a new business. Neither party could recall the amount received.

53The parties sold the Suburb A property in 1994, and applied the proceeds towards the purchase of the home. For a period of time prior to the sale of the Suburb A property, they had lived rent-free at a home owned by the wife’s sister, who had moved overseas for work, and were able to derive rental income from the Suburb A property.

54The wife did not work outside the home for a period prior to and after R’s birth. The husband worked full-time [in his father’s business] from about 1992 until 1997. The wife continued to work as a social worker, and the parties were able to take advantage of salary sacrifice options available to her in that employment to put the children through private schools.

55After leaving his employment in his father’s business, the husband joined a [car sales business] as an employee, being paid on a commission-only basis. At about that time, the parties began what was to become a pattern of borrowing against the equity in the home. The funds borrowed were used to purchase a motor vehicle and otherwise to supplement the family finances, given that the husband was only commencing his car sales career. For a period when she was entitled to long service leave from her social worker job, the wife also worked as a [car salesperson].

56In or about 1998, the wife received a lump sum payment on leaving her employment with the [Company A], in an amount of approximately $36,000. She subsequently continued to work for a social work agency. In early 2000, she sustained a [injury] at work and subsequently received approximately $32,000 in workers compensation. On her recollection, she applied that money to the reduction of the debt secured against the home.

57The wife subsequently retrained [as a] community [worker], and began work for [Company B] in October 2000. She continues to be employed by Company B as a community worker, and has also held second jobs, initially at [Company C] and more recently at [Company D].

58The husband started a new car sales business in late-2002 or early­-2003. The parties borrowed $100,000 against the home at that time; of that amount, $60,000 was invested in the business and the balance was applied to pay off credit cards or personal loans. The husband worked full-time in the business, but conflict with his partner led him to sell his interest in January 2004 for $45,000. On the husband’s evidence, which I accept, part of those proceeds were applied towards debt reduction and the balance towards the establishment of another new car sales business.

59In or about May 2006, the parties refinanced again, borrowing further sums against the home. Some of the borrowings were applied to reduction of credit card and similar debt, and some towards the husband’s business.

60Both parties continued to work. It is common ground that they both worked hard, often six or seven days per week.

61In 2011, the parties again refinanced. They had by that stage accumulated significant unsecured liabilities, including personal loans, credit card debt, and loans taken to purchase motor vehicles for the adult children. The various unsecured debts, and the debts already secured against the home, were consolidated into a total secured borrowing of approximately $650,000.

62Relevantly in the context of the wife’s assertions as to the level of her earnings as compared to those of the husband, the jointly executed loan enquiry presented by the parties to the bank in July 2011 declared that the husband had a gross income of $132,357 per annum, and that the wife had a gross income of $136,820 per annum.

63The wife’s mother died in [early] 2011. There was subsequently a dispute between the wife and her brother about the estate. That dispute was resolved, and in April 2013 the wife received the sum of $330,000. At her direction, those funds were placed into an account to which the husband did not have access.

64On the wife’s evidence, which was not challenged, she applied part of the money received to the purchase of a motor vehicle which she still owns. She professed uncertainty as to the amount paid for the car; on the husband’s evidence, the purchase price was approximately $85,000. A further significant sum, which neither party quantified, was applied to a trip to Europe taken by the wife, the adult children and their partners, and the parties’ grandson. A component of the expenditure for that trip was incurred prior to the parties separating, but the trip itself took place after separation. The wife was critical of the husband because expenditure was incurred on the premise that he would participate in the trip, and he then did not do so. That criticism was misplaced not simply because the separation of the parties intervened, but because by the time the trip took place the wife had obtained an interim violence restraining order against the husband.

65On the wife’s evidence, the balance of the money received from her brother was applied to pay off a credit card debt of about $30,000, to effect some unspecified home improvements, and to pay for day-to-day expenses for herself and R. As already noted, she suggested in her evidence that she used some of the money to fund legal fees; elsewhere, she suggested that she drew down on superannuation to fund legal fees. She maintained in any event that none of the funds received from her brother remain.

66The additional financial contribution made by the wife by virtue of the receipt of money from her brother must be considered in that context. While she received $330,000 relatively late in the marriage, the evidence does not support a conclusion that the value of the property presently available for division between the parties has been increased as a result, other than by the purchase of Motor Vehicle C and the reduction of debt by about $30,000. It must be borne in mind that s 79(4)(a) requires the consideration of financial contributions “to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property”. The limited direct contributions from the inherited monies were as already noted; there was no evidence to suggest an indirect contribution by the release of funds which would otherwise have had to be applied to debt or similar. That said, the funding by the wife of the expensive family holiday may potentially be taken into account in considering the respective contributions of the parties to the welfare of the family.

