Obrien and Sinclair
[2016] FCCA 3340
•21 December 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| OBRIEN & SINCLAIR | [2016] FCCA 3340 |
| Catchwords: FAMILY LAW – Property – Contributions. |
| Legislation: Family Law Act 1975, ss.79, 75(2) |
| Cases cited: Beklar v Beklar [2013] FAMCA 327 |
| Applicant: | MS O’BRIEN |
| Respondent: | MR SINCLAIR |
| File Number: | MLC 7086 of 2015 |
| Judgment of: | Judge Williams |
| Hearing dates: | 10 – 12 August 2016 & 25 October 2016 |
| Date of Last Submission: | 13 December 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 21 December 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms Harris of Counsel |
| Solicitors for the Applicant: | Lennon Mazzeo |
| Counsel for the Respondent: | Mr Clarke of Counsel |
| Solicitors for the Respondent: | Robert M Phelan & Co Pty |
ORDERS
Within 30 days from the date of the making of these; -
(a)The husband and the wife forthwith and no later than 14 days after these orders do all acts and things and sign all documents necessary to cause the sum of $30,000 to be withdrawn from the loan facility with the (omitted) Bank secured by the property known as and situate at Property A in the state in Victoria more particularly described as all that piece or parcel of land contained in certificate of title volume (omitted) folio (omitted), (“the Property A property”) and paid to the husband or as he directs being an advance of the property due to him pursuant to paragraph 5e. of these orders;
(b)Within 21 days of the payment to the husband (or payment as he directs) of the sum of $30,000 the husband shall immediately vacate the former matrimonial home situate and located at Property B (“the Property B property”), (more particularly described at certificate of title volume (omitted), folio (omitted)) and thereafter the wife shall be entitled to sole occupancy of the Property B property to the exclusion of the husband.
The Wife forthwith do all acts and things necessary to cause the Property A property to be sold at the best price on the following terms and conditions;
(a)Within 28 days of the making of these orders:
(i)list the property for sale with a real estate agent;
(ii)instruct a solicitor or conveyancer to act upon the sale of the property;
(b)Within 7 days of listing the property with the nominated real estate agent the wife shall nominate; -
(i)A date for the sale of the Property A property by public auction being a date not less than 2 months and not more than 5 months from the date of the orders unless otherwise agreed by the parties in writing, and thereafter advise the husband’s solicitors of the proposed date for auction;
(ii)A reserve price for the auction and seek the agreement of the husband via his solicitors to the reserve price and in the event that agreement cannot be reached the parties shall accept the reserve price as set by the President of the Real Estate Institute of Victoria or his/her nominee;
(iii)Other terms and conditions of sale;
(c)The wife shall follow the reasonable recommendations of the nominated real estate agent in relation to the sales and marketing of the Property A property.
(d)On the date of the auction of the Property A property the Wife shall attend at the auction and provide instructions to the real estate agent and negotiate directly with any prospective purchaser in the event that the property does not reach the reserve price.
(e)Upon the sale of the property the wife shall cause the husband’s solicitors to be forwarded a copy of the signed contract for sale.
Upon the exchange of contracts for the sale of the Property A property the husband shall sign all documents necessary and give any necessary authority or consent to the registered mortgagee of the Property A property to permit the preparation of the discharge of the mortgage on that property and provide to the wife’s solicitors a withdrawal of Caveat, in registrable form, if applicable.
In the event that the Property A property does not sell at auction, then the wife shall take the advice of the Real Estate Agent regarding the date of a further auction and otherwise have the property promoted for private sale.
Upon the completion of the sale of the Property A property the proceeds of sale shall be distributed in the following manner and priority; -
(a)In payment of all costs, commissions and expenses associated with the sale including the conveyancing costs;
(b)In discharge of the mortgage registered on the title to the (omitted) Bank;
(c)In payment of an amount sufficient to meet the Wife’s capital gains tax assessment on the sale of the property which amount is to be agreed between the parties and failing such agreement to be assessed by an accountant instructed by the parties jointly and at their joint expense to assess the amount of capital gains tax liability, and this amount shall be held in the trust account of Lennon Mazzeo Lawyers on behalf of the parties jointly pending payment to the Australian Taxation Office and in the event that such calculation cannot be prepared prior to the settlement of the sale then an amount of $100,000 shall be held in trust as provided for herein and after assessment and payment to the Australian Taxation Office, any surplus thereafter shall be distributed to the parties in the same manner as provided for in 5e. herein;
(d)In reimbursement to the wife for any expense incurred by her in relation to the sale by way of payment of advertising, legal searches or expenses;
(e)The balance then remaining to be divided between the parties as follows:
(i)to the wife the amount required to give the wife a total aggregate distribution of 77% of the non-superannuation property pool as set out in Schedule A herein taking into account the wife’s distribution pursuant to these orders;
(ii)to the husband the amount required to give the husband a total aggregate distribution of 23% of the non- superannuation property pool as set out in Schedule A herein taking into account the husband’s distribution pursuant to these orders including the advance payment received in paragraphs 1a & b. herein;
Pending the sale of the Property A property the wife shall be responsible for the payment of all debts and liabilities associated with that property including the mortgage repayments, rates and insurances and the wife shall be otherwise solely entitled to the rental income from that property.
That simultaneously with the settlement of the sale of the Property A property and the distribution to the parties pursuant to paragraph 5e. herein; -
(a)The husband shall do all such acts and things and sign all necessary documents to transfer to the wife, at the expense of the wife, all of his right, title, and interest in the property at Property B (“the Property B property”), (more particularly described at certificate of title volume (omitted), folio (omitted)) including provision of a Withdrawal of Caveat in registrable form, if applicable.
(b)The wife is to do all such acts and things necessary, at her expense, to discharge the mortgage or any other encumbrance affecting the Property B property and in the names of the parties jointly and thereafter refinance the same in her sole name.
The husband shall sign all documents necessary and give any necessary authority or consent to the registered mortgagee of the Property A property to permit the preparation of the discharge of the mortgage on that property.
That as and from the date of these orders the wife shall pay all instalments pursuant to the mortgage and all rates, taxes and outgoings including insurance on the Property B property as and when they fall due.
The upon vacating the Property B property the husband shall remove and retain; -
(a)All sporting and angling equipment;
(b)Personal clothing;
(c)The Ford (omitted);
(d)The King size bed and linen;
(e)The (omitted) 40-inch Television set;
(f)One half of the wine collection;
(g)His books;
(h)His personal papers;
(i)The filing cabinet;
(j)His tools;
(k)His personal work items;
(l)(omitted) the dog and associated items used for (omitted).
Upon the husband vacating the Property B property pursuant to paragraph 2b. herein, the husband is restrained by injunction from entering on to the Property B property for any reason without the written consent of the wife.
Contemporaneously with the making of these orders and unless specified otherwise, the wife be liable for and pay or cause to be paid to and indemnify the husband absolutely in relation to:
(a)Any and all debts in the wife’s name;
(b)Any and all credit card liabilities in the wife’s name.
Contemporaneously with the making of these orders and unless specified otherwise, the husband be liable for and pay or cause to be paid to indemnify the wife absolutely in relation to:
(a)Any and all credit card or other like personal debts in the husband’s name; and
(b)Any and all debts in the husband’s name or any business in which the husband has an interest.
Save as herein before provided, that each of the husband and the wife shall retain for their sole use and benefit absolutely free from any further claim or demand from the other all other property as is in their respective possession and control including but not limited to; -
(a)Deposits in any bank accounts;
(b)Any superannuation entitlements standing to the credit of a party.
Upon the making of these orders the joint tenancy of the parties in respect of the Property B property is severed.
In the event that either party refuses or neglects to sign any document or give any necessary authority or consent or do any act or thing necessary to give effect to these orders within 7 days of being requested to do so, then the Registrar of the Federal Circuit Court of Australia at Melbourne is appointed pursuant to section 106A of the Family Law Act 1975 to execute all such documents in the name of the party in default and to do all things necessary to give validity and operation to these orders.
That all extant property and spousal maintenance applications be and are hereby dismissed.
AND THE COURT NOTES:
A.The Court notes that the Property A property is currently tenanted and will therefore be sold subject to that tenancy.
B.Pursuant to section 81 of the Family Law Act 1975, the parties intend these orders to finally determine the financial relationship between them and avoid further proceedings about property settlement and spousal maintenance.
Schedule A
| Asset | Value |
| Property A property ( based on valuation) | $1,150,000 |
| Property B property (based on valuation) | $1,425,000 |
| Wife’s Everyday offset bank account | $15,000 |
| Distribution to husband upon vacating Property B Property | $30,000 |
| Sub total | $2,620,000 |
| Liabilities | Value |
| Mortgage secure against Property A (Including $30,000 distribution to the Husband) | ($340,000) |
| Mortgage secured against Property B | ($850,000) |
| Amount to be retained for Capital Gains Tax on Property A | ($100,000) |
| Sub Total Liabilities | $1,290,000 |
| Nett Non-Superannuation Assets | $1,330,000 |
| Distribution | |
| 77 % to the Wife | $1,024,000 |
| 23 % to the Husband | $305,900 |
IT IS NOTED that publication of this judgment under the pseudonym O’Brien & Sinclair is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 7086 of 2015
| MS O’BRIEN |
Applicant
And
| MR SINCLAIR |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
This is an application for property adjustment pursuant to s.79 of the Family Law Act 1975 (“the Act”).
BACKGROUND
Relationship History
The applicant wife is aged 45 years. The respondent husband is aged 41 years.
The parties commenced cohabitation in (omitted) 2007, married on (omitted) 2010 and, according to the wife, separated in October 2014, and according to the husband, separated in December 2014.
The wife is employed as a (occupation omitted) for (employer omitted). In her Financial Statement she deposes to an income of $2000 per week from her employment and rental income (Property A property) of $590 per week. Her total estimated weekly income is therefore $2590.
The husband is unemployed, although he is a qualified (occupation omitted). He deposes in his Financial Statement to a nil weekly income. He is apparently not eligible for any Centrelink benefit because of the combined assets of the parties.
In 2001, the wife purchased a property situated at Property A (“the Property A property”), which she still retains. The property was purchased by her for $308,000, and she lived in the property from the date of purchase until January 2007.
The parties commenced cohabitation in (omitted) 2007, when the wife moved to (country omitted), where the husband was then living. The husband was born in the (country omitted) and in (omitted) 2006 moved to (country omitted) to pursue employment as a (occupation omitted).
At the time of cohabitation the Property A property was valued between $460,000[1] and $470,000 [2]. The Property A property was encumbered by a mortgage in favour of the (omitted) Bank in the sum of $139,000[3]. Therefore the wife’s equity in the Property A property was between $321,000 and $331,000.
[1] Retrospective valuation obtained by the husband, Annexure to the affidavit of Mr D sworn 22 July 2016.
[2] Retrospective valuation obtained by the wife, Annexure 1 to the affidavit of Mr S affirmed 28 July 2016.
[3] Annexure 1 to the affidavit of the wife sworn 27 July 2016 ("the wife's Trial Affidavit").
