Palsgrove and Palsgrove
[2011] FamCA 765
FAMILY COURT OF AUSTRALIA
| PALSGROVE & PALSGROVE | [2011] FamCA 765 |
| FAMILY LAW – PROPERTY SETTLEMENT – Assets and Liabilities; Contributions – Significant contribution by way of damages award made during the marriage; Adjustments – Where the child of the marriage lives primarily with the wife – Where the child of the marriage required significant support; Just and equitable – Superannuation. |
| Family Law Act 1975 (Cth) Sections 75 & 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355; In the Marriage of Omacini (2005) 33 Fam LR 134; Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Shewring (1987) l2 Fam LR 139; In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797; In the Marriage of Coghlan (2004) 33 Fam LR 414; In the Marriage of Clauson (1995) 18 Fam LR 693 at 711; [1995] FLC 92-595; Griffiths and Kerkemeyer 139 CLR 161; In the Marriage of Pierce (1998) 24 Fam LR 377; In the Marriage of Robb (1994) 18 Fam LR 489; In the Marriage of DJM and JLM (1998) 23 Fam LR 396; In the Marriage of Ferraro (1992) 16 Fam LR 1; In the Marriage of Aleksovski (1996) FLC 92-705..
| APPLICANT: | Mr Palsgrove |
| RESPONDENT: | Ms Palsgrove |
| FILE NUMBER: | SYC | 4883 | Of | 2008 |
| DATE DELIVERED: | 15 September 2011 |
| PLACE DELIVERED: | Parramatta |
| JUDGMENT OF: | Loughnan J |
PLACE HEARD: Sydney
| HEARING DATE: | 6 September 2011 |
REPRESENTATION
COUNSEL FOR THE APPLICANT HUSBAND: | Mr Ladopoulos |
SOLICITOR FOR THE APPLICANT: | M G O’Callaghan & Associates |
COUNSEL FOR THE RESPONDENT WIFE: | Mr Kearney | |
SOLICITOR FOR THE RESPONDENT | Katie Smith Solicitor | |
Orders
Within 56 days of the date of these Orders, the wife:
1.1. Take all steps and do all acts and things and make all payments of principal and interest and costs necessary to obtain the discharge of the mortgage registered number … (“the mortgage”) held by B Ltd over the former matrimonial home situated at and known as C Street, D Suburb in the State of New South Wales and being the whole of the land contained in Certificate of Title Folio Identifier … (“the former matrimonial home”); and
1.2. Pay to the husband’s solicitors M. G. O’Callaghan & Associates, on behalf of the husband, the sum of $37,489.25 by way of adjustment of property rights.
Upon the above Order having been complied with, the husband execute all documents and do all things necessary to transfer the whole of his right title and interest in the former matrimonial home to the wife.
That, in the event that the wife does not comply with Order 1 above, the husband and the wife:
3.1. Forthwith upon that default, take all necessary steps and execute all necessary documents to cause the former matrimonial home to be sold by public auction and in particular:
3.1.1.Place the former matrimonial home with a licensed real estate agent as agreed between the husband and the wife, or failing agreement, with a licensed real estate agent as appointed by the then President of the Real Estate Institute of New South Wales (“the Agent/Auctioneer”) for the sale of the former matrimonial home by public auction at the earliest possible date;
3.1.2.Execute all documents requested by the Agent/Auctioneer for the sale of the former matrimonial home at a reserve price to be agreed between the husband and the wife;
3.1.3.If no reserve price is agreed, request the Agent/Auctioneer to recommend a reserve price to be placed on the former matrimonial home for the purpose of the auction sale and accept such reserve price;
3.1.4.Pay to the Agent/Auctioneer any sums requested for commission and advertising expenses in relation to the auction;
3.1.5.Co-operate in every way with the Agent/Auctioneer in relation to the auction of the former matrimonial home; and
3.1.6.Attend at the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached, and unless they agree to the contrary in writing, accept the advice of the Agent/Auctioneer as to the acceptance of a price less than the reserve price.
3.2. Do all acts and things necessary to procure that upon the sale of the former matrimonial home the proceeds of sale be paid in the following manner and priority:
3.2.1.in payment of the amount required to discharge the mortgage over the former matrimonial home;
3.2.2.in payment of the Agent/Auctioneer’s commission and auction expenses (if any) due on the sale;
3.2.3.in payment of legal costs on sale;
3.2.4.in payment of 88 per cent of the remainder to the wife; and
3.2.5.in payment of the balance to the husband.
Pending her compliance with Order 1 or in default of that compliance, pending the settlement of the sale of the property, the wife shall pay the mortgage instalments and other outgoings on the property as and when they fall due and shall indemnify the husband and keep him indemnified in relation to those payments.
Except as these Orders provide to the contrary:
5.1.The husband is solely entitled, as against the wife, to all other assets and resources presently in his possession or control including any superannuation benefits and any moneys held in bank accounts in his name; and
5.2.The wife is solely entitled, as against the husband, to all other assets and resources presently in her possession or control including any superannuation benefits and any moneys held in bank accounts in her name.
In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the Orders made herein, the Registrar of the Court be appointed pursuant to s 106A to execute the deed or instrument in the name of such party and to do all other acts and things necessary to give validity and operation to the deed or instrument.
IT IS NOTED that publication of this judgment under the pseudonym Palsgrove & Palsgrove has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4883 of 2008
| Mr Palsgrove |
Applicant
And
| Ms Palsgrove |
Respondent
REASONS FOR JUDGMENT
Mr and Ms Palsgrove started living together in 1998 and separated in July 2008. They cannot agree on a settlement of their property. Although they are divorced, for convenience I will refer to them as the husband and wife.
Applications
The husband seeks orders in terms incorporated in the Case Summary document provided in his case as follows:
1. That within three (3) calendar months of the date of these orders the Wife:
(a)take all steps and do all acts and things and make all payments of principal and interest and costs necessary to obtain the discharge of the mortgage registered number … (“the mortgage”) held by [B Limited] over the former matrimonial home situated at and known as [C Street, D Suburb] in the State of New South Wales and being the whole of the land contained in Certificate of Title Folio Identifier … (“the former matrimonial home”); and
(b)pay to the Husband’s solicitors M. G. O’Callaghan & Associates, on behalf of the Husband, the sum of $78,000.00 by way of adjustment of property rights.
2. That upon the above order having been complied with, the Husband execute all documents and do all things necessary to transfer the whole of his right title and interest in the former matrimonial home to the Wife.