67Since separation, both parties have continued to work. They have each contributed roughly equally to the required repayments on the debts secured against the home, in circumstances where the wife has continued to occupy the home with R to the exclusion of the husband. While I accept that in the period since separation the wife has undertaken some maintenance and similar work around the home, and paid outgoings in relation to it, her contributions in that regard must be viewed in that context.

68It was suggested by the wife that the value of the property now available for division between the parties has been reduced by virtue of the increased liabilities taken on in the various acts of refinancing over the course of the marriage. While the wife is correct in that observation, her attribution of sole responsibility for that circumstance to the husband is misplaced. It is clear on the evidence that the wife was a participant in the decisions made to refinance. I reject any suggestion that her will was in any way overborne by the husband. The evidence similarly does not support her initial proposition that the refinancing was undertaken solely or even primarily to fund subsequently unsuccessful business ventures by the husband; as emerged clearly in cross-examination, funds sourced by refinancing were used by the parties for a variety of other purposes including holidays, the purchase of motor vehicles for the children, and reduction of credit card debt.

69The parties were in dispute in relation to their respective indirect financial contributions, and their contributions to the welfare of the family including as a homemaker or parent. As already noted, both parties worked long hours throughout the marriage other than when on leave or between jobs. They had the assistance of a nanny at various times when the children were young, and there was a period when B was very young where the husband was at home while the wife worked full-time. While I accept the evidence of B as to his recollection that the wife was somewhat more involved with the children’s activities than the husband, nothing turns on that, nor on his even-handed evidence as to the various tasks undertaken by the parties in the home.

70The conclusion that over the course of this long marriage the overall contributions of the parties should be assessed as being equal would be readily reached, were it not for two factors.

71The first of those factors is the additional financial contribution made from the funds received by the wife from her brother. Bearing in mind the value of Motor Vehicle C, the reduction of debt referred to above, the application of funds to a family holiday, and the source and timing of the funds which were applied, that contribution must affect the overall assessment.

72The second factor is the ongoing contribution by the wife to the welfare of the family post separation and to the date of trial. I accept that she provides a high level of care and support for R, in circumstances where by virtue of his disability he requires support. It was common ground that the husband’s relationship with R has entirely broken down, and that they have had nothing to do with each other since separation. Contributions of the nature described in s 79(4)(c) do not cease to be relevant simply because some of them are made after children reach the age of 18 years.

73I conclude therefore that the wife’s contributions overall were greater than those of the husband. Doing the best that I can on the evidence as presented, I assess those contributions in the proportions of 55 per cent to the wife and 45 per cent to the husband. I am satisfied that the 10 per cent differential reflected in that assessment is appropriate, both in percentage terms and in dollar terms when viewed against the value of the property available for division.

Matters requiring consideration pursuant to s 79(4)(d) to (g) inclusive.

74It is not suggested by either party that any proposed order would have an effect on their earning capacity. There is no child of the marriage under the age of 18. There are no other relevant orders affecting either party or a child of the marriage as, for the reasons set out later in this judgment, I do not propose to make an order for adult child maintenance.

75The husband is aged 62 and says that he is in reasonable health. He remains employed full-time, earning approximately $97,000 per annum.

76The wife is aged 61. She too continues to work full-time, earning approximately $121,000 per annum. While she gave evidence as to various health issues, in the context of her application for adult child maintenance she expressed her intention to continue working for another six years. There was not, in any event, any persuasive evidence that her health issues will adversely affect her earning capacity before retirement age.

77Both parties are eligible to take advantage of transition to retirement provisions in relation to their superannuation. The wife is already doing so.

78Both parties have relatively modest commitments to support themselves, other than servicing debt. Both live modestly. While they have incurred various somewhat extravagant expenses over the years, particularly in terms of travel, they have generally enjoyed a comfortably modest standard of living and it is reasonable that they should continue to do so to the extent possible.

79It is not suggested that either party would undertake further education or training such as to enhance their broader earning capacity, although the wife has ongoing professional development requirements associated with her work. Neither party is presently eligible for any relevant pension allowance or benefit. It is not suggested that any proposed order would affect the ability of any creditor to recover its debt; the wife gave evidence that she has “preapproval” from a bank to refinance the various secured liabilities, although as I noted to her counsel the absence from evidence of the financial information provided by her to the bank diminishes the weight to be attributed to that evidence, particularly when considered against her claimed expenses in her financial statement.