Between January 2007 and October 2010 the parties lived in rental accommodation in (country omitted). During this time, the wife tenanted the Property A property and the rent received of $460 per week was applied towards the mortgage instalments and outgoings on the property.[4]
[4] The wife's Trial Affidavit at Paragraph 15.
During the time the parties lived in (country omitted), both were in full-time employment and were earning reasonable incomes. The husband was employed as a (occupation omitted) and earned $80,000 per annum. The wife was employed as a (occupation omitted) and also earned $80,000 per annum. The living expenses, including rent, were paid equally by the parties during their cohabitation in (country omitted).
In October/November 2010, the parties relocated to Australia and commenced living in the Property A property. They remained living in that property until September 2012.
Upon moving into the Property A property, renovations and works were undertaken at the property. The wife’s evidence was that she paid approximately $25,000 towards the cost of these works, from savings accumulated by her whilst living in (country omitted).
The husband’s evidence was that he also contributed to the costs of renovations to the Property A property, and that he was involved in coordinating the relevant trades to carry out the works, and also performed manual work himself.
During the time the parties lived at the Property A property, both contributed to the mortgage repayments, which were not significant, as the mortgage at that time was in the vicinity of $ 139,000. In addition, the bills and household expenses were shared equally. Both parties appear to agree that they each paid $400 per month towards the mortgage, and an additional $450 per month towards living expenses.
In August 2011 the parties purchased a property situated at Property B (“the Property B property”) for the sum of $982,500. In addition to the purchase price, the parties paid approximately $48,000 stamp duty and legal fees.[5] Both the husband and the wife are the registered proprietors of the Property B property. The purchase of the Property B property settled in or about November 2011.
[5] The wife's Trial Affidavit at paragraph 37.
In order to fund the purchase of the Property B property, the wife increased the mortgage over the Property A property by $157,000 (in addition to the existing mortgage debt of approximately $120,000) and a mortgage was obtained from the (omitted) Bank in the sum of $904,000, which was secured against the Property B property.[6]
[6] The wife's Trial Affidavit at paragraph 38 and annexures 4 and 5.
From the date of settlement of the purchase of the Property B property, the property was tenanted until approximately September 2012. During that time the rental income was insufficient to pay the mortgage obtained for the purchase of the Property B property, and each of the husband and the wife contributed approximately $1000 per month towards the mortgages secured against both properties.
In September 2012, the husband and the wife moved into the Property B property and each commenced to pay $1600 per month towards the Property B mortgage repayments.
From September 2012 the wife attempted to lease the Property A property, however, she did not secure tenants until December 2012. During this period the wife paid the mortgage instalments on the Property A property. Once tenanted the surplus rent received from the Property A property was deposited in to the Property B property loan account. The wife’s evidence is that she paid all rates, utilities and other expenses for the Property A property.
In addition to payment of $1600 per month towards the Property B property, each of the husband and the wife contributed $450 per month for payment of rates, utilities and other outgoings in relation to their household. This arrangement continued until February 2015 when the wife assumed sole responsibility for payment of both mortgages and outgoings in relation to both properties and household expenses.
On 2 April 2014, the husband redeemed an endowment policy, which he had in the (country omitted), prior to cohabitation, and the sum of $46,177 was deposited into his personal bank account.
On 15 July 2015 the husband withdrew the sum of $27,000 from the offset account linked to the Property B mortgage. The wife’s evidence is that the offset account comprised her personal savings and that the husband had not made any contribution to the accumulation of those funds. This was not challenged by the husband.
On 6 October 2015 orders were made by her honour, Judge Harland, that the husband contribute half of the outgoings and mortgage payments whilst living in the Property B property.[7] It is agreed between the parties that the husband has not complied with that order and has not made the contributions towards the mortgage instalments and other expenses of the Property B property, or household expenses.
[7] Paragraph 4 of the orders made 6 October 2015.
The husband’s evidence is that he has continued to reside at the Property B property, albeit separated under the one roof. The wife’s evidence is that the husband does not actually live at the Property B property, and that he comes and goes, whilst she is at work and is effectively pretending that he continues to live in the property.
RELEVANT LEGISLATION
Property proceedings between parties to the marriage are governed by the provisions of s.79 of the Family Law Act 1975.
Section 79 (1) of the Act provides that the court may make such orders as it considers appropriate altering the interests of the parties in the property.
Section 79 (2) provides as follows:
The 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.
If the Court is satisfied that it is just and equitable to make an order altering the interests of the parties in property, s.79 (4) of the Act sets out the matters which the court must take into account when considering what order (if any) should be made.
That section provides as follows:
Section 79(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
Section 79(4) (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; and
Section 79(4) (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; and
Section 79(4) (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; and
Section 79(4) (d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
Section 79(4) (e) the matters referred to in subsection 75(2) so far as they are relevant; and
Section 79(4) (f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
Section 79(4) (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.
Prior to the decision of the High Court in Stanford v Standford [2012] HCA 52 the preferred approach to determine property matters was set out by the Full Court in the matter of In the Marriage of Hickey [2003]FamCA 395.
The approach, as set out in Hickey (supra) may be summarised as follows. Firstly, the court should make findings as to the identity and value of the property pool. Secondly, the court should determine the contributions of the parties both direct and indirect, including financial and non-financial contributions and then determine the contribution based entitlements of each of the parties; as a percentage of the value of the property of the parties. Thirdly, the court should determine whether any further adjustment should be made to the contribution based entitlements of the parties, after giving consideration to the relevant matters referred to in s.75(2) of the Act. Fourthly the court should consider the effect of those findings and decide what order for division of property is just and equitable.
In Stanford (supra) the High Court noted that s.79(1) enables the court to make such orders as it considers appropriate. However, prior to making any orders for the adjustment of parties’ interests in property, the court must first determine whether it is just and equitable to make any property orders, or to alter the parties’ interests in property.
The High Court stated in Stanford at [37]:
[37] First, it is necessary to begin consideration of whether it is just and equitable to make property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property……. The question posed by s.79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.”
The High Court further stated at [ 42] that in most cases:
[42] In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
In summary, in the majority of matters, the decision as to whether or not it is just and equitable for the Court to make property orders is resolved by the breakdown of the marital relationship and the mutual applications of the parties to the court for orders altering their respective property interests.
In this matter the parties have separated and both parties have made an application to the court seeking orders altering their respective property interests. It is clearly just and equitable to adjust property matters between the parties.
Having satisfied myself that it is just and equitable to make an order altering the interests of the parties in the property, the approach and considerations I must make are as follows:
a)Attribute value to the assets comprising the property pool;
b)Identify and give weight to the various contributions of each of the parties as set out in s.79(4) (a) – (c) and make an assessment as to the entitlements of the parties based on their respective contribution;
c)Identify the identify the relevant considerations as set out in s.79(4)(d)-(g), including the matters set out in s.75(2) so far as they are relevant, and then decide whether any further adjustment is appropriate;
d)Consider whether the proposed orders are equitable.
PROPOSALS
Applicant Wife
The applicant wife’s proposed orders set out in her Amended Initiating Application filed on 28 July 2016:
1. The Wife do all acts and things necessary to cause the property know as and situate at Property A in the state in Victoria more particularly described as all that piece or parcel of land contained in certificate of title volume (omitted) folio (omitted). ("the Property A property") to be sold for the best price reasonably obtainable by the following mechanism: -
a. Within 14 days of the making of these orders list the property for sale with a real estate agent agreed upon by the parties and in default of agreement the wife will nominate 3 real estate agents and the husband shall choose one of the 3 as the real estate agent to conduct the sale. such election to be made within 7 days of the wife's nomination of 3 agents and should the husband fail to elect one real estate agent within that 7 days the Wife shall be entitled to instruct any agent to act on the sale;
b. Within 14 days of the making of these orders the parties shall agree upon and the wife instruct a solicitor or conveyancer to act upon the sale of the property and if the parties cannot agree within 14 days then the wife will nominate 3 solicitors or conveyancers and the husband shall choose one of the 3 as the solicitor or conveyancer to act on the sale. such election to be made within 7 days of the wife nomination of 3 solicitors/conveyancers and should the husband fail to elect one real estate agent within that 7 days the Wife shall be entitled to instruct any solicitor or conveyancer to act on the sale;
c. Within 7 days of listing the property with the nominated real estate agent the parties shall agree upon:-
i. A date for the sale of the Property A property by public auction being a date not less than 2 months and not more than 5 months from the date of the orders unless otherwise agreed by the parties in writing;
ii. A reserve price for the auction and in the event that agreement cannot be reached the parties shall accept the reserve price as set by the President of the Real Estate Institute of Victoria or his/her nominee;
iii. Other terms and conditions of sale;
d. The parties shall follow the reasonable recommendations of the nominated real estate agent in relation to the sales and marketing of the Property A property.
2. Upon the completion of the sale of the Property A property the proceeds of the sale shall be distributed in the following manner and priority:
a. In payment of all costs. commissions and expenses associated with the sale including the conveyancing costs;
b. In discharge of the mortgage registered on the title to the (omitted) Bank;
c. In payment of an amount sufficient to meet the Wife's capital gains tax assessment on the sale of the property which amount is to be agreed between the parties and failing such agreement to be assessed by an accountant instructed by the parties jointly and at their joint expense to assess the amount of capital gains tax liability. and this amount shall be held in the trust account of Lennon Mazzeo Lawyers on behalf of the parties jointly pending payment to the Australian Taxation Office and any surplus thereafter shall be distributed to the parties in the same manner as provided for in 2.d. herein;
d. The balance then remaining to be divided between the parties as follows:
i. to the wife the amount required to give the wife a total aggregate distribution of 80% of the total non- superannuation property as set out in Notation A herein taking into account the wife's distribution pursuant to these orders;
ii. to the husband the amount required to give the husband a total aggregate distribution of 20% of the total non- superannuation property as set out in Notation A herein taking into account the husband's distribution pursuant to these orders.
3. Pending the sale of the Property A property and for so long as that property is tenanted and the Wife or her agent is receiving rent from that property. the wife shall be responsible for the payment of all debts and liabilities associated with that property including the mortgage repayments. rates and insurances and the wife shall be otherwise solely entitled to the rental income from that property.
4. Pending the sale of the Property A property and in the event that the property is not tenanted or the wife or her agent is not receiving a rental income from that property. the husband and the wife shall be equally responsible as to 50% each for the payment of all debts and liabilities associated with that property including the mortgage repayments. rates and insurances and in the event that a party does not meet their obligation for payment under this order. any amount received pursuant to paragraph 2(d) herein shall be reduced by the amount which that party should have paid pursuant to this order.
5. That simultaneously with the settlement of the sale of the Property A property and the distribution to the parties pursuant to paragraph 2 (d) herein:
a. The husband shall do all acts and things and sign all necessary documents to transfer to the wife, at the expense of the wife, all of his right, title, and interest in the property at Property B, (“the Property B property”), (more particularly at certificate of title volume (omitted), folio (omitted)).
b. The wife is to do all such acts and things necessary. at her expense. to discharge the mortgage or any other encumbrance effecting the Property B property and in the names of the parties jointly and thereafter refinance the same in her sole name.
c. The husband shall vacate the Property B property and contemporaneously remove any internal locks and/or security devices at the said property without causing any damage to the said property and ensure the property is cleaned and remove all debris or other like rubbish that may remain as a result of the husband's vacation.