3. That, in the event that the Wife has not complied with Order 1 above, the Husband and the Wife:
(a)forthwith take all necessary steps and execute all necessary documents to cause the former matrimonial home to be sold by public auction and in particular:
(i)place the former matrimonial home with a licensed real estate agent as agreed between the Husband and the Wife, or failing agreement, with a licensed real estate agent as appointed by the then President of the Real Estate Institute of New South Wales (“the Agent/Auctioneer”) for the sale of the former matrimonial home by public auction at the earliest possible date;
(ii)execute all documents requested by the Agent/Auctioneer for the sale of the former matrimonial home at a reserve price to be agreed between the Husband and the Wife;
(iii)if no reserve price is agreed, request the Agent/Auctioneer to recommend a reserve price to be placed on the former matrimonial home for the purpose of the auction sale and accept such reserve price;
(iv)pay to the Agent/Auctioneer any sums requested for commission and advertising expenses in relation to the auction;
(v)co-operate in every way with the Agent/Auctioneer in relation to the auction of the former matrimonial home; and
(vi)attend at the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached and accept the advice of the Agent/Auctioneer as to the acceptance of a price less than the reserve price.
(b)do all acts and things necessary to procure that upon the sale of the former matrimonial home the proceeds of sale be paid in the following manner and priority:
(i)in payment of the amount required to discharge the mortgage over the former matrimonial home;
(ii)in payment of the Agent/Auctioneer’s commission and auction expenses (if any) due on the sale;
(iii)in payment of legal costs on sale;
(iv)in payment to the Husband of the sum of:
(1) $78,000.00; plus
(2) interest at the rate stipulated by Order 40 rule 1 of the Family Law Rules 1984 on the amount remaining unpaid pursuant to Order 1 such interest to be calculated on the amount outstanding on a daily basis from the date due to the date of payment in full; and
(v)in payment of the balance to the Wife.
4. That except as these orders provide to the contrary:
(a)The Husband is solely entitled, as against the Wife, to all other assets and resources presently in his possession or control including any superannuation benefits and any moneys held in bank accounts in his name; and
(b)The Wife is solely entitled, as against the Husband, to all other assets and resources presently in her possession or control including any superannuation benefits and any moneys held in bank accounts in her name.
5. That in the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made herein, the Registrar of the Court be appointed pursuant to s. 106A to execute the deed or instrument in the name of such party and to do all other acts and things necessary to give validity and operation to the deed or instrument.
According to the wife’s Case Outline Document, she seeks orders as follows:
1. That within fifty six (56) days of the date of these Orders:
1.1 the wife do all things and sign all documents necessary to discharge all liability of the husband in respect of the mortgage secured on the title of the property known as and situate at C Street, D Suburb being the whole of the land contained in certificate of title folio identifier 17/226648 [the D Suburb property]; and,
1.2 the husband do all things and sign all documents necessary to transfer to the wife all of his right, title and interest in and to the D Suburb property.
2.Save as provided in paragraph 1, each of the husband and wife be and hereby are declared to be solely entitled to all property and financial resources in their respective names, possession and/or control or to which they are each entitled.
3.That if either party refuses or neglects to sign any document necessary to implement these orders, that a registrar sign the necessary document on behalf of the defaulting party pursuant to section 106A of the Family Law Act and the defaulting party shall pay the other party's costs on obtaining the registrar's signature on the necessary document on a lawyer/client basis.
4.That the husband pay the wife’s costs of and incidental to these proceedings.
Documents read
The husband relied on the following documents:
Sworn / Affirmed
Filed
Affidavit of husband
31 August 2011
2 September 2011
Husband’s Financial Statement
8 June 2010
9 June 2010
The wife relied on the following documents:
Sworn / Affirmed
Filed
Affidavit of Wife
23 November 2010
24 November 2010
Affidavit of Wife
17 August 2011
18 August 2011
Wife’s Financial Statement
17 August 2011
18 August 2011
Short history
The husband was born in 1963 and, as at the date of hearing, he was 48 years of age. The wife was born in 1966 and as at the date of hearing, she was 44 years of age. The parties commenced cohabitating on a full-time basis in 1999 and married in 2002. They separated on 14 July 2008 and their divorce became final on 19 February 2011.
Children
There is one child of the marriage, E who was born in 2003 and as at the date of the hearing was 7 years of age;
The husband has two children from a previous relationship. They are Mr F who is currently 18 years of age and G who is currently 15 years of age.
Disputed facts
The parties did not formally identify the matters in dispute. The main issues seemed to be:
Pool
Whether certain debts should be included or partially included in identifying the relevant net pool of assets;
The legal fees paid by the parties from joint funds.Contributions
Were contributions equal or 90 per cent by the wife?· An assessment of the initial contributions of the parties;
· The treatment of the wife’s compensation payments from 2002 on the balance of contributions during cohabitation;
· The balance of contributions made after separation.
Adjustments
It is conceded by the husband that if contributions were equal there should be a 15 per cent adjustment to the wife.· The respective financial circumstances of the parties;
· The physical and financial impact on the wife of E’s care;
· The impact of the wife’s contributions to Mr F and G.
Background facts
10.The background facts come largely from an agreed chronology. To that I have added information from the Court record, such as various interim and other orders made in the course of the proceedings.
11.In early 1998, the parties commenced living together intermittently.
12.In around 1998, the husband sold vacant land at H Suburb. The sale was pursuant to a property settlement with his former wife. He said he received net proceeds of sale of $68,000 and that he applied $12,000 toward a I Bank loan, $5,000.00 toward his Bank Card account, $9,000.00 to purchase a motor cycle and the balance toward joint living expenses.
13.On 16 November 1998, the wife commenced full time employment at the J Pty Ltd in Suburb K.
14.The husband says that the parties commenced cohabitation on permanent basis at L Town in early 1999. He says he had a utility motor vehicle, a SUV, tools, personal effects, superannuation worth $25,000 and some savings.
15.On 9 February 1999, the wife injured her back while at work. She was issued with medical certificates on 30 April 1999 and 24 May 1999 recording lifting, standing and sitting restrictions.
16.The wife says that the parties commenced cohabitating in July 1999 at M Street, L Town. At the commencement of cohabitation, the wife says she had $7,000 in savings, a small car worth $12,000, household contents worth $5,000 and superannuation entitlements worth $4,223. She says that the husband had a SUV, some superannuation entitlements and, by way of liabilities, credit card debt and a car loan.
17.The parties separated for several months during 1999.
