O and O - [2002] FMCAfam 117

FEDERAL MAGISTRATES COURT OF AUSTRALIA

O & O

[2002] FMCAfam 117

FAMILY LAW – Property settlement – ss. 79 and 75 of Family Law Act 1975 – long marriage – allegations of violence and abuse.

Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; Clauson (1995) FLC 92-595; Russell v Russell (1999) FLC 92-877; Kennon v Kennon (1997) FLC ¶92-757; Williams and Williams (1985) FLC ¶91-628

Applicant:

H L O

Respondent:

D M O

File No:

HBM2907 of 2001

Delivered on:

15 May 2002

Delivered at:

Devonport

Hearing Date:

24 April 2002

Judgment of:

Roberts FM

REPRESENTATION

Counsel for the Applicant:

Mr. M. Dickinson

Solicitors for the Applicant:

Bartletts
DX 70239
BURNIE TAS

Counsel for the Respondent:

Mr. P. McVeity

Solicitors for the Respondent:

McVeity & Associates
DX 70505
ULVERSTONE TAS

ORDERS

That within sixty days of the date of these Orders D M O (“the Husband”) do pay to H L O (“the Wife”) the sum of one hundred and forty two thousand dollars ($142,000.00).
That contemporaneously with the payment of the said sum of $142,000.00 the Wife do transfer to the Husband all her right, title and interest (if any) in the following:
(a)the former matrimonial home situated at 66 O R, W in Tasmania and comprised and described in Certificate of Title Volume 199963 Folio 1;
(b)the BMW motor vehicle registered number …………
(c)the boat, trailer and accessories currently in the Husband’s possession or control
(d)the assets and goodwill of the Husband’s plumbing business known as “O’s Gas & Plumbing”.
That the Husband do pay and indemnify the Wife against payment of any liability whatsoever relating to the Husband’s plumbing business.
That the Husband take the transfer of the said former matrimonial home subject to Mortgage A813295 to the Australia & New Zealand Banking Group Limited and do indemnify the Wife from any payment due under that mortgage.
That each party be otherwise solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders and that for that purpose bank accounts are deemed to be in the possession of the party whose name appears on the bank’s records thereof and insurance policies are deemed to be in the possession of the beneficiary thereof.
That each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
That the matter be otherwise removed from the Active Pending Cases list.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
DEVONPORT

HBM2907 of 2001

H L O

Applicant

And

D M O

Respondent

REASONS FOR JUDGMENT

Background and history

The Applicant H L O (“the Wife”) and the Respondent D M O (“the Husband”) were married on 3 November 1967. They had commenced cohabitation late the previous year. They separated in mid-June 1997. Consequently, the cohabitation period slightly exceeds thirty years.
The parties had five children of the marriage. All are now over the age of eighteen years. However, the youngest was only fourteen years old when the parties separated. She moved with her mother from Tasmania to New South Wales at the time of separation and was entirely dependent upon the Wife for her support, although the Husband contributed to that support by paying child support for thirty months at the rate of $280.00 per month. In addition, the Husband paid further sums to the Wife for her support.
All five children are now financially independent of the parties.
Prior to their marriage, the parties moved from Tasmania to New Zealand and they were married in New Zealand. Their first child was born in July 1967 and the Wife left her employment two months prior to his birth and did not work in paid employment at all for the next thirty years.
The parties married shortly after the birth of their first child and they returned to Tasmania in April 1968. Within a short period the Husband obtained work as a plumber for a mining company and they occupied a company house for approximately three years.
In or about 1971 the parties purchased their first home with the assistance of a housing loan.
In or about August 1982 they moved to another home, that is still occupied by the Husband. The housing loan in relation to that property was paid off during the period of cohabitation. However, a loan to purchase a BMW motor vehicle was subsequently secured over the title to that property at 66 O R, W in Tasmania (“the former matrimonial home”).
The Husband had set up his own plumbing business in or about 1976. That business was operated in partnership with the Wife until that partnership was dissolved shortly after separation.
Throughout almost the entirety of the marriage, the Wife was heavily involved with the Jehovah’s Witnesses. The Husband was similarly involved with that religious organisation until approximately seven years ago. The children were also heavily involved as Jehovah’s Witnesses and the clear evidence is that as a family, they all participated for up to a number of hours at a time on at least four days per week.
The Wife is still involved with that religious organisation, as are some of the children. However, the Husband and some of the children are no longer involved.
The Husband continues to operate the plumbing business as a sole trader.
It is clear from the evidence, that the parties adopted “traditional” roles in relation to the marriage. The Husband was exclusively responsible for earning the income and the Wife was almost exclusively responsible for running the household.