6. That as and from the date of these orders the wife shall:
a. Have sole right to occupy the Property B property and during such right of occupation. the wife pay all instalments pursuant to the mortgage and all rates. taxes and like apportionable outgoings of the property as and when they fall due.
7. Contemporaneously with the making of these orders and unless specified otherwise. the wife be liable for and pay or cause to be paid to and indemnify the husband absolutely in relation to:
a. All liabilities of the Property B property without limiting the generality thereof. including any past, current or future liabilities from any loans. taxes or duties howsoever arising:
b. Any and all debts in the wife's name;
c. Any and all credit card liabilities in the wife's name; and
d. Any and all debts in the wife's name and in any company that she is/has been a shareholder or director of.
8. Contemporaneously with the making of these orders and unless specified otherwise. the husband be liable for and pay or cause to be paid to indemnify the wife absolutely in relation to:
a. Any and all credit card or other like personal debts in the husband's name: and
b. Any and all debts in the husband's name or any company which he is/has been a shareholder or director.
9. That each party be solely liable for and indemnify the other with respect to any/all debts, whether past, present or future. held in their sole name. or to be held in their sole name following the resolution of this matter.
10. That as and from the date of these orders the husband shall retain for his sole use and benefit absolute! free from an further claim or demand from the wife all assets he now has, whensoever and howsoever acquired, including but not limited to:
a. The husband's personal savings:
b. The husband's motor vehicle:
c. The husband's personal effects.
d. Any superannuation entitlements standing to his credit.
11. As and from the date of these orders. the wife shall retain for her sole use and benefit absolutely free from any further claim or demand from the husband all assets she now has, whensoever and howsoever acquired. including but not limited to:
a. The wife's interest in the Property B property;
b. The wife's offset monies held with (omitted) Bank or any other personal savings;
c. The wife's motor vehicle;
d. The wife's personal effects;
e. Any superannuation entitlements standing to her credit.
12. Except as specified in these orders. and save for the purposes of enforcing any monies due under these or any subsequent orders:
a. Each party is solely entitled. to the exclusion of the other. to all other property in the possession of such party as at the date of these orders;
b. Each party forgoes any claims they may have to any superannuation. long-service leave, redundancy. retirement. retrenchment. and similar benefits belonging to or earned by the other;
c. All insurance policies remain the sole property of the named owner;
d. Each party is solely liable for. and indemnifies the other against. any liability encumbering any item of property to which that party is entitled pursuant to these orders. and any other liability in their name; and
e. Any joint tenancy of the parties in any real or personal property is severed.
13. In default of the parties doing all things necessary to give effect to these order, a registrar of the Family Court of Australia at Melbourne be appointed pursuant to section 106A of the FamilyLawAct1975 to execute all such documents in the name of the party in default and to do all things necessary to give validity and operation to these orders.
14. That all extant property applications be hereby dismissed.
Respondent Husband
The respondent husband’s proposed orders set out in his Amended Response filed on 4 August 2016:
Spousal Maintenance
1. That the Applicant Wife pay spousal maintenance to me in a sum to be determined by the Court for a period to be determined by tile Court.
Property Matters
2.1 That I transfer my interest in the property at Property B and relinquish any claim upon the property at Property A upon the Applicant making a payment to me within 30 days.
2.2 The payment to be made by the Applicant to be calculated at 50% of the equity value of both real estate assets, namely $720,000.00 plus an additional sum of $60,000.00 (in lieu of any splitting order in relation to superannuation), a total payment of $780,000.00.
2.2.1 That I continue to occupy the Property B property until the payment is made.
2.2.2 That the Applicant be liable for, indemnify me against and refinance on or before the payment date each of the loans secured by mortgages on the two real estate assets.
2.2.3Each party retain vehicles, savings if any and superannuation entitlements which they presently hold.
2.2.4 I be liable for my debts to (omitted) and (omitted)) together amounting to $12,500.00.
2.3 I retain the following items:
2.3.1 All sporting and angling equipment.
2.3.2 personal clothing.
2.3.3 Ford (omitted))
2.3.4 King size bed and associated linen.
2.3.5 (omitted) 40 inch TV.
2.3.6 (country omitted) and personal artwork.
2.3.7 Fifty percent of wine collection.
2.3.8 Personal books.
2.3.9 Filing cabinet.
2.3.10 Personal tools.
2.3.11 Personal work items.
2.3.12 (omitted), the dog and all associated items.
2.4 Each party retain all other items in his or her possession.
2.5 In the event of default in payment the real properties be sold pursuant to the usual default orders.
2.6 Such further and other orders as the Cou1t deems fit.
2.7 That the Applicant pay the Respondent's costs of and incidental to this proceeding.
ISSUES IN DISPUTE AT THE HEARING
The following issues were in dispute:
(1)Whether liabilities of the husband should be included in the asset pool;
(2)The weight to be attributed to the initial contributions of the wife;
(3)The weight to be attributed to the contributions of each party during the relationship;
(4)The weight to be attributed to the contributions of each party post separation;
(5)The characterisation of the $27,000 withdrawn by the husband from the (omitted) Bank offset account on 15 July 2015;
(6)The relevance of domestic violence allegedly perpetrated by the wife;
(7)The weight, if any, to be attributed to the husband’s asserted s.75(2) factors.
EVIDENCE OF THE PARTIES
Wife
The wife relied on the following documents:
a)Initiating Application filed 28 July 2015;
b)Financial Statement filed 28 July 2015;
c)Affidavit of wife filed 28 July 2015;
d)Amended Initiating Application filed 28 July 2016;
e)Financial Statement filed 28 July 2016;
f)Affidavit of wife filed 28 July 2016 (“the wife’s Trial Affidavit”);
g)Affidavit of Mr S filed 28 July 2016;
h)Outline of Case Document filed 5 August 2016.
The wife gave evidence and was cross-examined. She gave evidence in an emotional fashion, however, she endeavoured to answer questions directly, and I accept her to be a witness of truth. She was able to produce contemporaneous documents to corroborate her evidence, and in particular the evidence of her assets at the commencement of the relationship, and her contributions during and post separation. She seemed overwhelmed and exhausted by the circumstances of the breakdown of the marriage and had clearly struggled to maintain the assets post separation.
Husband
The husband relied upon the following documents:
a)Affidavit of the husband sworn 7 October 2015;
b)Financial Statement sworn 7 October 2015;
c)Affidavit of husband sworn 13 July 2016 (“husband’s Trial Affidavit”);
d)Financial Statement sworn 13 July 2016;
e)Affidavit of Dr T, psychiatrist sworn 8 April 2016;
f)Affidavit of Mr B, valuer, sworn 22 July 2016;
g)Affidavit of Ms N, psychologist sworn 1 August 2016
h)Case Information Document filed 5 August 2016.
The husband issued subpoenas to the following experts:
i)Dr A (psychiatrist);
ii)Ms N (husband’s psychologist).
The husband gave evidence and was cross-examined. He also gave evidence in a highly emotional fashion. He tended to evade direct answers to questions and attempted to justify and substantiate his past actions, in particular the expenditure of the proceeds of the endowment policy, his redundancy payment and the $27,000 withdrawn from the offset account. He exaggerated the extent of his contributions and did not give the wife credit for the overwhelming contributions. He seemed to lack insight into the fact that, absent the wife’s significant equity in the Property A property, there would have been no prospect of the parties having sufficient funds to enable them to acquire the Property B property. He did not seem to appreciate the juxtaposition of his evidence about his inability to work, with the extensive holidays and travel he had undertaken.
Dr T gave evidence and was cross-examined. His evidence as referred to at paragraphs 160 to 170 hereof.
Dr A had been requested by the wife’s solicitors to prepare a psychiatric evaluation of the husband. The wife did not seek to rely on Dr A’s report, however, the husband’s solicitors issued a subpoena to Dr A to attend court to give evidence.[8] Dr A gave evidence and was cross-examined by the wife’s counsel. His evidence is referred to at paragraphs 171 t0 174 hereof.
[8] Subpoena to Dr A dated 30 August 2016.
The husband filed an affidavit of Ms N on 2 August 2016. Annexed to the affidavit was a report prepared by her dated 1 August 2016. I was initially advised that Ms N would not be called to give evidence, on behalf of the husband, however, when the trial was adjourned part heard the husband’s solicitors issued a subpoena to her to attend court to give evidence.[9] Ms N gave evidence and was cross-examined by the wife’s counsel. Her evidence is referred to at paragraphs 176 to 185 hereof.
THE ASSETS AND LIABILITIES OF THE PARTIES
[9] Subpoena to Ms N dated 30 August 2016.
Prior to the trial commencing. I was informed by both counsel that there was a dispute about the value of both the Property A and the Property B properties. Both parties filed affidavits of their respective valuers, however, at the commencement of the trial, I was advised that an agreement had been reached about the valuation of the two properties.
The agreed assets and liabilities were as follows:
No. Asset Valuation 1. Property A $1,150,000 2. Property B $1,425,000 3. Wife's (omitted) Bank everyday offset account $15,000 Sub – total $2,590,000 Liabilities 4. Mortgage secured against Property A property (wife) $310,000 5. Mortgage secured against Property B property (joint) $850,000 Sub –total $1,160,000 Nett assets $1,430,000 Superannuation 6. Wife
(omitted) super – (omitted) total
$148,000
$7,369
$7,716
$163,0857. Husband
(omitted) super- (omitted)
(omitted) Super- (country omitted) pension
Total
$34,920
$1,918
not disclosed$36,800
Total superannuation $199,885
The additional asset the wife sought to include was as follows:
No. Asset Valuation 8. $27,000 withdrawn by the husband from the (omitted) offset account (Property B mortgage) on 15 July 2015 $27,000
The additional assets the husband sought to include were as follows:[10]
[10] Paragraph 7 of the husband's Case Information document.
No. Asset Valuation 9. Husband's (omitted) Bank account $2000 10. Husband's (omitted) Bank account $40 11. Wife’s (omitted) account (omitted) $200
The additional liabilities the husband sought to include were as follows: [11]
[11] Paragraph 7 of the husband's Case Information document.
No. Liability Valuation 12. Husband’s liability to (omitted) $6000 13. Husband’s liability to (omitted) ((country omitted)) $6700 14. Husband’s overdrawn (omitted) account (omitted) $2130 15. Husband’s liability for legal costs unpaid $29,400 16. Wife’s liability for legal costs unpaid $20,000 17. Wife’s 2015 taxation liability $2189
It was sensibly conceded by the husband’s counsel that the motor vehicles of the parties should be excluded from the asset pool.
Notional Addback of property to the asset pool
In order to determine the property pool available for distribution between the husband and the wife, it is necessary to determine whether the sum of $27,000 withdrawn by the husband from the joint offset account should be notionally added back to the asset pool. This requires consideration of notional addback of property to the asset pool.