18.In December 1999, the parties reconciled.
19.In 2000, the husband commenced employment at N Pty Ltd, O Town and the parties lived in rent-free accommodation provided by the husband’s employer.
20.In January 2000, the wife ceased working. She was issued with a medical certificate recording lifting, standing and sitting restrictions and stating that she was unable to drive in city traffic or to travel by public transport.
21.On 1 February 2000, the wife was issued with a medical certificate recording lifting, standing and sitting restrictions and stating that she was permitted to travel as a passenger in a taxi and to travel via train.
22.In March 2000, the husband was retrenched from his employment at N Pty Ltd. The parties subsequently moved to P Pty Ltd where they remained for a period of approximately 12 months.
23.On 12 April 2000, the wife was issued with a medical certificate recording lifting, standing and sitting restrictions. It was assessed that the wife was able to travel for a period of two hours per day.
24.In July 2000, the wife was formally terminated from her employment.
25.On 8 November 2000, the wife was issued with a medical certificate, again recording lifting, standing and sitting restrictions.
26.In March 2001, the parties moved to a rental premises at 20 Mimosa Avenue, Saratoga where they remained for approximately 18 months.
27.In late 2001, whilst at home, the husband severed a muscle in his arm on a broken window pane when closing a window.
28.In 2002, the husband says he commenced employment at Q Pty Ltd.
29.In July 2002, the wife’s personal injury proceedings were concluded. It was determined at arbitration that the wife receive a sum of $493,893.61. From this amount, the wife refunded Workers Compensation Insurance in the amounts of $34,477.87 and $58,334.88 and paid legal costs of $58,614.53. The wife received an initial compensation payment of $320,000 net.
30.On 30 July 2002, the wife deposited $300,000 into a two-month term deposit with the R Building Society.
31.In September 2002, the parties purchased a property at C Street, D Suburb for $382,000. They resided at this property until final separation. The wife paid a deposit of $38,200, stamp duty in the amount of $12,684, legal fees in the amount of $1,309 and a further amount of approximately $245,840 toward the balance. A mortgage of $100,000 was provided by S Home Loans.
32.In October 2002, the wife received a further $10,358.28 from her compensation entitlement.
33.As indicated above, the parties were married on 14 November 2002.
34.In 2003, the parties’ daughter E was born.
35.In 2004, the wife underwent surgery at T Hospital. The wife’s parents attended the parties’ household to care for Mr F, G and H.
36.On 28 February 2005, the parties redrew on their home loan to purchase an outboard motor for a speed boat.
37.In 2006, the wife underwent further surgery at T Hospital. Her parents again assisted in caring for Mr F, G and H.
38.On 18 June 2006, the wife applied the remaining $20,400 from her compensation payment toward the parties’ mortgage.
39.In around September 2006, G stopped spending time at the parties’ home. She had previously been spending some weekends and half of school holidays with the parties.
40.On 19 October 2006, the husband drew $14,000 from the mortgage to purchase his current motor vehicle.
41.On 14 July 2008, the parties separated on a final basis. The wife moved into her parents’ home at Suburb U with E. At the time of separation, the mortgage balance was $76,000.
42.On 5 February 2008, an Apprehended Domestic Violence Order was entered against the husband for the protection of the wife in the Town V Local Court for a period of two years.
43.On 21 August 2008, the husband commenced proceedings in the Family Court seeking parenting and financial orders.
44.On 25 November 2008, I made the following orders:
1.That not later than 9 January 2009, the husband vacate the property at [C Street, D Suburb] in the State of New South Wales and that thereafter he remain away from that property and give quiet enjoyment of that property to the wife.
2.That as and from today’s date pending further order, the wife shall maintain the instalments on the mortgage secured on that property
3.Leave to the parties to restore the proceedings to the list today or on a later date in relation to the personalty that may be removed with the husband in addition to his personal property and his clothing, and in relation to any other issues.
45.In January 2009 the wife and E moved back into former matrimonial home.
46.In 2009, the husband commenced employment with the W Pty Ltd in project management.
47.On 9 January 2009, the husband ceased making payments on the mortgage.
48.In May 2010, the husband was made redundant from his employment at W Pty Ltd. He thereafter ceased paying child support to the wife.
49.On 4 June 2010, Rose J made final consent orders with respect to parenting issues as follows:
1. That the parents continue to have equal shared parental responsibility for the child of the marriage [E] born 14 October 2003 (hereinafter referred to as “E”).
2.That [E] shall live with the mother.
3.That [E] shall spend substantial and significant time with the father as follows:
(a) On alternate weekends commencing on 5 June 2010 from 9.00am until 5.00pm on Saturdays and from 9.00am to 5.00pm on Sundays.
(b) Once the father has attended upon [Dr X] in accordance with paragraph 5 herein from 9.00am on Saturday until 5.00pm on Sunday in alternate weeks on five occasions.
(c)After the five occasions referred to in paragraph 3(b) above have taken place, on each alternate weekend from 5.00pm on Friday until 5.00pm on Sunday.
(d)During the school holiday period commencing at the end of Term 4 in 2010:
(i) From 5.00pm on 17 December until 9.00am on 20 December.
(ii) From 5.00pm on 24 December 2010 until 5.00pm on 25 December 2010.
(iii) From 5.00pm on 7 January 2011 until 9.00am on 10 January 2011.
(iv) From 5.00pm on 21 January 2011 until 9.00am on 25 January 2011.
(e)From the commencement of Term 1 in 2011 as follows:
(i) During school terms in each alternate week from after school on Friday until the start of school on the following Monday commencing on:
A.The second Friday of each term in 2011 and all subsequent odd numbered years.
B.The first Friday of each term in 2012 and all subsequent even numbered years.
(ii)During school holidays at the ends of Terms 1, 2 and 3 in each year as follows:
A.In 2011 and all subsequent odd numbered years from 9.00am on the second Saturday of the holidays until the commencement of school in the next term.
B.In 2012 and all subsequent even numbered years, from after school on the last day of the term until 9am on the second Saturday of the holidays.
(iii)During the school holiday period at the end of Term 4 in 2011:
A.From noon on 26 December 2011 until noon on 9 January 2012.
B.From noon on 23 January 2012 until 5pm on 29 January 2012.
(iv)Unless otherwise agreed in writing, during the school holiday period at the end of Term 4:
A.In 2012 and each subsequent even numbered year, from 10.00am on the first day of the holiday until 10.00am 21 days later.