Applications

The Wife filed an Application for a property settlement in the Family Court of Australia on 10 November 2000. The Husband’s Response was filed on 14 February 2001. The proceedings were transferred to this Court on 28 August 2001.
The Wife filed an Amended Application on 14 February 2002. In that Application, she seeks a payment to her in the sum of $200,000.00 in return for a transfer to the Husband of the former matrimonial home, the BMW, a boat and trailer and the assets and goodwill of the plumbing business.
The Husband’s Response (which predates the Amended Application) seeks essentially similar orders except that the Husband seeks that there be a payment to the Wife of $55,000.00 rather than $200,000.00.

The law

The Court’s approach to the determination of an application for the adjustment of property interests has been well established by authority. See Lee Steere and Lee Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335 and Clauson (1995) FLC 92-595. It is essentially a three-step process: firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing; secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c) and thirdly, evaluating the matters contained in section 75(2) if they are relevant.
In determining what Order the Court should make under section 79, the Court must also be satisfied that it is just and equitable in all the circumstances to do so – see section 79(2) and Russell v Russell (1999) FLC 92-877.

Evidence

Both parties filed a trial affidavit and a financial statement (Form 17) and each party gave evidence and was cross-examined.
In addition, a valuer had sworn an affidavit and was also cross-examined briefly by telephone.

Credit

I must say at this stage that, where there is a difference on the evidence between the Wife’s version and the Husband’s version of events, I generally prefer the evidence of the Husband.
It is quite clear to me that the Wife has exaggerated significantly at times and has deliberately omitted to mention matters in her affidavit material when it has not suited her case. Further, she was obviously loathe to make any admissions in cross-examination that did not suit her case.
This was highlighted particularly by the fact that she did not mention her involvement with the Jehovah’s Witnesses or that of her husband and the family. When cross-examined about that, she attempted to reduce the Husband’s involvement to that of a virtual chauffeur by begrudgingly admitting his involvement to only “He drove us there”.
Further, I find that the Wife has deliberately and substantially exaggerated about abusive and negative behaviour which she attributes to the Husband.
On the other hand, I found the Husband to be more open and honest, particularly in cross-examination, in relation to these matters. For example, he admitted quite freely that he was a hard disciplinarian in relation to the children and that he and his Wife quite regularly had arguments, during which they would yell and scream at each other. I accept his evidence that he did not ever strike his Wife, but he did admit to grabbing her by the throat and to grabbing her arms during some such disagreements.
The Husband was far more willing than the Wife to give evidence that was not in his interests.
I shall deal with the Wife’s allegations against the Husband of violence and abuse later in this Judgment.