The Full Court in the recent matter of the Vass v Vass [2015] FamCAFC 51, [138] stated the position in relation to national add back of property which is no longer in existence but which one party has had the use of:
[138] There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan (2013)FLC93–545 — or, more particularly, the decision of the High Court in Stanford & Stanford(2012)247CLR108 — is authority for any necessary contrary solution.
Living Expenses
In order to determine whether the sum of $27,000 withdrawn by the husband should be notionally added back to the asset pool, I must consider how those funds were applied.
Ryan J in Beklar v Beklar [2013]FAMCA 327 , at [135],[136] and [137] noted:
[135] “As a general approach, the court has been that reluctant to notionally add back assets where monies that existed at separation have been spent on reasonably incurred living expenses; the point being that parties are entitled to continue to provide for their own support: M and M [1998)FamCA42.
[136] In M and M, Baker, Kay and Chisholm JJ said at [2.10]:
It is well settled that save in exceptional circumstances a trial Judge should deal with the property as at the date of the hearing and make adjustments taking into account the various matters set out under s 79. (Wells v Wells (1977)FLC90-285; Wardman v Hudson (1978)FLC90-466; In the Marriage of Geyl 7 Fam LR 219). However, the particular justice of the case may make it appropriate to notionally add back assets which have been demonstrated to have been dissipated either during the marriage or post- separation. Normally it is necessary to demonstrate an appropriate basis for doing so, for example by wastage such as gambling or extravagant living. (Kowaliw v Kowaliw (1981) FLC 91-092; Fane-Thompson v Fane-Thompson (1981)FLC91-053; Winnel v Winnel (1984)FLC91-580 Townsend v Townsend (1995) FLC 92-569; Doherty v Doherty (1996) FLC 92-652.
[137] In C and C [1998] FamCA 143, the Full Court said that where the monies have been shown to have been reasonably disposed of, the notional add back approach should be the exception and not the rule.
Husband’s withdrawal of $27,000 from the joint (omitted) account on 15 July 2015
The husband was extensively cross-examined about the expenditure of the $27,000. He agreed that on 15 July 2015 he accessed the “(omitted)” savings account for the first time. He agreed that the account was a joint account, but he had not made any direct deposits into the account.
The husband agreed that he transferred $27,000 from the joint (omitted) account into his account via a net bank transfer and on the same day he attended the (omitted) Bank branch in (omitted) and withdrew $20,000 of the money in cash. It was suggested to him that he withdrew the money so that there would be no record of his expenditure on his bank statement. In response to that proposition, the husband’s evidence was that “he was in a state of panic and he thought the bank could move the money back”. By this statement, I understand the husband meant that the bank could access a bank account in his sole name, and without his authority transfer the funds back into the joint account.
On 30 June 2016, 15 July 2016 and 23 July 2016, the husband consulted his GP, Dr P. Dr P’s file was subpoenaed by the wife’s solicitors and tended by counsel for the wife and is exhibit W3.
On 23 July 2016, Dr P provided the husband with a Centrelink medical certificate stating that the husband was unfit for work from Tuesday at 30 June 2015 to Thursday, 20 August 2015 inclusive. When queried about the necessity for a Centrelink medical certificate when he was unemployed, the husband’s answer was evasive and unsatisfactory. He vehemently denied that he had removed funds from the bank account on 15 July 2016 to ostensibly assist an application for Centrelink benefits.
The husband’s evidence was that the cash he had withdrawn was stashed partially in his car and partially in a locked upstairs room at the Property B property.
According to the wife, the parties separated under the one roof in October 2014, and according to the husband they separated under the one roof in December 2014. The husband’s evidence was that he had sought and obtained legal advice from a solicitor well prior to July 2015, and in fact, the first letter from his solicitor to the wife’s solicitor was dated 13 May 2015.[12] The responding letter from the wife’s solicitor was dated 27 May 2015[13]. Both letters referred to the necessity to exchange documents and in particular requested bank statements for the 24 months preceding the date of the letters, be provided by the other party. By July 2015, it would have been abundantly apparent to the husband that the wife was seeking disclosure of relevant financial documents, which included bank statements and provision of those statements would enable the wife’s to reconstruct his expenditure.
[12] Annexure 5 to the husband's Trial Affidavit.
[13] Annexure 6 to the husband's Trial Affidavit.
I do not accept the explanation of the husband why it was necessary to withdraw the funds in cash.
I find that the only plausible explanation for those actions is that the husband did not want any record of his expenditure in his bank account statement.
The husband contends that he applied those funds towards living expenses, which are ostensibly detailed in his Financial Statement.[14] The expenses referred to in Part M clearly include expenses which were not incurred for daily living expenses. These include $5726 for legal costs and expenses, $1200 for an overdraft account, $2000 for travel to (omitted), and $900 for a deposit on the (omitted) course.
[14] Part M of the husband's Financial Statement sworn 12 July 2016.
There were no particulars or documents provided to substantiate the claimed expenditure.
In response to the proposition that the expenditure claimed at part M of the Financial Statement, was not wise spending, the husband’s evidence was that it was “a bit erratic”.
In the absence of any satisfactory evidence as to how the money was applied, I am unable to determine whether the monies were reasonably disposed of. I accordingly intend to take the husband’s expenditure into account pursuant to s.75(2)(o) of the act.
Liabilities which the husband sought to include in the pool
The additional liabilities the husband sought to include in the pool were as follows:[15]
a)(travel omitted) –$5,800;
b)(travel omitted) ((country omitted)) $6, 700;
c)husband’s overdrawn (omitted) Account $2,000;
d)husband’s liability for legal costs unpaid $29,400;
e)legal fees owing to the wife’s solicitor $20,000;
f)wife’s 2015 taxation liability $2189;
[15] The husband's Trial Affidavit at paragraph 24 and page 3 of his Case Information Document.
I will address each alleged liability.
(travel omitted)
In August 2015, the husband travelled to (omitted), ostensibly to attend a course to further his career prospects. He stayed in (omitted) for six days and during that stay he also attended a rock concert.
His evidence under cross-examination was that he completed the course. However, he has been unable to complete approximately 16 assignments which he was required to complete in order to obtain his qualifications. The provider of the course was (omitted). The husband’s outstanding liability to (omitted) group is $5800. There was no suggestion that the wife was ever consulted about, or in fact, prior to receipt of the husband’s Trial Affidavit, even knew that the husband had attended the course.
Accordingly, I find that the husband’s liability to (omitted) group should not be included in the matrimonial asset pool.
(omitted) ((country omitted))
The husband was cross-examined about the liabilities he had whilst living in (country omitted). At the time of cohabitation, he conceded that he owned an endowment policy which was valued at approximately £12- £15,000, had a personal loan with (omitted) bank of £35,000 and credit card debts of approximately £30,000. This was despite him having sold property in the (country omitted). His evidence was at the time the parties left (country omitted), he had a credit card debt owing to (omitted) of $6,700.
Despite receiving various lump-sum payments which included the proceeds of sale of the (country omitted) property, the proceeds of the endowment policy, which was eventually redeemed for $47,000 in 2015 and the $27,000 withdrawn from the joint (omitted) account in July 2015, the husband failed to discharge his credit card debt owing to (omitted).
There was no evidence that the wife had received any benefit from the expenditure which resulted in the debt owing to (omitted). Furthermore, there was no evidence that the debt had even been incurred subsequent to cohabitation.
The only evidence about the manner in which the parties arranged their financial affairs, whilst living in (country omitted), was that each was equally responsible for the rent and joint household expenses.
I therefore find that the debt owing to (omitted) should not be included in the asset pool for division between the parties.
The Husband’s overdrawn (omitted) account
The husband asserts in his Trial Affidavit[16] that his (omitted) account (omitted) is overdrawn to the extent of approximately $2000. This is in contrast to Part K of his Financial Statement[17] which does not disclose the husband has any overdrawn bank account and paragraph 37, which states he has an account balance of $2000 in his (omitted) Bank account number (omitted).
[16] At paragraph 24.
[17] Sworn 12 July 2016.
The husband was cross-examined about the discrepancy and his evidence was that paragraph 37 of the Financial Statement was a mistake. No further evidence was led on his behalf about when this alleged overdrawing occurred. He was not re-examined about this issue.
However, given the evidence that the husband deposited both the proceeds of the endowment policy and his withdrawal from the (omitted) account into his personal bank account, any overdrawn amount would logically have occurred in fairly recent times and most certainly well post separation.
I therefore find that the alleged overdrawn account balance of $2000 should not be included in the asset pool.
Outstanding legal fees of both parties
The schedule of assets and liabilities in the husband’s Trial Affidavit[18] does not include outstanding legal fees for either party. In the husband’s Case Information document[19]_bookmark18 at paragraph 7, he includes his liability for unpaid legal costs of $29,400 and the wife’s liability for legal fees owing to her solicitor of $20,000.
[18] The husband's Trial Affidavit at paragraph 24.
[19] Filed 5 August 2016.
There was no other evidence as to the quantum of legal fees incurred by either party. No documents were produced by the husband to substantiate either amount. The wife did not seek to include her liability for legal fees in the asset pool.
Obviously the legal fees were incurred by each party post separation. The husband’s evidence was that he first sought legal advice sometime in early 2015.
The legal fees of each party are their respective responsibility and I do not propose to include outstanding legal fees as a liability in the asset pool.
Wife’s taxation liability
The wife does not seek to include her 2015 taxation liability as a joint liability of the parties. This liability is not referred to at paragraph 24 of the husband’s Trial Affidavit, however, it is included in the list of liabilities at paragraph 7 of his Case Information document. Paragraph 48 of the wife’s Financial Statement[20] lists a liability of $2189 assessed and unpaid income tax, which was due on 30 July 2015. Part O of the wife’s Financial Statement refers to a taxation liability for the financial year ending 30 June 2016, arising from the income surplus which the wife received from the Property A property. That amount is yet to be assessed.
Additional assets husband sought to include in the pool
[20] Sworn 27 July 2016
The husband sought to include some minor assets in the pool, which were bank account balances. No bank statements were tendered by either party to substantiate the amounts claimed. I do not propose to include these amounts in the asset pool.
As a result of the findings set out herein, the net available asset pool for distribution between the parties is as follows:
No. Asset Valuation 1. Property A $1,150,000 2. Property B $1,425,000 3. Wife's (omitted) Account $15,000 Sub – total $2,590,000 Liabilities 5. Mortgage secured against Property A property (wife) $310,000 6. Mortgage secured against Property B property (joint) $850,000 Sub –total $1,160,000 Nett assets $1,430,000 Superannuation 3. Wife
(omitted) Superannuation super – (omitted) super – (omitted) total
$148,000
$7,369
$7,716
$163,0854. Husband
(omitted)
Super- (country omitted) pension
Total
$35,800
$1,918
not disclosed$37,718
Total superannuation $200,803
CONTRIBUTIONS
Initial contributions
At the commencement of cohabitation in (omitted) 2007 in (country omitted) the assets of the parties were as follows:
Wife
The wife was the sole registered proprietor of the Property A property. Her evidence was that the property was purchased by her in 2001 for the sum of $308,000. The wife lived in the property from late 2001 to January 2007, prior to moving to (country omitted) to commence cohabitation with the husband.[21] This evidence was not challenged by the husband’s counsel.