B.In 2013 and each subsequent odd numbered year, from 10.00am on the 21st day of the holidays until 10.00am two days before the first day of school.
(v)In 2013 and each subsequent odd numbered year from 5.00pm on 24 December until 5.00pm on 25 December.
(vi) If [E’s] birthday is on a school day and she is not otherwise spending time with the father pursuant to these Orders from after school until 6.00pm.
(vii) If [E’s] birthday is on a non school day and she is not already spending time with her father pursuant these Orders from 4.00pm until 6.00pm.
(viii)From 9.00am to 5.00pm on Father’s Day.
(ix) From 9.00am to 5.00pm on one further day each year provided that the father has given one month’s notice in writing to the mother.
4.That [E’s] time with the father pursuant to paragraph 3 above shall be suspended in order for [E] to spend time with the mother as follows:
(a)On Mother’s Day from 9.00am to 5.00pm.
(b)In 2012 and each subsequent even numbered year from 5.00pm 24 December until 5.00pm on 25 December.
(c)On the first Sunday in each December from 9.00am to 5.00pm.
4A.That in the event that [E] is spending a full day with the father on the day of her birthday, [E] shall spend the following time with the mother:
(a)If it is a school day from after school until 6.00pm.
(b)If it is not a school day from 4.00pm until 6.00pm.
5.That the father shall forthwith make arrangements to attend upon [Dr X] for the purpose of being fully appraised as to [E’s] medical condition and the responses which may be required in the event of [E’s] suffering any form of seizure.
6.That the mother shall forthwith give or sign any consent or other document required to allow [Dr X] to apprise the father of these matters.
6A.That the father is to authorise [Dr X] to inform the mother that he has consulted [Dr X] in accordance with paragraph 5 herein.
7.That in the event that the father is unable to personally supervise [E] then he shall ensure that the person who has the care of [E] has a senior first aid certificate or has also attended upon [Dr X].
8.That each party shall advise the other of any medication that may be prescribed for [E] and the other party shall ensure that such mediation is administered to [E].
9.That the father shall provide the independent children’s lawyer with written confirmation that he attended upon [Dr X] in accordance with paragraph 5 herein.
10.That each party shall forthwith complete an appropriate parenting after separation course and provide the independent children’s lawyer with written confirmation of same.
11.That the father will ensure that [E] is not left in the sole care of the child [G].
12.That the mother shall ensure that E is not left in the sole care of [Mr Y].
13.That the mother shall forthwith sign the appropriate authority at [E’s] school and any school which [E] shall attend, to authorise the school to forward to the father copies of [E’s] school reports and any other document ordinarily provided to parents.
14.That the mother shall ensure that the father’s details are provided to any extracurricular activities [E] becomes involved in and she shall ensure the father is provided with copies of any relevant newsletter, calendars or other documents ordinarily provided to parents.
15.That both parties shall be at liberty to attend any of [E’s] school sport or cultural events and, in the event that both parties are in attendance, they shall use their best endeavours to be polite and civil to each other.
16.That each party is restrained from discussing any allegation made in these proceedings with [E] and shall use their best endeavours to ensure that no other person does so.
17.That each party is restrained by injunction from showing [E] any document pertaining to the proceedings and shall use their best endeavours to ensure that no other person does do.
18.That change-overs that do not occur at the conclusion of school or the commencement of school shall be inside the McDonalds restaurant at [Suburb Z].
19.That each party shall contact the other as soon as practicable regarding any medical or other emergency concerning [E].
20.That each party shall be restrained from denigrating the other to or in the presence or hearing of [E] and shall use their best endeavours to ensure that no other person does so.
21.That each party shall keep the other informed of his/her landline and/or mobile telephone number(s) and notify the other parent of any change to a telephone number of address.
22.That the order for the appointment of the independent children’s lawyer shall continue for a further period of 12 months.
23.That the parties shall pay the costs of the independent children’s lawyer as follows, unless their liability to pay these costs is waived by Legal Aid NSW:
(a)as to the wife the sum of $4,031.00;
(b)as to the husband the sum of $4,231.00.
24.That the sums referred to paragraph 23 shall be paid within six months of the date of these Orders.
25.That the father shall pay the further sum of $687.50 by instalments of $100.00 per month commencing 1 August 2010 to Legal Aid NSW.
26.That when [E] is with the father during school holidays the mother may have telephone communication with her once per week.
27.That the father may have telephone communication with [E] once per week.
28.That to the extent that is practicable in the circumstances, and except in emergencies, the parents shall take [E] to the medical practice called ‘The Surgery’, [AA Street, Suburb Z], for non urgent medical attention.
29.That each party shall keep the other informed of any medial appointments they may make for [E].
30.That the parties shall continue to use the communication book to keep each other informed about [E’s] activities and medical or related issues and shall ensure that the communication book moves between the 2 households with [E].
DECLARATION
31.The Court declares that these Orders are inconsistent with some of the provisions of the Apprehended Violence Order made at [Town V] Local Court on 5 August 2008 in which the mother and [E] are named as protected persons and in which the father is named as defendant.
50.On 4 June 2010, Rose J also made orders with respect to the financial proceedings as follows:
1.That a Judicial Settlement Conference will take place at 9.30am on Friday, 11 June 2010.
2.That each party file and serve an updated financial statement on or before 4.00pm, 9 June 2010.
3.That the wife’s legal representatives cause a case outline to be lodged by email with the Associate to Justice Rose and served on or before 4.00pm, 9 June 2010.
4.That in the event of agreement not being reached by the parties at the end of the Judicial Settlement Conference then the proceedings will be listed before a Judicial Registrar a date to be fixed.
51.On 11 June 2010 Rose J made a further order regarding financial proceedings between the parties following a Judicial Settlement Conference, as follows:
1.That the proceedings are stood over before Rose J to a date and time to be fixed.
Notations:
A.The solicitors for the parties will be urgently seeking instructions for the purpose of requesting a local real estate agent on behalf of each of them, namely two real estate agents, to provide an appraisal of the current market value of the former matrimonial home and for a response to be received by 18 June 2010.
B.The solicitors for the parties will liaise with the Associate to Rose J by email by 5.00pm, 16 June 2010 for the purpose of indicating Notation A has been undertaken and whether or not 9.15am or 9.30am on either 21 or 22 June 2010 are suitable dates and times for the continuation of the Judicial Settlement Conference.