80Both parties have contributed to the income, earning capacity, property and financial resources of the other. The duration of the marriage has not affected either party’s earning capacity.

81The husband is cohabiting with his elderly mother. He does not pay rent, but meets various expenses. There was otherwise no evidence as to the financial circumstances relating to that cohabitation.

82The wife is cohabiting with R. On her evidence, she pays “all of [his] expenses other than his fuel and any other items [he] purchases with his pension income.” She does not “ask [R] for any financial contributions by way of ‘board’ or the like”, saying that he “mostly pays for his fuel and pays for some food, but otherwise he saves the funds he has received from [his benefits]”.

83It was submitted on behalf of the wife that the Court should take into account, as a financial resource available to the husband, any inheritance he might receive on the death of his mother. The evidence established that the husband’s mother is 90 years of age, and owns an unencumbered home. The husband said that he does not know the contents of his mother’s will, but acknowledged that he would expect to be a beneficiary of it. Otherwise, there was simply no evidence as to the extent of the likely estate of the husband’s mother, her state of health beyond some fairly general observations, or the terms of her will and who, other than the husband, might be a beneficiary of it. In those circumstances, no weight can be given to the submission made.

84I accept that the wife has an ongoing responsibility to provide support for R. As already noted, I do not propose to make an order for adult child maintenance; accordingly, the wife will bear that responsibility without assistance from the husband. That said, the burden on the wife of that responsibility is to a certain degree a matter of her choice; the fact that, for example, she has chosen to never seek any payment from R in the form of board or similar when he has the capacity to make such payments should not indirectly impact on an assessment of the husband’s proper entitlements.

85I have taken into account also the application by the wife of at least some funds from her superannuation and/or her inheritance towards legal fees, in circumstances where those funds might otherwise have been available to the parties either for other purposes or for division.

86Taking all those matters into account, I conclude that a modest adjustment in favour of the wife to what would otherwise be her contributions based entitlements is appropriate. I quantify that adjustment at 5 per cent.

87Accordingly, I propose to make orders whereby the interests of the parties in property are divided in the proportions of 60 per cent to the wife and 40 per cent to the husband.

The application for adult child maintenance

88R is 26 years old. He has been diagnosed with [a number of disabilities]. I accept the evidence of the wife that he has short term memory issues, and specific learning difficulties.

89R continued in secondary schooling until the end of year 12, but achieved academic outcomes reflective of his difficulties. With the assistance of an agency, he secured a six-month trial working at [a fast food chain]. Subsequently, he enrolled in a [plumbing] course at TAFE and then commenced work at a [plumbing company]. The wife’s evidence did not indicate whether R completed his TAFE course, or for how long he maintained his employment at the plumbing company. That employment was terminated by the employer in May 2012 after R made a significant error at work.

90R subsequently obtained a further job, commencing in February 2013 until his employment was terminated in November 2013. He has not held paid employment since then.

91R has achieved a certificate qualification in [community work], and completed the necessary practical requirements. On the wife’s evidence, she had hoped that he would be offered a job with her employer; he was not. R has subsequently applied for numerous employment positions, but apart from specific reference to an application to [DFES Fire and Rescue Service], the wife’s evidence did not descend into specifics.

92Since ceasing employment, R has received a Newstart allowance. Until recently, his continuing receipt of that allowance was dependent upon him regularly applying for jobs; that requirement has most recently been waived, as R is being assessed as to his eligibility for a disability pension. At the time of trial, that assessment had not been completed.

93R is also entitled to support under a plan approved pursuant to the National Disability Insurance Scheme (“NDIS”). The present value of that support is $31,855 per annum.

94R’s entitlements to Newstart allowance or a disability pension are income tested. His entitlements under the NDIS are not.

95I have no difficulty in concluding that R has a relevant mental or physical disability. I accept also that his disability impacts on the options available to him in terms of employment, and his competitiveness in an open job market.

96There are, however, nevertheless significant difficulties associated with the wife’s application for an order for the payment of periodic adult child maintenance by the husband for a period of six years.

97The first difficulty is the paucity of evidence in relation to R’s current work capacity. Under cross-examination, Dr W made the following frank acknowledgement:

[His Honour]: I think, Dr W, counsel might be at cross-purposes because what I understood you to say was that you would rely on others to make the diagnosis of him being – having [a disability]-

[Dr W]: That is correct

[His Honour]: - and wouldn’t consider yourself to be qualified to administer the tests that were administered by [Dr C], or to interpret them

[Dr W]: That’s correct

[His Honour]: And, the test that you’re referring to there is the report that she produced when he was aged 15 years and 7 months old

[Dr W]: Yes

[His Honour]: And I think what’s happening in the conversation is a bit of conflation between the view that you’ve expressed that I’ve just summarised and the question of whether you’re appropriately placed to assess his capacity to for work.