Property, liabilities and financial resources

To a substantial degree, there was agreement between the parties in relation to these matters. I shall therefore deal firstly with those matters that are not agreed between the parties.
The former matrimonial home was valued by two valuers at $130,000.00 and $126,000.00. The valuer who gave the higher valuation was the valuer who swore an affidavit and was cross-examined. During his cross-examination, it became clear that he now employs the other valuer (although he did not at the time that the valuations were conducted), and he respects the opinion of that other valuer. His exact evidence was that both valuations are “equally valid”.
After he made that statement, I asked him whether there was any reason why I should simply not average the two valuations. He accepted that as a valid approach and that is exactly what I will do. Consequently, I find that the former matrimonial home has a value of $128,000.00.
I should note, as an aside, that the valuations were conducted in 1999 and it is now 2002. However, neither party sought to make any reference to that passage of time so I must accept that the two valuation reports are still applicable.
The Husband has two Building Society accounts which bear the same account number but with a different suffix. The account with the suffix “I7” had a balance of $75,803.00 on 12 February 2002 and the account with the suffix “S20” had a balance of $24,582.00 on 12 February 2002.
The “I7” account was created after separation and the Husband’s evidence is that when an agreement was reached at a Conciliation Conference in the Family Court of Australia, he began to make arrangements to find sufficient funds to pay the Wife the sum that had been agreed. He redeemed his membership of an A.N.Z. Superannuation Fund and placed the funds received in the sum of $36,636.59 in the Building Society account. It is his evidence that all of that superannuation was accumulated after separation and that he has supplemented it with further savings accumulated after separation so that the total now exceeds $75,000.00.
It is his view, put through his counsel, that that sum should not come into account. I cannot agree. It is quite clear from the authorities that the property of the parties at the time of the hearing is what should be taken into account when the Court makes a determination of how to adjust property interests.
I accept that the Husband was making fairly generous contributions to the Wife during the period after cohabitation ceased, which have totalled $42,000.00 (inclusive of $8,400.00 child support). However, it is quite clear that the Husband must have been in a reasonable financial position to be able to do this. This is because he was able to contribute $42,000.00 towards the living expenses of the Wife and the child who was still under the age of eighteen in addition to accumulating $75,000.00, funding his own living expenses and paying off the BMW debt.
In my view, the sum of $75,803.00 must come into account. However, it is quite clear that the Wife cannot claim any direct financial contribution towards the accumulation of that sum.
It was put to me by the Wife’s counsel that I should also take into account the sum of $24,542.00 that is contained in the “S20” account. In my view that would be “double dipping” and the reason for this is quite clear.
The parties agree that the plumbing business is worth $27,676.00 and that I should take that sum into account in my reasoning. I note from the balance sheet of the business as at 30 June 2000 that the net assets of the business were $27,676.00. However, that includes $24,096.00 in the “S20” account. As this is almost the same as the current balance of that account it seems to me that I should not bring that account into my calculations.
At the time of separation, the parties divided an account almost equally between themselves, in that the Wife took $10,000.00 and the Husband retained $10,900.00. I do not propose to bring those amounts into account, because any balances remaining are presumably contained in the parties’ bank accounts now.
It also became clear that the Husband retained some business funds outside the business account at or about the time of separation and subsequently deposited those. I will note take those into account either, because any remaining balance is also presumably included in the accounts currently existing.
The Wife’s evidence is that she has $856.00 in two bank accounts, and that was not challenged.
The Wife has a Mazda motor vehicle, which was purchased with the assistance of funds from the Husband so that should come into account. She says it is worth $6,000.00 and she was not challenged on that.
The Husband’s chattels were valued by the valuer who gave evidence at $3,760.00 and there was no challenge to that evidence. The Wife’s chattels are said by her to be worth $2,500.00 and although she conceded that she has no qualifications as a second hand furniture valuer, no real challenge was made to that. I therefore accept that as the value of her chattels.
The property available to the parties is therefore as follows:
Former matrimonial home........................................ $128,000.00
Plumbing business (agreed)......................................... $27,676.00
BMW (agreed).............................................................. $18,500.00
Boat, motor and trailer (agreed).................................. $15,000.00
Husband’s “I7” account................................................ $75,803.00
Wife’s bank accounts......................................................... $856.00
Mazda motor vehicle...................................................... $6,000.00
Husband’s chattels.......................................................... $3,760.00
Wife’s chattels................................................................ $2,500.00
Total:........................................................................... $278,095.00
At the time that the parties separated, the only major liability was the balance of a loan used to purchase the BMW. That balance was $11,700.00 and it was secured over the former matrimonial home.
The Husband’s counsel submits that I should take that into account as a liability and reduce the property pool by that sum of $11,700.00. However, I take a different view. It is clear from the evidence that the Husband has paid off that sum so it is no longer a liability. It therefore seems to me that I should not include that as a liability at this time. However, the Husband should be given credit when assessing contributions for paying off that liability.
The parties’ financial resources consist of their superannuation accounts. The Wife’s superannuation has an approximate value of $17,345.00 and that fund is the result of contributions by the Husband from the income of the business. Some of those contributions were made after separation.
The Husband’s superannuation is in the vicinity of $25,000.00. As noted above, he redeems some superannuation but the value of that is included in his Building Society account that is taken into account in the property shown above.
The Wife’s counsel sought to include the Husband’s interest in his late mother’s estate as a further financial resource. The evidence was that his mother died not long before the trial but the Husband had no knowledge of any interest in her estate and he could not produce any documentation. In my view, any interest he has in her estate is property and not a financial resource. However, I have no evidence of any interest in the estate and the Wife could not possibly say she contributed to it in any way, in any event. I therefore propose to exclude that from consideration.