52.On 15 July 2010, I made the following orders:
1.The solicitors for the parties forthwith join in requesting the President of the Australian Property Institute to nominate a valuer to value the former matrimonial home at [C Street, D Suburb] in the State of New South Wales and that thereupon the solicitors join in instructing the nominated valuer and in the first instance that they each be responsible for payment of one half of the costs of that valuation.
2.The operation of order one is stayed for 7 days from this date to allow the parties an opportunity to otherwise agree on such a valuer.
3.Not later than 15 November 2010 each of the parties is to file and serve any updating evidence in chief, including if necessary an updated Financial Statement.
4.In the event that either party contends that further expert evidence is required on an issue other than the value of the former matrimonial home, that solicitor is to forthwith restore the proceedings to the list on giving 7 days notice to the associate to Justice Loughnan and to the other party.
5.The proceedings are adjourned to a date to be settled between the solicitors and the associate to Justice Loughnan, being a date on or after 22 November 2010 for a readiness check and if appropriate, for the allocation of hearing dates.
53.On 3 August 2010, BB Pty Ltd commenced trading. The husband is the sole director, shareholder and employee of the company.
54.On 19 April 2011 I made the following orders:
1.That these proceedings are adjourned to a final hearing the date of which is to be settled between the Associate to Justice Loughnan and the parties’ legal representatives with an estimated hearing time of one day.
2.That each party file and serve any updating affidavit material and any updating Financial Statement if necessary not later than five (5) weeks prior to the date fixed for the final hearing.
3.That not later than six weeks prior to the commencement of the hearing the parties file all affidavit evidence in chief and if necessary updating financial statements.
4.That not later than three (3) working days prior to the commencement of the hearing the parties provide by email to the associate to Justice Loughnan:
a) an agreed chronology;
b) an agreed balance sheet;
c)case outline documents setting out, if not already contained in a filed document, a minute of the orders sought in the final hearing; and,
d)a brief outline of the arguments to be made under Part VIII in relation to the orders sought.
5.That by 10am on the first morning of the trial the legal representatives join issue in relation to objections to evidence.
6.That leave is granted to either party to restore the proceedings to the list on short notice to the Court and the other party in the event they become aware of any matter which would prevent the hearing commencing and concluding on the date fixed for final hearing.
Credit and Submissions
The evidence of the witnesses
55.The only witnesses called for cross-examination were the parties. There are few issues that fall to be determined solely by reference to the uncorroborated testimony of the parties. To that extent credit is not a significant issue. To the extent that it is relevant, I prefer the evidence of the wife.
56.The husband was cross-examined at some length. There were at least two instances where his answers on a topic ran the gamut of ‘no’, ‘yes’, ‘I don’t know’ in short order. For example that occurred in relation to his discovery or production of documents in relation to the H Suburb property. The husband was asked if the wife could keep E for the $68 per week he paid in child support at one time and he immediately answered “easily”. Within a minute or so he agreed with learned counsel for the wife that he himself could not keep G for $70 per week and that $68 per week was not sufficient to pay for all of E expenses. There are discrepancies between the oral and written evidence of the husband. For example he agreed during cross-examination that he owned the H Suburb property at the start of the marriage, subject to a family law settlement with his former wife. He was then taken to his financial questionnaire where it is asserted that at the commencement of cohabitation he had the net proceeds of sale of the H Suburb property.
57.The wife’s cross-examination was very brief and therefore the bulk of her evidence is unchallenged. Her answers were clipped and unequivocal. There was a suggestion at times during cross-examination that her responses were more emphatic than the facts justified. That was distracting but as I say, her evidence was largely unchallenged.
Submissions
58.The written submissions on behalf of the husband are:
G. Contribution Based Entitlement
1. The Husband contributed at the commencement of the marriage:
(a) A vacant block of land which was sold at about the time of the commencement of the marriage, with net proceeds of $68,000 (of which $17,000 was used to pay out his other debts at the time). The balance of $51,000 was contributed to the parties finances;
(b) Utility motor vehicle worth $2,500;
(c) SUV worth $9,000;
(d) Tools of trade worth $2,000;
(e) Surfboard, guitar, furniture and personal effects worth $4,500;
(f) $25,000 in superannuation entitlements with CC Pty Ltd;
(g) $6,000.00 in term savings account.
2. The Husband contributed during the marriage:
(a) his earnings towards the payment of mortgages, groceries, household expenses and outgoings relating to the former matrimonial homes, petrol, entertainment and outing expenses;
(b) by carrying out landscaping and other improvements to the former matrimonial homes at D Suburb;
(c) by carrying regular maintenance and repairs to the former matrimonial home;
(d) by carrying regular maintenance and repairs to the parties’ motor vehicles;
(e) by assisting the Wife with household tasks and the care of the child of the marriage up until the Wife’s back injury in 1999;
(f) by carrying out the majority of the household tasks and the care of the child of the marriage since the Wife’s back injury in 1999.
3. Since separation the Husband has contributed:
(a) By paying child support as assessed in respect of the child of the marriage.
(b) from his earnings towards the mortgage repayments and outgoings relating to the former matrimonial home from the period of separation until January 2009 when the Wife moved into the former matrimonial home and he moved into rented premises
(c) the Wife has had the benefit of living in the former matrimonial home since January 2009, whilst the Husband has had to pay rent.
H. Other Matters
1. The Wife has the primary care of the child of the marriage.
2. The Husband has a duty to support his children from his previous relationship who live with him full time and are full-time students.
3. Under the orders sought by the husband, superannuation will constitute almost one-third of the net value of property retained by him.
I. Conclusion
1. Applicant Husband is entitled to 50 per cent of the property of the relationship on a contribution basis.
2. An adjustment of 15 per cent to in favour of the Wife for the matters set out in Item H above is appropriate.
59.By way of oral argument, it was submitted for the husband that the personal debts of each of the parties should be all included or all excluded. It was submitted that much of the wife’s award should be seen as a joint contribution. For example, that should apply to the elements of the award for past and future economic loss and the Griffiths and Kerkemeyer[1] allowances. It is conceded that the award cannot be ignored but that in any event, the contributions over 10 years of cohabitation should be seen as equal or nearly equal. It was submitted that if that finding is made on contributions, there should then be a 15 per cent adjustment to the wife. It was submitted that note should be taken of the fact that the husband’s settlement will include more superannuation than that of the wife and that he should be credited with recognising the wife’s need for accessible assets. It is submitted that it would be unjust to leave the husband with what he has and his superannuation.
[1] 139 CLR 161.