[Dr W]: His current work capacity

[His Honour]: Yes.

[Dr W]: That’s my opinion, I haven’t made an assessment of his current work capacity, he would have to go through another re-assessment by someone better qualified than I. (emphasis added)

98I accordingly have no evidence as to R’s work prospects, other than to note the evidence about his difficulty in securing employment over the last several years, and the matters already referred to. While the wife would attribute R’s failure to succeed in his job applications exclusively to his disability, there was simply no evidence given to enable any objective assessment of that.

99Self-evidently, the paucity of evidence impacts upon my ability to consider the financial support necessary for R’s maintenance while taking into account his earning capacity.[8]

[8] Family Law Act 1975 (Cth), s66H, s66J(1)(c).

100Further, the NDIS plan in evidence notes that R is to be supported in his job search activities, and in the completion of further education and training including a specified TAFE certificate in [fitness], with a short term goal of obtaining paid employment after developing a career pathway. The question of whether that short term goal is likely to be achievable was simply not addressed in evidence.

101Secondly, the NDIS funding available to R is appropriately characterised as a financial resource to be considered pursuant to s 66J(1)(c) in taking into account his proper needs for the purpose of considering the financial support necessary for his maintenance.

102There was no evidence as to the use to which R’s NDIS approved funding will be put, beyond the generic descriptions in the approval correspondence which was in evidence. That document showed that R has an approved budget of $20,231 to be used “to assist with daily activities and community participation”, and which may be “used flexibly” and support “to explore and participate in community based activities of interest and to develop, build and maintain friendships.” He has approved funding of an additional $3,567 per annum to be paid in fortnightly instalments into his nominated bank account, $6,878 per annum for support “by a team of allied health professionals to inform outcomes in regards to his goals and aspirations for his life” and $1,178 per annum for support coordination. While most of the funding approved will not be simply in the form of cash able to be spent by R at his discretion, the resource it represents is nevertheless significant.

103The third difficulty is that while there is evidence as to R’s income (noting that his entitlement to income tested pensions or benefits is to be disregarded), there is no evidence before the court as to his property and any financial resources other than the NDIS funding. That omission is significant in circumstances where on the wife’s case she has met virtually all of R’s expenses since before the parties separated, consciously enabling him to accumulate savings from any income he has received. While I do not doubt her expressed motive of ensuring that R would have available to him significant accumulated savings to draw on once she is no longer able to provide him with support, it was incumbent on her to ensure that evidence as to his property and financial resources was available to the court and able to be considered.

104Notwithstanding the wife’s evidence as to R’s weekly expenses, met by her on his behalf, I am simply unable to make the required findings as to the financial support necessary for his maintenance. That alone would be fatal to the wife’s application.

105Even were that not the case, a further difficulty arises in the determination of any financial contribution to R’s maintenance that should be made by the husband. Simply put, the evidence does not support a conclusion that the husband has the relevant capacity to pay. While the wife argued that, following the making of orders for alteration of property interests, the husband will be relieved of his current payments towards the debt secured by mortgage against the home, on his largely unchallenged evidence he will even then have expenses which exceed his income. While his expenses in the form of credit card payments will likely be reduced or even eliminated in the short term by a sensible application of monies received from the division of property, it must nevertheless be borne in mind that he is presently (he would say by necessity) living rent-free with his elderly mother. His likely ongoing necessary commitments to support himself must be considered against that background.

106Given those conclusions, it is unnecessary to consider whether R’s complete estrangement from the husband (exemplified by his decision to block the husband from contacting him on his mobile phone) amounts to a special circumstance which, if not taken into account, would result in injustice or undue hardship to the husband.[9]

[9] Ibid, s 66K(1)(e); see also Everett & Everett (2014) FLC 93-604.

107The application for adult child maintenance will be dismissed.

Conclusion and form of orders – property

108As earlier noted, prior to trial the parties confirmed that orders could be made by consent whereby each would retain their bank accounts, superannuation and chattels, and each would retain responsibility for their own liabilities (including any capital gains tax that might be payable by either of them if the home is sold.)

109On that basis, and on the agreed value of the home, the amount payable by the wife to the husband to achieve the division which I have determined to be appropriate is $118,449.