Contributions

Sub-section (4) of the Family Law Act sets out the factors that I must take into account in relation to property matters. It reads as follows:
“79(4) [Matters to be taken into account] In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account-
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage 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, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage 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, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent;
(d) the effect of any proposed order upon the earning capacity of either party to the marriage;
(e) the matters referred to in sub-section 75(2) so far as they are relevant;
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.”
Clearly, I need to take into account the contributions of the type referred to in (a), (b) and (c).
As stated above, the parties adopted “traditional” roles in relation to their marriage. The Husband was the breadwinner and the Wife was almost exclusively responsible for running the home and looking after the children. The Husband was quite honest in admitting that the Wife performed her role as a homemaker and parent very well.
On the other hand, the Wife attempted to show that the Husband was miserly and was not a very good provider. I cannot accept that evidence and I am satisfied that he was a good provider and that the Wife was able to draw whatever she needed for household expenses from the parties’ joint account. It is clear that from time to time the parties argued about money matters, but that is not unusual in a marriage. I find that the Wife has overstated the Husband’s reaction to her purchase of tyres for her car on one occasion, and I accept his evidence that his anger was because she bought expensive tyres for a car of little value.

The Wife also states that the Husband limited the children to two minutes each in the shower as a miserly way of saving money. However, I accept his evidence that when two adults and five children each have to have a shower before attending church activities, there is a distinct possibility that the hot water will run out if no limitation is put on the time spent by the children in the shower.
The Wife’s evidence and the submissions of her counsel were that she should be given extra credit because of the Husband’s conduct during the marriage “as a matter that is relevant to (their) respective contributions”. In this regard the Wife says that his conduct was characterised as follows:
a)threats and physical violence towards herself and the children;
b)repeated verbal abuse and denigration;
c)extreme miserliness or monetary manipulation/control;
d)non-consensual sexual conduct.
I will deal with each of those individually.
As I have said above, the Husband admitted that he was a hard disciplinarian in relation to the children. However, I accept his evidence that the children have all visited and stayed with him since separation.
The threats and physical violence towards the Wife over a thirty year period appear to be somewhat insignificant. Indeed, she says that the Husband assaulted her “on about half a dozen occasions during the relationship”. That is an average of one occasion every five years and even if I accept her evidence at its highest, that is certainly at the lower end of domestic violence allegations seen in this Court. She admitted that she did not report any such assaults to police or doctors on any occasion.
The simple fact is that I do not accept her evidence at its highest.