60.The written submissions on behalf of the wife were as follows:
Asset pool
1.The wife does not accept that the husband has made a full and frank disclosure of his financial position, including as to the income, assets and financial resources available to him. The following outline and propositions as to outcome need be considered in this context.
Initial contributions
2.The parties commenced cohabitation in July 1999 and were married … 2002.
3.The wife contends that at this time the wife had savings of $7,000, a motor vehicle which the husband concedes had a value of $3,000, personalty which the husband concedes had a value of $2,500 and superannuation entitlements worth $4,223 [W#15, 17; H#9].
4.The wife concedes that at this time the husband owned a motor vehicle (subject to a liability), had superannuation entitlements and credit card liabilities [W#18, 19].
Contributions during the relationship
5.In July 2002 the wife received a net amount of $320,000 as a result of a personal injuries verdict, receiving a further payment of $10,358.28 in October 2002 [W#28, 29]. These funds were applied towards:
5.1the purchase of the property at [C Street, D Suburb] [the D Suburb property] in an amount of approximately $298,033 [W#33, 34]; and,
5.2 towards the [D Suburb] mortgage.
6.Otherwise during the relationship each of the husband and wife worked on varying bases. The husband’s employment was sporadic and the wife did not work following January 2000 as a result of the injuries sustained by her in February 1999 [W#26].
7.The parties’ purchase of the [D Suburb] property was also funded by a mortgage advance of $100,000 [W#33] and the balance owing at separation was some $76,000 [W#43] following:
7.1repayments having been made on the mortgage from October 2002 until July 2008 [W#44];
7.2the payment by the wife of the balance of her personal injury money to the mortgage on 18 June 2006 in the amount of $20,400 [W#43]; and,
7.2redraws having been made on the mortgage from time to time by the husband including for the purchase of an outboard motor for a speedboat and a motor vehicle ($14,000), both of which items were retained by the husband following separation [W#43].
8.During the relationship the wife was the primary carer for [E] and, additionally (as referred to below) had a significant role in caring for each of the husband’s children of a prior relationship.
Following separation
9.From July 2008 until January 2009 the husband enjoyed sole occupation of the [D Suburb] property to the exclusion of the wife and [E], making variable repayments to the mortgage facility until October 2008 but not thereafter (and also making redraws) [#45].
10.From January 2009, and pursuant to order of this Court, the wife and [E] have lived in the [D Suburb] property and:
10.1 been solely responsible for payment of the mortgage [W#47]; and,
10.2had to attend to necessary repairs to the property in respect of damage to it whilst the husband had the use of the property [W#49, 50].
11.The wife has had the primary care of [E], who has significant health issues (see below).
12.The husband has provided no child support in respect of [E] since May 2010 [W#64].
13.Subject to the composition and value of the assets to be divided between the parties the wife contends that the there ought be a contribution finding of 90 per cent in favour of the wife.
Section 75(2)
14.The husband is 48 years and the wife 45 years of age. No evidence is adduced as to any relevant health issue on the part of the husband.
15.The wife has significant health issues which resulted in receipt by her of the personal injuries verdict [W#27] identified above and which preclude her obtaining employment [W#68].
16.The husband has made no real disclosure in relation to his earnings, save to depose to his conducting a business.
17.The parties’ earnings and earning capacities will be largely unaffected by the determination in these proceedings.
18.The wife retains the primary care of [E] (7 years).
19.[E] suffers from a series of health difficulties, including aspergers syndrome, epilepsy and related behavioural and social problems [W#61ff].
20.The wife has not and is unlikely to receive child support from the husband.
21.The parties’ respective superannuation entitlements have been included in the net assets identified above. The wife has no capacity to continue to accumulate superannuation entitlements.
22.During the relationship the wife made significant contributions in caring for the husband’s two children of a prior relationship, including during the period that [Mr F] lived with the parties [W#12ff].
23.On the basis of the contribution finding advanced by the wife, and the net assets identified, an adjustment in favour of the wife pursuant to section 75(2) of 10 per cent is conceded.
24.This conclusion is not, however, static and is subject to proper disclosure as to the husband’s financial circumstances. A departure from the contribution finding sought on behalf of the wife may require modification to the proposition advanced in relation to section 75(2).
25.It is recognised that, notwithstanding the above conclusion, the orders sought by the wife seek an outcome more favourable to the husband.
61.The oral submissions on behalf of the wife were to the effect that, subject to an allowance for the legal fees paid with those funds, her debt to her father should be allowed as a joint debt as it was applied to her necessary expenses. It was submitted however that the husband had not properly accounted for the payment of his legal fees and that no inferences should be made in his favour in those circumstances. It was submitted that the wife made the main contribution. It was submitted that there is no evidence of a relevant imbalance of initial contributions because the husband was not able to produce evidence of owning the H Suburb property at the commencement of cohabitation nor could he establish that he had any savings or proceeds from the sale of that property. It was submitted that on the authorities, the award in excess of $320,000 should be seen as the wife’s contribution. Further, by reference to authorities such as In the Marriage of Pierce,[2] it was argued that the court would have regard not only to the fact of the award but also to how it was applied. It was submitted that there would not be any significant asset pool had it not been for that award.
[2] (1998) 24 Fam LR 377.
62.As to any adjustments to be made, I was referred to the wife’s inability to work and the physical and financial impost associated with her care of E, who suffers from several significant conditions. Reference was made to the fact that the husband has paid no child support since July 2010 and it was submitted that it is unlikely that he will pay any significant support. Finally, there is the fact that the wife made contributions to Mr F and G and they should be treated as is described in In the Marriage of Robb.[3] It was submitted that the wife’s case argues for most of the assets but in fact she only seeks to retain the house, subject to the existing mortgage, together with the other assets already in her possession. The submission is that she can justify more than 90 per cent of the pool but seeks something less than that.
[3] (1994) 18 Fam LR 489.
The approach in proceedings under Section 79
63.The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79, involving four inter-related steps. First, I make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determinations and identify orders that are just and equitable in all the circumstances of the case.[4]
[4] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370.
64.There is no mention of steps in s 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.[5]
[5] In the Marriage of Hickey above.
The property of the parties at the date of the hearing
65.The Court is required to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.