[21] The wife's Trial Affidavit at paragraph 15.
Both parties obtained retrospective valuations of the Property A property. The wife’s valuer Mr S, valued the property as at January 2007 at $470,000. The husband’s valuer, Mr B valued the property as at January 2007 at $460,000.
The wife’s evidence is that as at January 2007, the property was encumbered with a mortgage to the (omitted) Bank of $139,000.[22] Her equity in the Property A property was therefore, between $321,000 and $331,000.
[22] Annexure 1 of the wife's Trial Affidavit.
In addition to the Property A property, the wife’s evidence was that she had personal savings of $26,589.24 with the (omitted) Bank.[23] She also had superannuation entitlements with (omitted) Super of $41,000 (as at July 2007), (omitted) super of $5088 (as at January 2007 and (omitted) super of $5907 (as at 30 June 2007).[24]
[23] The wife's Trial Affidavit at paragraph 14 and annexure 1.
[24] The wife's Trial Affidavit at paragraph 14 and annexure 2.
The wife’s assets may be summarised as follows:
1. Equity in Property A $321,000 - $331,000 2. Savings $26,589 Sub – total $347,589 – $357,589 3. Superannuation $ 51,995
The wife was not challenged about the assets she owned at the commencement of cohabitation. I accept the evidence of the wife in this regard.
Husband
In 2006 prior to the commencement of cohabitation, the husband sold a property in the (country omitted). The wife refers to this in her Trial Affidavit.[25] The husband does not refer to the sale of the property in his Trial Affidavit. The evidence in his Trial Affidavit is that he owned an endowment policy in the (country omitted), then worth approximately $30,000, which he then redeemed for $45,000.
[25] At paragraphs 16.
The husband was cross-examined about the sale of the property in the (country omitted). His evidence was that the equity realised from the sale of the property was applied towards his then liabilities, which included substantial credit card debt.
For reasons which were unexplained, after the sale of the property the husband obtained a loan of approximately £35,000 from (omitted) Bank, which he paid off during subsequent years. He did not produce any statements for this liability.
He additionally, had a substantial credit card debt, part of which remains outstanding ($6700) as the liability currently due to (omitted).
He was also cross-examined about the value of the endowment policy at the commencement of cohabitation. His evidence was that he estimated that in 2007, the endowment policy was worth between £12,000 and £15,000, however, he was unable to produce any documentary evidence to substantiate the alleged value.
Contributions during the marriage
In order to determine the respective contributions of the parties during the marriage, it is necessary to consider the respective contributions during specified periods. These times are as follows:
a)January 2007 to September 2010 (“the (country omitted) period”);
b)September 2010 to September 2012 (“the Property A period”);
c)September 2012 to October/December 2014 (“the Property B period”);
d)October/December 2014 to date (“the post separation period”).
The (country omitted) period
Upon the wife’s arrival in (country omitted) in (omitted) 2007, the husband and the wife commenced cohabitation in a rented apartment. The wife’s evidence was that she arranged for all of her furniture to be shipped from Australia to furnish the apartment. Under cross-examination the husband agreed with that evidence.
Both parties agreed that the parties equally shared in the rent and household bills. The mechanics were that bills and rental payments were directly debited from the husband’s account and the wife would reimburse his account.
During the (country omitted) period, the Property A property was leased for the sum of $460 per week.[26] The rent was more than adequate to pay the mortgage instalments and outgoings on the Property A property, and it is the wife’s evidence that she was not required to supplement these expenses from her income earned in (country omitted). In fact the surplus rental from the Property A property was deposited into a bank account.
[26] The wife's Trial Affidavit at paragraph 23.
The husband did not make any financial or other contribution towards the Property A property during this time.
Whilst the parties lived in (country omitted), the wife accumulated savings of approximately $25,000.[27] The husband did not accumulate any savings during this time and continued to pay instalments towards the (omitted) Bank loan
[27] The wife's Trial Affidavit at paragraph 22.
The husband conceded under cross-examination that he had credit card debts when the parties left (country omitted) and that debt is reflected in the amount currently outstanding to (omitted).
The Property A period
In September/October 2010 the parties moved from (country omitted) to Melbourne. The tenants of the Property A property vacated the property in about November 2010 and the parties thereafter moved into the property. They remained living in the Property A property until September 2012.
From November 2010 until November 2011 the parties each contributed to the mortgage repayments referable to the Property A property, and otherwise shared bills and household accounts equally. At that time the mortgage encumbering Property A was approximately $120,000.
Due to the modest nature of the mortgage encumbering the Property A property, each party paid approximately $400 per month towards the mortgage instalments. I note that whilst the wife lived in (country omitted), the property was leased for $460 per week. The mortgage payments made by the parties were less than half the rent received from the tenants of the property. Paragraph 34 of the husband’s Trial Affidavit sets out the payments made by him “referable to the real estate assets”, which amounts have been extracted from his (omitted) bank account between January 2011 and November 2011. These amounts are in accordance with the wife’s evidence.
In addition, the living expenses were shared roughly equally between the husband and the wife.
In August 2011 the parties entered into a contract to purchase the Property B property. The purchase price of the property was $982,500. In addition to the purchase price, the wife’s evidence was that there was stamp duty of approximately $48,000 and legal costs associated with the purchase.[28] The purchase of the Property B property settled in November 2011.
[28] The wife's Trial Affidavit at paragraphs 37.
In order to fund the purchase of the Property B property, the wife extended the mortgage secured against the Property A property from $120,000 to $309,000. This enabled the sum of $189,000 to be applied towards the purchase price of the Property B property and stamp duty. The husband and the wife borrowed a further $904,000 from the (omitted) Bank.[29] The net result of the borrowings secured against both properties is that the sum of $1,093,000 was borrowed by the parties to purchase the Property B property.
[29] The wife's Trial Affidavit paragraphs 38 and 39 and annexures 4 and 5.
The husband did not contribute any cash towards the purchase of the Property B property, although, his income may have been relevant to the capacity of the parties to service the mortgages. He did not adduce any evidence about whether the wife would or would not have been able to borrow the funds to purchase the Property B property, without relying on his income. This is a significant omission in the husband’s case, particularly as the wife has paid all mortgage instalments since February/March 2015, without any assistance from the husband.
Subsequent to the purchase of the Property B property, the property was tenanted. The rental income received was applied towards the instalments of the mortgage secured against the Property B and Property A properties. In addition, each of the husband and the wife contributed $1000 towards the mortgage instalments. This arrangement continued for approximately 9 months.[30]
The Property B period
[30] The wife's Trial Affidavit at paragraph 41.
Around September 2012, the husband and the wife vacated the Property A property and moved into the Property B property. Each party contributed equally to the repayments of the mortgage secured against the Property B property, which was approximately $1600 per month.
Additionally, each party contributed the sum of $450 per month towards household expenses, save that the husband did not make those contributions of $450 per month for February, March, April, May, June and July 2014.[31]
[31] The husband's affidavit sworn 13 July 2016 at paragraph 34.
It was the wife’s evidence, between September 2012 and December 2012 that the Property A property was not tenanted and that she paid the mortgage instalments referable to the Property A property, without any assistance from the husband.[32] She was not challenged in this regard. The mortgage secured against the Property A property included the additional funds which were borrowed and applied towards purchase of the Property B property.
[32] The wife's Trial Affidavit at paragraph 43.
In December 2012, the Property A property was tenanted and rent received was applied towards the mortgage secured against that property. Any excess rental was placed into the loan account for the Property B property mortgage. The wife also paid for rates, utilities and expenses related to the Property A property.
On 9 September 2013, the husband received a redundancy payment from his employer, (employer omitted), of $20,502. The sum was initially paid into the husband’s account, and then transferred in to the offset account for the Property B mortgage. On 4 October 2013, $10,000 was transferred from the offset account back into the husband’s personal (omitted) Bank account. The husband conceded under cross- examination that as he was not working at the time, he made two monthly payments of $1600 towards the mortgages and the monthly contribution of $450 towards utilities and living expenses. He applied the balance, $6350 for his own expenses until 30 November 2013.
The wife’s submissions are that the balance of the redundancy, approximately $10,000 was transferred back to the husband’s account. Under cross-examination, he conceded that $7000 had been transferred into his account, and there had been progressively smaller amounts transferred by him. He agreed with the proposition that the whole of the $20,000 redundancy had been transferred back into his account.
On 2 April 2014, the husband received the sum of approximately $46,177 when he redeemed the (country omitted) (omitted) Bank endowment policy, which he had at the commencement of the relationship.
He asserts “that he contributed those monies to the joint purposes of the applicant and me”.[33]
[33] The husband's Trial Affidavit at paragraph 25.
The wife asserts that she was not advised at the time that the husband had received this amount, and that she was unaware of how the money was spent until her lawyers were advised by the husband’s lawyers at court on 6 October 2015.
The husband was cross-examined about the circumstances surrounding the receipt of the $46,177. The funds were paid into the husband’s personal account. Counsel for the wife put to him that the majority of these funds were applied towards the husband’s monthly contributions towards the mortgage and living expenses and his own personal expenditure. The husband agreed with that proposition.
He did, however assert that he made additional contributions from this source, namely $1300 and $1320 for materials and $797, a payment to the (omitted). Although the husband produced his bank statements, there were no invoices produced by him to substantiate the amounts claimed.
I find that the husband did not make any additional contribution by virtue of his redundancy payment and the redemption of his endowment policy.
Contributions to improvements/renovations of the Property A and Property B properties
Both parties assert that they have made contributions to both properties, over and above the payment of mortgages and outgoings.
The wife asserts that additionally she has contributed towards extensive renovations of the Property A property. Her evidence was that upon returning to Australia from (country omitted) in October/November 2010, she applied approximately $25,000 towards the costs of renovations to the Property A property, the source of which was savings accumulated by her during her time in (country omitted). This evidence was not contradicted by the husband.
The husband asserts that he has also contributed amounts towards the maintenance and renovation of the Property A property and the Property B property. The husband asserted that he had contributed approximately $3500 to renovation costs of the Property A property and approximately $16,000 towards the renovation costs of the Property B property. The wife agreed that the husband had spent $4050 on roof and guttering repairs at the Property B property in April 2014.
The husband did not particularise the asserted amounts which he contributed, other than at paragraph 34 of his Trial Affidavit.[34] Paragraph 34 incorporates a table extracted from the husband’s bank statements.
[34] Affidavit of husband sworn 13 July 2016.
During the trial, the husband prepared very detailed and annotated notes from his bank statements and a summary of his alleged contributions which were not referred to in his affidavit material. On the last day of the trial, the husband sought to tender the annotated bank statements and the summary prepared by him. However, that application was subsequently abandoned. The documents were tendered by counsel for the wife as exhibit W7, in relation to the husband’s capacity to concentrate and prepare a complex document.