110During closing submissions, I made it clear to counsel for the wife that I would intend to leave open to the wife the possibility of retaining the home as she seeks, provided the payment I determined to be appropriate can be made. I propose to afford the wife a reasonable opportunity to explore that possibility, unless I am told on the delivery of these reasons that the wife concedes that she cannot do so. In the absence of any evidence on point, I can do no better than to determine that a period of 60 days will afford the wife the desired reasonable opportunity to raise finance.

111I propose further to make orders which would require the sale of the home if, within that reasonable timeframe, the wife is unable to arrange finance to pay the required amount to the husband. In the event that the home is to be sold, I consider it appropriate to include a “rise and fall” clause to acknowledge the possibility that a sale might not be achieved at the agreed value, and avoid any unfairness to either party from such an outcome.

112In his Minute of orders sought at trial, the husband proposed particular methods by which the home should be sold, including the engagement of an auctioneer at the outset. No evidence was adduced by either party as to the most appropriate method of sale for the home. I am not, therefore, prepared to prescribe a particular method. As is usual, the parties will have liberty to apply in the event of any disagreement as to the method, terms or conditions of sale.

113Subject to any submissions as to form, or any contrary agreement between the parties, I propose to make the following orders:

1.Within 60 days, the wife pay to the husband the sum of $118,449.

2.Contemporaneously with that payment:

(a)the wife do all things necessary to secure the discharge of all encumbrances on the [home] and the release of the husband from all liabilities secured against the home; and

(b)the husband transfer to the wife all his right title and interest in the home.

3.In the event that the wife does not comply with her obligations pursuant to paragraphs 1 and 2 of these orders, then within 14 days after that non-compliance the parties do all things necessary to place the home on the market for sale, and thereafter sell it.

4.In that event, the parties do all things necessary to disburse the proceeds of sale of the home in the following order and priority:

(a)in payment of agents fees, commissions and expenses associated with sale;

(b)in payment of any outstanding rates and taxes;

(c)in payment of all amounts necessary to secure the discharge of mortgages encumbering the home;

(d)in payment of the sum of $118,449 to the husband; and

(e)in payment of the balance then remaining to the wife.

5.The amount payable to the husband pursuant to the order contained in paragraph 4(d):

(a)be reduced by 60 per cent of any amount by which the sale price (before deduction of any expenses or disbursement of any proceeds) falls short of the sum of $850,000; and

(b)be increased by 40 per cent of any amount by which the sale price (before deduction of any expenses or disbursement of any proceeds) exceeds the sum of $850,000.

6.The parties have liberty to apply in relation to the method of sale of the home, and the terms and conditions of sale.

7.The wife’s interest in the following, if any, vest in the husband:

(a)all bank accounts in the husband’s sole name;

(b)all superannuation in the husband’s sole name;

(c)[Motor Vehicle A]; and

(d)all chattels in the possession of the husband at the date these orders are signed

and the husband shall indemnify the wife and keep her indemnified from all liabilities in respect of the assets referred to in this clause.

8.The husband’s estate and interest in the following, if any, vest in the wife:

(a)all bank accounts in the wife’s sole name;

(b)all superannuation in the wife’s sole name;

(c)[Motor Vehicle C];

(d)[Motor Vehicle D]; and

(e)all chattels in the possession of the wife at the date these orders are signed

and the wife shall indemnify the husband and keep him indemnified from all liabilities in respect of the assets referred to in this clause.

9.The husband shall indemnify and keep the wife indemnified in relation to his outstanding liabilities including capital gains tax, income tax liabilities whether past, present or future, his credit card liabilities and any personal loans owed by the husband.

10.The wife shall indemnify and keep the husband indemnified in relation to her outstanding liabilities including capital gains tax, income tax liabilities whether past, present or future, her credit card liabilities and any personal loans owed by the wife.

11.The parties each execute all such documents and do all such things as are reasonably necessary to give effect to these orders.

12.All outstanding applications and responses other than as to costs be and are hereby dismissed.

13.All documents produced by named persons pursuant to subpoena be returned or destroyed in accordance with the request from the named person on the expiration of 42 days from this order.

14In relation to material tendered as an exhibit into evidence in these proceedings:

(a)all parties must collect the exhibits tendered by them (“their exhibits”), from the Chambers of Justice O’Brien, at least 28 days, and no later than 42 days, from the date hereof;

(b)all parties must contact the Chambers of Justice O’Brien to arrange the collection of their exhibits; and

(c)in default of compliance with subparagraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the court without notice to the parties.

15.In the event of an appeal being lodged prior to the expiration period of 42 days, paragraphs 13 and 14 above do not apply.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

KM
Associate

15 NOVEMBER 2019