66.There are circumstances whereby assets can be included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c)In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
67.The parties settled an agreed balance sheet. On the basis of their agreement I find that the relevant assets are:
ASSETS
VALUE C Street, D Suburb $380,000 Husband’s I Bank bank account 638461 $52 Husband’s I Bank bank business account $663 Husband’s utility motor vehicle $2,000 Husband’s interest in BB Pty Limited $7,500 Motor boat (in Husband’s possession) $2,000 Sailing dinghy (in Husband’s possession) $900 Husband’s tools of trade $1,500 Husband’s furniture and contents $3,500 Wife’s DD bank account $143 Wife’s DD bank saver account $159 Wife’s EE Pty Ltd shares – 1303 @ $2.96 $3,857 Wife’s FF Pty Ltd shares – 1200 @ $1.47 $1,764 Wife’s motor vehicle $1,000 Wife’s contents $500 Total Gross Assets $405,538.00
68.The superannuation is agreed as follows:
Superannuation Value CC Pty Ltd – husband $34,120 GG Super – husband $1,110 HH Super – husband $2,091 II Supper – wife $4,326 JJ Super – wife $2,516 Total Gross Assets $44,163.00
Liabilities:
69.The mortgage debt is agreed. As to the disputed issues:
Wife’s KK Bank Visa Card
70.The wife puts the debt at $5,259. The husband puts it at $1,300. There was no cross-examination of the wife nor were there any submissions made, in relation to this item. I will allow the unchallenged evidence of the wife.
Husband’s Personal Loan
71.The husband puts the debt at $12,800. The evidence about this item is that the husband approached the I Bank in July 2008. He told the bank that he required funds for the purpose of “travel & holidays”. In cross-examination he said that he borrowed the money largely for anticipated legal fees. He retained Conditsis & Associates for the purposes of these proceedings in August 2008. It is the husband’s evidence that he has paid (at least) of the order of $32,200 in legal fees. Of that sum, it is the husband’s case that he paid Conditsis & Associates $15,000 on 26 August 2008.[6] In those circumstances it is appropriate to ignore the debt, but on the basis that $12,800 of the paid legal fees is not read back into the list of assets. That accords with the approach outlined in In the Marriage of DJM and JLM (above).
Husband’s S Credit Card
[6] Various documents - exhibit 4.
72.The husband said he owes $5,900 on this account. As is outlined above, the husband concedes that he has paid a total of about $32,200 in legal fees. $12,800 is accounted for by the I Bank loan referred to above. There is no evidence from the husband about the source of funds used to pay the balance of the legal fees. I was not asked to read the rest of the paid fees, back into the balance sheet. Presumably that is because the husband was not able to say that the $32,200 was the total of the moneys he applied to his legal fees. Nevertheless, I will not include this credit card debt in the debts going to make up the net assets of the parties for the purposes of these proceedings. Again, that accords with the approach identified in In the Marriage of DJM and JLM.
Wife’s debt to Mr Y
73.The wife puts the debt at $35,000. She was not challenged as to the fact or the amount of the debt. It is the wife’s evidence that $24,000 of the loan was applied to her legal costs.[7] In those circumstances and in accordance with the approach referred to above, $24,000 of the debt will be excluded from the relevant list of liabilities. In relation to the balance of the advance - $11,000, it was the wife’s evidence that she applied $5,000 to mortgage instalments after separation and the remaining $6,000 to living her expenses during that period, including the expenses of E. The wife noted that those expenses did not include food, as her food was supplied by her parents. The wife was not challenged in relation to her general expenses, or as to the application of the borrowed funds. As is referred to above, the general approach is to take account of the assets and debts as at the date of the hearing. It follows that funds expended in the normal course of living expenses will not normally be added back. As to the mortgage payments, the parties directly benefit from those payments because, but for those payments, the mortgage would be greater. I will include the debt at $11, 000.
[7] Costs advice letter dated 6 September 2011 – exhibit 4.
74.The relevant liabilities are:
DEBTS | VALUE |
| Mortgage on the D Suburb property | $67,000 |
| Wife’s debt to Mr Y | $11,000 |
| Total | $78,000.00 |
Net assets
75.The net assets have a value of $371,701 ($449,701 - $78,000). Of that, $44,163 is in the form of superannuation and $327,538 is in the form of non-superannuation assets.
Financial Resources
76.There is no evidence about financial resources.
Contributions
77.The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[8] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties.[9]
[8] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1.
[9] In the Marriage of Shewring (1987) l2 Fam LR 139.
78.As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes, an asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
79.In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, regardless of whether or not a splitting order is sought in those proceedings. The Full Court suggests that:
… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.
80.Here the parties did not isolate superannuation interests for the purposes of applying s 79(4) to the assets. If I understand the counsel of the Full Court correctly, I am permitted to take the same approach.
Contributions
Section 79(4)(a) Contributions
81.Financial contributions, both direct and indirect were made by each of the parties.
82.At the commencement of cohabitation the husband owned:
· A utility motor vehicle;
· A SUV motor vehicle;
· Tools of trade
· A surf board, guitar, and other personal furniture and equipment;
· Superannuation with CC Pty Ltd; and
· A term account with a balance of $6,000.
83.The husband variously said that at the commencement of cohabitation, in addition to those assets, he had an undivided share in a block of land at H Suburb or an account containing a sum of money representing the net proceeds of the sale of the H Suburb property after various debts were paid, including a distribution to the co-owner of the property. In his affidavit he says that the land was sold in October 1998 and that after sale costs, he received $68,000. He says that from that sum he paid a debt to the I Bank of $12,000 and a bankcard bill of $5,000. It is his evidence that the parties applied $9,000 to the purchase of a motor cycle and paid the balance into a bank account. In his Financial Questionnaire[10] filed 5 November 2009 the husband stated that at the commencement of cohabitation, he had an account with I Bank containing $35,000, the two vehicles, $23,400 in superannuation and $13,400 in debts. Later, in the same questionnaire, he states that during cohabitation “Property sold at [H Suburb] $65,000”. It is not possible to make specific findings about these matters.
[10] Exhibit 5.
84.At the commencement of cohabitation the wife had an account with the KK Bank with a balance of $7,000, a 1995 small car and household contents and whitegoods worth $5,000. She had two superannuation policies – JJ Super at $4,095 and II Super at $228. The husband concedes that the small car had a value of $3,000 and that the wife’s furniture and effects had a value of $2,500. The wife had no debts.
85.Given the problems with the husband’s evidence, it is not possible to be sure about the initial financial contributions. Doing the best I can, it is probable that the husband’s initial contribution exceeded those of the wife.