I find that the wife’s lump sum contribution towards the improvements/renovations of both properties was $25,000 and that the husband’s was significantly less, and not able to be quantified.
Contributions post separation (the post separation period)
The wife asserts that the parties separated under the one roof in October 2014 and the husband asserts that they separated under the one roof in December 2014.
On 19 February 2015, the husband made his final payment of $1600 towards the mortgage secured against the Property B property. On 1 March 2015, he made a final payment of $450, towards the parties joint living expenses.[35] Since then, the wife has been responsible for the payment of the mortgage and outgoings in relation to both properties. The husband did not challenge this evidence.
[35] The husband's Trial Affidavit at paragraph 34.
Orders were made by Her Honour, Judge Harland, on 6 October 2015, which required the husband to contribute 50% of the mortgage outgoings and repayments referable to the Property B property. The husband has not complied with those orders.
The husband was cross-examined about the dissipation of the endowment policy funds post separation. The husband agreed that as at 23 December 2014, he had the sum of $31,698.04 in his personal bank account.
The husband then embarked on a series of holidays. He was cross-examined about his bank statements and his whereabouts subsequent to separation. He agreed that on 3 January 2015 he was in (omitted), as his bank statement indicated a withdrawal in (omitted) on that day. He conceded that he had flown to (omitted) from Melbourne for a couple of days, prior to flying to (omitted) on 5 January 2015. He flew back to Melbourne on 6 January 2015. On 24 and 25 January 2015, he was in (omitted), having flown to (omitted) from Melbourne.
At the beginning of February 2015, the balance in the husband’s personal account was $22,335. On 11 February 2015 the husband purchased tickets to travel to (country omitted). His bank statements indicated that he made a number of purchases whilst away, including purchases totalling $2850, between 27 February 2015 and 2 March 2015. The husband’s evidence was that he hadn’t had a holiday for a couple of years.
The husband was retrenched from his employer, (employer omitted) in March 2015.
On 7 March 2015, the balance of the husband’s personal account was $18,035. On 5 March 2015. He purchased further airline tickets to travel to (country omitted) for another holiday, where he stayed in (country omitted).
On 23 March 2015, the husband holidayed to (omitted) for the weekend, and the following weekend travelled again to (omitted).
During April 2015, the husband spent considerable sums of money purchasing tickets and attending restaurants, including $1000 for a lunch at (omitted) restaurant.
The husband went on holidays in (omitted) for between 2½ to 3 weeks. Whilst in (omitted), the husband spent money at restaurants, including $350 at a (omitted).
I find that subsequent to December 2014 the husband had the capacity to continue to contribute to the mortgage and the joint living expenses. He conceded that as at 23 December 2015 he had approximately $32,000 in his personal bank account, and he was not retrenched until March 2015. Thereafter he was employed as a casual (occupation omitted) and earned some income, although not substantial. Instead of behaving in a financially responsible manner, he chose to engage in extensive travel and personal pursuits and leave the financial responsibilities to the wife. He also chose not to comply with orders of this court made on 6 October 2015, requiring him to pay 50% of the mortgage and outgoings referable to the Property B property.
Conclusion as to contribution
The well-known principles set out in Pierce & Pierce[36] and Norman[37] are relevant to determine the respective contributions in this matter.
[36] Pierce & Pierce [1998] FamCA 74.
[37] Norman v Norman [2010] FamCAFC 66.
At paragraph [26] of Norman, the Full Court said:
[26] In Cabbell and Cabbell [2009]FamCAFC205 this court said:
44. In Williams & Williams [2007]FamCA313 the Full court (Kay, Coleman and Stevenson JJ), after discussing conflicting cases determined in the New South Wales court of Appeal under the Property(Relationships)Act1984(NSW) which involved discussion of how initial contributions should be assessed in a property adjustment case under that legislation, said at para 26:
We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
At paragraph [28] of Pierce, the Full Court said:
[28] In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: see also Campo and Campo (Full Court, Sydney, 19 May 1995, unreported) at pp 21–2 of the joint judgment of Ellis, Lindenmayer and Finn JJ and Zahra and Zahra (Full Court, Sydney, 3 October 1996, unreported) per Ellis J at p 10.
In relation to respective contributions of the parties I find as follows:
a) The husband brought no assets into the relationship.
b) The husband had liabilities at the commencement of the relationship, however, on the evidence before me, I am unable to determine the extent of those liabilities. He continued to pay those liabilities during the relationship.
c) The wife brought substantial assets into the marriage, namely the assets referred to at paragraph 93 hereof, totalling approximately $400,000, inclusive of superannuation entitlements of $51,000.
d) The wife made financial contributions to the Property A property between January 2007 and October 2010.
e) The husband did not make any financial contribution to the Property A property between January 2007 and October 2010.
f) The financial contributions of each of the parties, whilst living in (country omitted), between January 2007 and October 2010, other than the wife’s contributions to the Property A property, were essentially contributions to support themselves and did not result in the acquisition, conservation or improvement of any asset.
g) The financial contributions of the husband to the Property A property between October 2010 and August 2011 were not significant when balanced against his occupation and enjoyment of the property.
h) The wife made a significant contribution to the acquisition of the Property B property, by increasing the mortgage secured against the Property A property, to enable a contribution towards the purchase price and stamp duty of the Property B property.
i) The husband did not make any direct lump-sum contribution towards the purchase price of the Property B property.
j) The parties would not have been able to purchase the Property B property, absent the wife’s significant equity in the Property A property.
k) Between November 2011 and February 2015, the parties contributions to the Property B mortgage and living expenses were approximately equal.
l) The husband has applied a significant proportion of the proceeds of his endowment policy, which he received in April 2014, towards his liability for mortgage and living expenses.
m) The husband has not made any additional lump-sum contribution to the assets of the parties by virtue of the redemption of the endowment policy.
n) The husband primarily retained for his own purposes the redundancy payment he received in September 2013 and did not make any additional lump-sum contributions to the assets of the parties by virtue of receipt of the redundancy.
o) Between December 2012 and February 2015, the wife additionally contributed the surplus rent from the Property A property, which was deposited into the offset account for the Property B mortgage.
p) From February 2015, the wife has made all contributions towards the mortgage of both the Property A and Property B properties.
q) From March 2015, the wife has made all contributions towards the outgoings of both the Property A and Property B properties.
r) From February 2015, the husband applied the majority of the balance of the endowment policy and his redundancy payment for his own purposes, including multiple overseas and interstate travel.
s)The husband did not comply with the orders of the 6 October 2015, requiring him to pay one half of the mortgage and living expenses referable to the Property B property.
It is abundantly clear that overall the contributions of the wife pursuant to s.79(4) (a) and (b) of the act are overwhelming, when compared to those of the husband. There is no question that the parties would never have been in a financial position to purchase the Property B property if the wife had not had her substantial equity in the Property A property. Additionally, the renting of the Property A property resulted in positive cash flow and the surplus rent was applied by the wife for the benefit of both parties. That contribution was in addition to the contribution of both parties to the mortgage and their living expenses. The husband also had the benefit of living in the Property A property between October 2010 and September 2012 and paying mortgage instalments which were substantially less than rent for a comparable property.
The wife has made a far greater financial and non-financial contribution than the husband. I assess the wife’s contributions at 80% and the husband’s at 20%.
The Section 79 (4)(d),(e),(f) and (g) and the Section 75(2) factors
Section 79(4)(d): the effect of any proposed order upon the earning capacity of either party to the marriage.
The orders I propose to make will not have any effect on the earning capacity of either party to the marriage.
Section 79(4)(e): the matters referred to in Section 75(2) so far as they are relevant
Section 75(2) The matters to be so taken into account are:
The wife is aged 45 years and is employed as a (occupation omitted). She earns income of approximately $85,000 per annum, excluding overtime and weekend work. She has been in employed in this capacity for many years.
The husband is aged 41 years and is unemployed. He ceased employment in March 2015, due to being made redundant. Subsequent to his redundancy, he was employed intermittently as a (occupation omitted). Prior to that he was employed as a (occupation omitted). The husband’s taxable income for 2014 was $53,000. The wife asserts that he has an earning capacity of at least $80,000 per annum. At the commencement of the relationship, and for many years prior to ceasing his employment, he was employed as a (occupation omitted).
There are no children of the relationship.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
The husband asserts that his mental health precludes him from currently working. He relied on the evidence of Dr T, psychiatrist, Dr A, psychiatrist, and Ms N, psychologist.
Evidence of Dr T, psychiatrist
Dr T swore an affidavit on 8 April 2016. Annexure 2 of his affidavit is a report prepared by him, dated 29 March 2016. The husband’s solicitor arranged for Dr T to psychiatrically examine the husband. Dr T stated the as follows:
“From the outset it was apparent that Mr Sinclair was quite unwell. He was severely depressed. Nonetheless, he was able to provide a cogent history, despite his depleted mental state.”[38]
“The prognosis is reasonable in his case provided appropriate psychiatric treatment occurs. Nevertheless, there are a number of risk factors. He is isolated, has few supports, impressed as fragile and describes some suicidal ideation.” [39]
“He has no work capacity for pre-injury, modified or suitable duties, pending such treatment.”[40]
[38] Report of Dr T, dated 29 March 2016. At page 1.
[39] Report of Dr T, dated 29 March 2016 at page 7.
[40] Report of Dr T, dated 29 March 2016 at page 7.
Dr T was cross-examined by counsel for the wife. He made the following concessions:
i)In addition to the limited affidavit material which was provided to him, he relied on the husband providing an accurate history in order to reach his diagnosis;
ii)It was possible that the husband had presented with an exaggeration of his symptoms;
iii)He had a number of personal issues, including the loss of his relationship with his son, struggling with employment and the breakdown of his relationship with the wife;
iv)His symptoms were likely to improve with appropriate treatment and the conclusion of the current litigation;
v)Whilst he gave evidence that he did not think it would be presently safe for the husband to work as a (occupation omitted) because of perceived safety risks, it may be possible for him to work in the (omitted) industry;
vi)Social contact and a return to some kind of employment would be a positive for the husband, as it would provide structure and social contact social contact.
Counsel for the wife put to Dr T that there were a number of inconsistencies in the husband’s evidence and the report, which he provided to Dr T. Specifically, Dr T reported that :
“He is a committee member and regular player at the (hobby omitted) club in (omitted). He hasn’t been there for a year, however.”
The evidence of the husband was that he had played (hobby omitted) during the previous season, which concluded in March 2016, on five or six occasions, and that he had also participated in the current (omitted) season. He also remained a committee member of the (omitted) club.
In response, Dr T’s evidence was that he had noted that the husband had not been there for a year and his general impression was that the husband had not played (hobby omitted) for a year. This evidence is relevant as to the husband’s alleged social isolation.
Dr T refers to the husband’s travel, as travel “for two weeks at one stage (after he had finished and work in order to prepare himself and rest prior to starting a course)”.