I prefer to accept the Husband’s evidence that the parties did yell and scream at each other from time to time and that on rare occasions matters may have go out of control. It is clear that the Wife attempted to hit the Husband on one occasion with a saucepan but, luckily for the Husband, that blow did not connect.
The Wife claims that she was in fear of the Husband but I do not accept that. She admits to taking the BMW without the Husband’s permission and contrary to his wishes on one occasion. That would appear to suggest that she was not as fearful of him as she would have me believe.
In relation to verbal abuse, I am of the view that the Wife gave as good as she got.
The Wife claims that the Husband was miserly and I have already indicated that I find that she was able to use the joint cheque account for household expenses as and when she wished. However, it was the Wife’s further evidence that the Husband was not wasteful of money, so it seems to me that any money that was not spent by her or by him must have contributed to the accumulation of the property that exists today. She will receive her share of that property.
In relation to non-consensual sexual conduct, I accept the Husband’s evidence that there may have been occasions when he was more eager for sexual activity than she was and this resulted in some frustration and arguments. He admits that he may have grabbed her by the throat on one occasion more than thirty years ago.
In relation to the accusations made generally by the Wife against the Husband, I find that the loving and grateful letters written by her to the Husband after separation belie those accusations.
I was referred by the Wife’s counsel to the decision of the Full Court of the Family Court of Australia in Kennon v Kennon (1997) FLC ¶92-757. In my view this case is not one in the “relatively narrow band” of cases referred to in Kennon at pages 84295 and 84296. Further, it is my finding that the Wife has sought to exaggerate some evidence and omit other evidence in an effort to bolster her case in relation to this aspect.
It is my finding that during the marriage the Husband was a good financial provider and the Wife was a good homemaker and parent. Since the parties separated, the Husband has been able to make some reasonable contributions to the accumulations of their wealth as well as pay off the BMW loan, pay child support and contribute reasonably significant sums towards the maintenance of the Wife. While it is clear that those direct financial contributions were made entirely by the Husband, the Wife continued to contribute after separation by being responsible for the support of their fourteen-year-old daughter.
It is quite clear from Williams and Williams (1985) FLC ¶91-628 that contributions to the “welfare of the family” include contributions made to the welfare of the children of the family after the parties have separated.
The Wife has started a cleaning business in New South Wales so she is now better able to support herself and it appears that the contributions of support from the Husband have ceased.
Although the Husband appears to have made a greater contribution to the assets of the parties after separation than that of the Wife, the period during which those contributions were made is relatively small compared with the totality of the total period of the relationship. The parties have been separated for nearly five years but they commenced cohabitation more than thirty five years ago.
In the circumstances, I find that if I was to deal with this matter on the basis of contributions alone, I would make only a marginal adjustment in favour of the Husband for his post-separation contributions.

Section 75(2) factors

The Wife is aged fifty-two years of age and she has a cleaning business that she has established in New South Wales. Her income appears to have been steadily increasing as she has built up that business and she states that she is currently earning $550.00 per week.
The Husband is aged fifty-six years of age and he continues to run his plumbing business. Currently he is earning something less than $1,000.00 per week. That was his evidence in cross-examination and is supported by the financial statements attached to his affidavit. In the year ended 30 June 2000 his income prior to making contributions to superannuation was $51,000.00.
It is clear therefore that at present the Husband has a better income earning potential than the Wife. However, he is older and what he is earning now appears to be the most that he has earned. On the other hand, the Wife appears to be building up her cleaning business.
Notwithstanding this, there must be some adjustment in favour of the Wife because of the disparity in their income earning potential. The Wife was out of the workforce for approximately thirty years and she has no qualifications to speak of other than her cleaning capabilities that she put to good use as a good homemaker and parent. On the other hand, the Husband is a registered plumber and his income from that source is more secure.
Neither party has the financial responsibility for any of their children.
In relation to the standard of living referred to in paragraph (g) of section 75(2), the Wife’s counsel said that I should take into account the fact that the Wife has moved to New South Wales and housing is considerably more expensive there. I cannot do that. She moved to New South Wales of her own free will and I cannot see why the Husband should be penalised in any way by that choice on the Wife’s part.

Conclusions

In my view, I should take a global approach to this matter and I find that it is appropriate to make an adjustment in favour of the Wife of 5%, primarily because of the disparity in the parties’ income earning potential. Consequently, the Wife should receive 55% of the total property pool of $278,095.00.
In coming to this decision, I have also taken into account the financial contributions made by the Husband after separation to the accumulation of the parties’ assets and the contributions that he made to the Wife’s support after separation.
55% of the total property pool is $152,952.00.
It is the Husband’s position that I should take into account the sum of $33,600.00 that he paid to the Wife after separation that was not child support for the youngest child. I cannot do that because it is clear that he acknowledged that those contributions were made to assist the Wife financially and I must therefore treat those payments as spouse maintenance and not any form of partial or interim property settlement.
The Wife has retained her bank balances, her Mazda and her chattels with a total value in excess of $10,000.00. It therefore follows that she should receive a sum in the vicinity of $142,000.00 from the Husband if she is to receive her rightful entitlement.
I will therefore make appropriate Orders to take account of that.

I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of Roberts FM

Associate:

Date: 15^th May 2002