The husband did not tell Dr T of his numerous interstate and overseas holidays, which he undertook from January 2015 until September 2015. These are referred to at paragraphs 141 to 148 hereof, and may be summarised as follows:
| Time | Destinations |
| January 2015 | (omitted) |
| February 2015 | (country omitted) |
| March 2015 | (country omitted), (omitted), (omitted) |
| May/June 2015 | (omitted) |
| August 2015 | (omitted) |
| September 2015 | (omitted) |
The evidence of travel is relevant to the husband’s alleged social isolation and the veracity of his history provided to Dr T.
Once appraised of the evidence about the husband’s travel Dr T appeared almost incredulous and conceded that the evidence of the husband’s travel:
“would contrast with any sense of him being a very subdued and socially withdrawn person”
Dr T’s initial diagnosis of the husband needs to be considered in the context of the husband’s failure to disclose extremely relevant information and history and the concessions made by Dr T whilst being cross-examined.
I find that Dr T was a candid, truthful and highly professional witness.
Evidence of Dr A, psychiatrist
The wife’s solicitor arranged for Dr A to psychiatrically examine the husband. On 3 June 2016 a letter of instruction was forwarded to Dr A by the wife’s solicitor, which enclosed a copy of Dr T’s report, a copy of the wife’s affidavit dated 27 July 2015 and the husband’s affidavit dated 7 October 2015.[41]
[41] Exhibit W 4.
Dr A prepared a report dated 28 July 2016.[42] He was subpoenaed to give evidence by the husband’s solicitor and was cross-examined by the wife’s counsel.
[42] Exhibit W 4.
Dr A diagnosed the husband with chronic major depressive disorder with anxiety. In terms of his employment capacity,[43] Dr A opined :
“His psychiatric condition adversely affects his employment capacity and current capacity to work and his capacity to work in the short term. In the medium term, I expect the condition to resolve and his work capacity to improve along with it. The features of his condition which interfere with his capacity to work at a (sic) his previously high level include a constant anxiety, depression, the most the time, low energy with naps during the day and poor concentration. He is unable to undertake work as a (occupation omitted), where crucial decisions are likely to be required regarding (duties omitted). He is unfit to work in any capacity for more than four hours a day, five days a week. He is not fit to work in any role that requires intense concentration over a prolonged period. Having said that, I assist Mr Sinclair for a period of over 100 minutes and he maintained his concentration throughout that time. He was alert and attended well to the interview. There is a disjunction between his reported level of concentration and his observed level of concentration.”
[43] Report of Dr A, paragraph 6 at page 6.
Dr A was cross-examined by counsel for the wife. He made the following concessions :
i)In addition to the limited affidavit material which was provided to him, he relied on the husband providing an accurate history in order to reach his diagnosis;
ii)He had a natural bias to accept what he is told, unless contradicted;
iii)He found the husband to be overly involved in the manner in which he described his history;
iv)Was genuinely surprised that there was evidence of husband playing (hobby omitted) and attending (omitted) matches, as he was under the impression that the only enjoyment of the husband was walking his dog. That evidence was contradictory to what he had been told by the husband;
v)The husband’s ability to collate and tag his bank statements over a protracted period of hours was not in keeping with the husband’s reporting of his impaired concentration and undermined the history provided by the husband that his concentration was “shit”;
vi)If the findings of fact undermine the history provided by the husband, he would happily walk away from the diagnosis, if he had not been told the truth;
vii)The husband’s prognosis at the conclusion of the proceedings was positive and his opinion was based on the husband’s personality type, his lack of past psychiatric history, the husband’s likelihood of response to treatment and the likelihood of reduction of exposure to psychological stress;
viii)The husband’s travel between January 2015 and September 2015 as referred to in paragraph 166 hereof, was inconsistent with the history provided by the husband and would impact on his diagnosis;
ix)The husband had a capacity to work modified duties which would not require such intense levels of concentration. The husband was clearly intelligent, had previous experience as a (occupation omitted) and would be able to readily acquire new skills in a broad range of employment possibilities. Many of his employment skills would be transferable to a range of employment options and such employment could include (omitted) work, which the husband had previous experience.
I find that Dr A was a candid, truthful and highly professional witness.
Evidence of Ms N, psychologist
Ms N swore an affidavit on 1 August 2016. Annexure 1 of her affidavit is a report prepared by her dated 1 August 2016. Ms N is a clinical psychologist who has treated the husband pursuant to a mental health plan. She has practised as a clinical psychologist for approximately 3 years.
The husband’s solicitors issued a subpoena to Ms N to attend court to give evidence.[44] Ms N objected to the subpoena and in particular, objected to production of her notes of consultations with the husband. A subpoena objection hearing was listed on 25 October 2016, the first day of the resumption of the trial. She attended on that day, however, she did not produce her notes. The notes were finally produced on the second adjourned date of the trial.
[44] Subpoena filed 30 August 2016.
The husband was referred to Ms N by his GP, Dr I, and first consulted Ms N on 6 May 2016. Her evidence was that she obtained a history from the husband prior to commencing to treat him. In August 2015, she was requested by the husband’s practitioner to provide a report, and in order to do so, was also provided with a copy of the affidavit of the husband dated 5 July 2016. She also obtained a more comprehensive history from the husband prior to undertaking her report. She has not been provided with any affidavit material filed by the wife in this proceeding. She conceded all information on which she relied was provided by the husband.
Prior to preparation of her report, the husband consulted her on eight occasions between 6 May 2016 and 1 August 2016. Subsequent to the preparation of the report, the husband consulted her on 5 August 2016, 8 August 2016, 22 August 2016, 9 September 2016 and 12 September 2016. Due to what she referred to as a “conflict of interest,” she has declined to provide further clinical psychological services to the husband.
Her diagnosis of the husband is that “he meets the criteria for a generalised anxiety disorder with major depressive disorder (moderate).” Ms N maintained that she was qualified to make such a diagnosis.
In relation to the husband’s capacity to work, she was of the opinion that the husband would:
“Benefit from returning to a part-time role that is relevant to his field, however, with reduced responsibility to his previous functioning. This will increase his professional confidence and future job opportunity”[45]
“May benefit from part-time study in his field, to up skill and increase job opportunity relevant to his previous line of work.”[46]
“May return to full-time work after the above has been addressed, which will most likely take at least one year.”[47]
[45] Report of Ms N, psychologist, dated 1 August 2016 at paragraph 9 on page 4.
[46] Ibid at paragraph 10 on page 4.
[47] Ibid at paragraph 11 on page 4.
Her evidence under cross-examination was extremely defensive of the husband and seemed to accept the husband’s history as accurate. When put to her that the husband’s history provided to her about his social isolation was entirely inconsistent with his evidence of travel, participation in sport and entertaining friends and restaurants, she was defensive of the husband. She accepted as fact the husband’s allegations that he was a victim of domestic violence and that the wife had been abusive to him, verbally, financially and physically.
She did not agree, unlike Dr T and Dr A, that the husband’s recounting of his lack of capacity to concentrate was inconsistent with the preparation of tabulation of the bank statements and his capacity to consistently give evidence throughout the court proceedings. Her response was that the husband was preoccupied with the court proceedings and that people can have moments of concentration.
She became overly enmeshed with the husband and that her therapeutic role was compromised as a result of that. Her evidence was that, during the later consultations with the husband, she had even provided him with information about legal services and that her actions were outside what a psychologist would do and had led to a conflict of interest.
I accept that Ms N was well-meaning and was attempting to positively advocate for the husband, however, I do not find her to be an objective witness. Where her evidence differs from that of Dr T and Dr A, I prefer the evidence of Dr T and Dr A.
After considering the evidence of the husband and the three expert witnesses, I find that the husband has a capacity for employment, albeit not necessarily as a (occupation omitted). The uncontradicted evidence is that the husband has experience as a (occupation omitted) and has undertaken this work in the past, although it is not appealing to him. Dr A concurred that work in a (omitted) industry, and possibly (omitted) work would be an appropriate area of employment for him. Dr A was of the opinion that the husband’s many skills would be easily transferable to other areas of employment. I note Ms N’s evidence that the husband would benefit from returning to at least part-time employment and that if the husband complied with her recommendations as to future treatment and undertook some part-time study, the husband could return to full full-time work in about a year.
There was no direct evidence as to the future income the husband would be likely to earn in a different role, save for evidence of his past earnings as a (occupation omitted). I am satisfied that the husband is unable to return to full-time work as a (occupation omitted) in the immediate future, however, there are other immediate employment alternatives available to him which would enable him to earn an income to support himself.
The husband’s counsel, in his opening, submitted that the husband was suffering from situational anxiety and depression and that he was unlikely to work for approximately one year, and that his return to work would need to be a gradual process.
I find that the husband’s mental health prognosis is optimistic and favourable and will no doubt be positively affected by the conclusion of the proceedings. That will provide the impetus for him to seek employment commensurate with his skills and experience.
Prior to the husband ceasing employment, the income, earning capacity of each of the husband and the wife was similar. Once the husband returns to full-time employment, the parties’ incomes are likely to be similar. I find that any future disparity in the party’s income earning capacity, according to the evidence and the submissions of the husband’s counsel, would not likely exceed a period of 12 months.
(b) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
There are no children of the relationship.
(c) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
The commitments of each of the parties that are necessary to support himself/herself are set out in their respective Financial Statements.
Neither party was cross-examined about the expenses claimed in the Financial Statements. The husband was cross-examined about the expenses claimed in paragraphs 21 and 23 of his Financial Statement[48] whereby he claimed payment of the mortgages referable to the Property B and the Property A properties. He conceded that he was not paying the amounts claimed, totalling $1039 per week, and he had not done so since February 2015.
(ii) a child or another person that the party has a duty to maintain; and
[48] Sworn 12 July 2016.
The husband has a son from a previous relationship. There was no evidence that the husband had any responsibility or obligation to presently contribute towards his son, nor was there evidence that he had done so since 2007, when he stopped contributing towards the private school fees of his son.
(e) the responsibilities of either party to support any other person; and
There was no evidence that either party had responsibilities to support any other person.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
Neither party is currently eligible for a pension, allowance or benefit. There was no evidence that either party would be eligible in the future.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
The orders which I intend to make for division of the property will result in each party receiving a lump sum payment. Both parties will be able to adequately rehouse themselves, either by purchasing another property or renting. The wife will continue with her present employment and her income sufficient to enable her to adequately support herself. I find that the husband is likely to obtain at least part-time employment, which will increase to full-time employment in the next year or so. His income would be sufficient to significantly contribute to his support. Both parties will be sufficiently financially secure to enable them to enjoy a reasonable standard of living.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
The husband’s evidence was that he had undertaken a course of study in (omitted) in August 2015, however he had not completed the assignment/assessment work to obtain the relevant qualifications. The duration of the course was about a week, together with time required to complete the assignment/assessment work. There was no evidence that this particular course of study would immediately result in the husband obtaining employment. The husband is a highly qualified and competent (occupation omitted) who has held responsible and well-paid positions in the past. According to Dr A, his skills are readily transferable to other areas of employment. I do not find that it is necessary for the husband to undertake any particular course to immediately assist him to find employment.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
This is not a relevant consideration.
(j) (j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
At the commencement of the relationship the wife was employed as a (occupation omitted), as she is today. There is no evidence the husband has contributed in any manner whatsoever to the wife’s income or earing capacity.
In terms of contribution to the property and financial resources of the wife, the findings as to party’s respective contributions to the asset pool are referred to at paragraphs 152 to 154 hereof.
(k) (k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
The party’s relationship was for just under eight years. The duration of the relationship has not affected the earning capacity of either party, save that the husband alleges he has been a victim of domestic violence perpetrated by the wife. This is discussed at paragraphs 209 to 216 hereof.
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
This is not a relevant consideration.
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
Neither party is cohabiting with another person.
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
I am satisfied that the orders I intend to make under s.79 are sufficient to enable the husband to adequately maintain himself.
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
This is not a relevant consideration.
(na) 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; and
This is not a relevant factor.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
The husband asserts that he has been the victim of domestic violence allegedly perpetrated by the wife, which has contributed to his mental health issues. He alleges that his earning capacity has been substantially affected as a result of domestic violence.
The husband’s allegations of domestic violence have not been particularised in his affidavit material. There was very limited cross-examination of the wife by the husband’s counsel about domestic violence. In fact, the wife was primarily cross-examined about her allegations, that the husband had been abusive towards her.
The husband alleged that the wife drinks to excess and then becomes violent. The evidence that the husband sought to lead in relation to the wife’s alcohol purchase did not demonstrate anything other than she bought alcohol over the Christmas/New Year period.
There was no objective or contemporaneous evidence or corroboration of the husband’s claims by any independent witnesses, except that the husband did report to Ms N that the wife had been violent. However, that did not occur until May 2016, a significant time after separation. The husband did report to Dr T and Dr A that he was the victim of domestic violence, however both psychiatrists relied entirely on the husband’s version of events. Given the deficiencies in the husband’s account provided to both psychiatrists, I have significant doubts about the veracity of the husband’s information about this issue.
Counsel for the wife in her final submissions, pointed to a number of the husband’s actions being entirely inconsistent with his alleged fear of the wife and her abusive conduct. These may be summarised as follows:
i)The husband, although maintaining fear of the wife and her conduct did not vacate the Property B property in January 2015 when he was financially able to do so, but instead elected to embark on a number of holidays and lifestyle choices between January and September 2015.
ii)The removal of $27,000 from the joint account by the husband and then returning to live under the same roof as the wife is entirely inconsistent with any alleged fear of the wife, as she would be at her most angry following the removal of the money from the joint account.
iii)The husband did not obtain any intervention orders against the wife, except on 28 July 2016, during the course of the proceedings.
iv)The narrative in the husband’s application for an intervention order contains lies by omission.
The husband did not seek to conduct his case as a “Kennon” [49] argument, and submit that his contributions were made more onerous by the wife’s alleged conduct.
[49] Kennon & Kennon (1997) 22 Fam LR 1
I do not find that the husband was subjected to domestic violence by the wife as alleged by him, and that the wife’s conduct resulted in the husband’s claimed mental health problems. I do however, find that the relationship was acrimonious and at times volatile and that both parties were responsible for the unpleasant and unacceptable behaviour towards each other.
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
This is not a relevant factor
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
This is not a relevant factor.
Is it just and equitable to alter the parties’ property interests
Both parties, in their respective Application and Response have sought orders adjusting their respective interests in property.
As a result of the findings made relating to contributions and future needs, I am satisfied it is just and equitable to make orders adjusting property between the parties.
Adjustment of interests
Taking into consideration the above matters, including the withdrawal of the husband of $27,000 from the (omitted) account in July 2015, I am satisfied that there should be need a small adjustment of 3% in favour of the husband pursuant to s.75 (2) factors. I have already determined that the respective percentage contributions of the parties are 80% in favour of the wife and 20% in favour of the husband.
On the basis of the property pool, I have determined the wife will retain/receive non-superannuation assets of $1,024,000 and the husband will retain/receive non-superannuation assets of $303,600. Both amounts are of course, subject to the sale price of the Property A property. The husband will be solely responsible for his personal liabilities.
This will be achieved by both parties receiving a share of the proceeds of sale of the Property A property, and a payment to the husband, upon him vacating the Property B property. The wife will retain the Property B property. Each party will be responsible for their respective legal fees.
The husband seeks to retain the Property B property, despite no evidence that he has the capacity to refinance the mortgage secured against the property. On 12 August 2016, I specifically requested the husband to make enquiries about the possibility of him retaining the Property B property. When the matter returned on 25 October 2016, the husband’s evidence about enquiries made with the bank, and his attempts to ascertain whether this would be possible was vague and highly unsatisfactory. The extent of his enquiries was a telephone call to “(omitted)” of the (omitted) Bank, which had occurred the previous day. He had not submitted an application to the bank and had not provided it with any financial information. On the evidence before me, I find that there is no realistic possibility that the husband has the capacity to refinance the existing mortgage on the Property B property.
At paragraph 24 hereof, I refer to the respective evidence of the parties as to their living at the Property B property. As referred to in this judgment, the husband has failed to be candid in his evidence, particularly when reporting his travel and social activities to both Dr T and Dr A. These were crucial omissions. I prefer the evidence of the wife in relation to the living arrangements in the Property B property. I have determined that she should be able to retain her home.
The wife, in her final submissions seeks to retain the Property B property. Since February 2015 she has managed to pay the mortgage instalments on both properties, without assistance from the husband, albeit she has received rental income from the Property A property. She continues to be in employment and receive a reasonable salary and has demonstrated a history of financial responsibility, since the purchase of the Property A property.
She also seeks the Property A property be sold and the nett proceeds of the sale be divided between the parties. The wife will receive a substantial sum from the sale of the Property A property. That will assist her to refinance and/or reduce the mortgage on the Property B property, to enable her to retain the property. I find that on the evidence, the wife is able to refinance the Property B property and therefore I intend to make an order that she retain the Property B property.
In relation to superannuation assets, the current division of superannuation is approximately 82% in favour of the wife and 18% in favour of the husband. The adjustment required for superannuation to be divided in the same proportion as the non-superannuation assets would require a small payment from the wife’s superannuation to the husband’s superannuation. I do not propose to make any adjustment of the superannuation entitlements of the parties. I note that at the commencement of the relationship the uncontested evidence was that the wife’s superannuation entitlements were $51,995, which is approximately 30% of the wife’s existing superannuation entitlements.
The division of assets I have determined assumes that the Property A property will sell for the amount of the valuation. If the property sells for more than the current valuation, each party will benefit and if it sells for less, both parties will share the “loss”. The division is summarised as follows:
Wife’s Assets
| Estimated proceeds of sale of Property A property (based on Bank account valuation) | $434,100 |
| Property B property (based on valuation) | $1,425,000 |
| Bank account | $15,000 |
| Sub total | $1,874,100 |
| Less liabilities Mortgage on Property B property | ($850,000) |
| Nett non superannuation assets | $1,024,000 |
| Wife’s superannuation | $163,085 |
| Total assets | $1,187,185 |
Husband’s Assets
| Estimated proceeds of sale of Property A ( based on valuation) | $275,900 |
| Payment upon vacating Property B | $30,000 |
| Sub total | $303,600 |
| Husband’s superannuation plus undisclosed (country omitted) pension | $36,800 |
| Total assets | $340,400 |
| Less liabilities (omitted) group overdrawn (omitted) account (omitted) Ltd ((country omitted)) | $6000 |
| Nett assets | $325,570 |
| Proceeds of sale of Property A to be held in trust pending accurate calculation of CGT | $100,000 |
Spousal Maintenance
In his opening submissions counsel for the husband, sought future spousal maintenance for the husband. The amount sought was not quantified, and neither was the period specified, save that when asked his counsel submitted that the husband would require spousal maintenance until receipt of a lump sum property settlement.
There were no submissions made about spousal maintenance, in the event the husband was able to retain the Property B property, and make a lump sum payment to the wife. This was the husband’s preferred position.
Section 72 of the Act sets out the requirements for an order for spousal maintenance s.72 provides as follows:
Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
(2) The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
The first matter which must be answered in order to determine the rights of a party to spousal maintenance, in this case the husband, is whether or not he has a demonstrated that he is unable to support himself adequately by reason of one of the factors set out in s.72(1) of the act.
In Brown and Brown (2007) FLC 93-316 at [161] the Full Court summarised the principles to be applied. These include the following:
a)The idea that “adequate” means a subsistence level has been firmly rejected;
b)Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties standard of living may have to be lower if financial resources are insufficient to maintain the standard;
c)It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
Having regard to the findings referred to at paragraphs 188 to 191 hereof, in relation to the husband’s capacity for employment, I am not satisfied that the husband is unable to support himself adequately by reason of the factors set out in s.72(1)(b) and (c)of the Act.
The orders I propose to make will include an immediate payment to the husband of $30,000, which will enable him to secure accommodation, once he vacates the Property B property and to assist with his support, if necessary, pending obtaining employment. I am confident that the husband has the capacity to obtain part-time employment to support himself pending the sale of the Property A property. I do however propose to make an order that the wife pay the mortgage on both the Property A and Property B properties until the settlement of the sale of the Property A property and the transfer and refinance of the Property B property.
In any event, it is apparent from the Financial Statement of the wife that if she is required to continue to pay the mortgage of both the Property A and the Property B property, pending sale or settlement of the refinance of the Property B property, she clearly does not have the capacity to meet any order for payment of maintenance to the husband.
The submission of the husband that he seeks to retain the Property B property and assume a mortgage is entirely inconsistent with his claim for spousal maintenance.
In her Financial Statement[50] the wife deposes to an income, including rent received from the Property A property of $2590 per week. She deposes to expenses of $2408.88 per week. At paragraph 32 of the Financial Statement she estimates her food and all other ancillary expenses at $350 per week.
[50] Financial Statement of wife sworn 27 July 2016.
By comparison, the husband in his Financial Statement51 deposes to a nil income. At Part B paragraph B he deposes to total personal expenditure of $1,282 per week. This amount includes $754 per week for mortgage payments to the (omitted) Bank for the Property B property 52 and $285 per week for mortgage payments to the (omitted) Bank for the Property A property. 53 The husband is not currently paying these amounts and has not done so since February 2015. They do not form part of his expenses. At part N, he estimates his average weekly expenses at $495 per week. The amount claimed by the wife is extremely modest, when compared to the amount claimed by the husband, particularly as the wife is required to transport herself to and from work each day, when as at the date of swearing the Financial Statement the husband was unemployed.
The husband’s financial statement does not disclose any additional liabilities which might have been incurred to enable the husband to support himself at the level claimed by him in his financial statement. Accordingly I do not accept the veracity of the husband’s financial statement.
For the reasons set out in the preceding paragraphs, I do not propose to make any order for spousal maintenance in favour of the husband.
I certify that the preceding two hundred and forty (240) paragraphs are a true copy of the reasons for judgment of Judge Williams
Date: 21 December 2016
Key Legal Topics
Areas of Law
-
Family Law
-
Property Law
Legal Concepts
-
Injunction
-
Costs
-
Remedies
-
Consent
-
Jurisdiction
0
6
2