86.As to paid employment, at the commencement of cohabitation the husband worked as a sub-contractor shopfitter. He was at the same time completing a hospitality course. After completing the course he began working at the LL Pty Ltd. In 2000 he took up a position at the N Pty Ltd, O Town. Part of his remuneration was accommodation on the premises. He left that position towards the end of 2000 and returned to work for MM Pty Ltd in about 2001. In 2002 he started work for Q Pty Ltd and as a sub-contractor at a joinery shop. He was promoted and worked in management. In 2009 the husband began as a manager with W Pty Ltd but was made redundant in May 2010. The husband was out of paid employment for periods but the evidence does not permit a finding as to the duration of those periods.
87.At the commencement of cohabitation the wife worked at the J Pty Ltd at Suburb K. She commenced there in November 1998. On 9 February 1999 she hurt herself when she slipped while walking down stairs at her workplace. She had 2 days off and returned to work with reduced duties for the next 2 to 3 months. Thereafter she was assessed as fit to undertake work for 4 hours a day, 2 days a week. She ceased paid employment in January 2000 and was formally terminated by her employers in July 2000. The wife has not had paid employment since that time.
88.As a result of her accident, the wife commenced proceedings in the NSW Supreme Court and the matter was determined by arbitration with an award of $493,893.61. From the gross award, the wife was paid $320,000 in July 2002 and a further $10,358.28 in October 2002.
Section 79(4)(b) contributions
89.This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
90.The husband maintained the garden and undertook plumbing and odd jobs. He erected a deck at the front of the property, with sandstone pavers and a stainless steel barrier and balustrade. He landscaped all gardens in the backyard, planted sandstone garden beds and erected a flagpole. He built an aviary, created vegetable gardens and planted fruit trees. I gather that he installed insulation in the roof of the property, built and installed laundry cupboards and bench tops in the garage. He painted the exterior of the home. The husband maintained the vehicles and replaced door locks. In the home he maintained door locks, taps, replaced light globes and maintained the walls and the property.
91.His maintenance of door locks ceased after separation. Indeed he caused and did not have repaired, damage to the D Suburb property including to a window, door locks and a security door.
Section 79(4)(c) contributions
92.This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage. Contributions to Mr F and G are excluded from consideration under this provision although the wife’s contributions to them will be dealt with under s 75(2)(o) below.[11]
[11] In the Marriage of Robb (1994) 18 Fam LR 489.
93.Although the impression from the husband’s affidavit is to the contrary, he agreed in the course of cross-examination that his was largely the role of breadwinner and that the wife was the primary carer for the child and the primary homemaker throughout the marriage. Although there is little evidence from her about her contributions during cohabitation as a parent to E or as homemaker, during her cross-examination, the wife confirmed that notwithstanding her physical restrictions, she was able to undertake homemaker tasks. She said that she was significantly restricted after her accident but for about 2 years had significant home help through her compensation. After her rehabilitation she made what adjustments were needed and got on with the homemaker tasks. She gave the example of dividing the laundry load so as to make it possible for her to undertake that task.
94.Since separation the parent and homemaker load has largely remained with the wife. She had the use of the D Suburb property to the exclusion of the husband from January 2009 but thereafter she paid the outgoings and received no child support.
95.The agreed fact remains that the wife made the greater contribution by way of parent and homemaker.
Conclusion on Contribution
96.This was a marriage involving cohabitation spanning more than 9 years and contributions have been made for more than 12 years. The parties had difficult financial periods and notwithstanding their efforts they are left with a modest pool of assets.
97.The critical contribution element was the wife’s arbitration award of $493,893.61. It is the unchallenged evidence of the wife that the award was made up as follows:
Element Amount Past out of pocket expenses $36,477.87 Past out of pocket expenses paid by plaintiff $1,100.00 Future out of pocket expenses (surgery, pharmaceuticals and medical attendances) $30,000.00 Past wage lost $79,708.00 Future wage lost $170,000.00 Past Griffiths and Kerkemeyer[12] $24,879.94 Future Griffiths and Kerkemeyer $9,146.80 Mother’s help $14,300.00 Loss of superannuation $20,000.00 Fox and Wood[13] $3,701.00 Non-economic loss of 45 per cent $104,058.00 Total $493,371.61 [12] Allowance for support provided or to be provided to the injured person.
[13] Adjustment for tax.
98.It is relevant to consider the timing of the injection of funds and the application of those funds.[14] In July 2002, the wife was paid $320,000. In October 2002 she received a further $10,358.28.
[14] In the Marriage of Pierce (1998) 24 Fam LR 377.
99.It should be noted that in 2002 the parties bought the former matrimonial home at D Suburb for $320,000. They paid $220,000 from the wife’s award and borrowed $100,000 from S Home Loans. It is a reasonable assumption that but for the award, the parties would not have bought the D Suburb home.
In the normal course, a damages award or third party settlement or judgment will be considered the contribution of the party suffering the injury. For example, from the judgment of the majority in In the Marriage of Aleksovski (1996) FLC 92-705:
In our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time.
And later:
In our view, having regard to the facts of this case, his Honour was entirely correct in that the wife’s damages award and, in particular, that portion of it which related to pain and suffering, should be regarded as a contribution by her to the marriage and to the family.
Similarly, that portion of a damages award which relates to economic loss, representing income lost during the marriage or period of cohabitation, may also be regarded as a contribution by the party who has suffered the loss.
In the circumstances, the proper finding is that the wife made the greater contribution. In respect of a net pool of assets of $372,000, the injection of a capital sum of over $330,000 must be of significance. There is an argument that the allowances for economic loss relevant to the period of cohabitation simply replaced what the wife may well have contributed from income, but for the accident. The Griffiths and Kerkemeyer allowances are necessarily referable to the impact of the wife’s injuries on the husband. Nevertheless, the authorities have it that the award must be largely seen as a contribution on the wife’s side of the ledger. There is no concept of erosion of this 2002 contribution and I am to reflect on the purpose to which the injection of funds was applied. In In the Marriage of Pierce (1998) 24 Fam LR 377, the Full Court was dealing with a challenge to a property settlement judgment in which there was a finding that contributions favoured the husband 55 per cent to 45 per cent by the wife. The Full Court addressed interpretations of previous judgments which were said to give rise to the concept of the erosion of an initial imbalance of contributions. 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 (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J. at page 10).
29.In the instant case, his Honour identified what he described as the greater initial financial contribution of the husband and his post separation contribution, but, in our view, he failed to properly assess such contributions. The period of cohabitation was ten years. At about the date of the marriage the husband had very significant assets. His Honour found that the husband had assets to the approximate value of $226,000. At the date of the trial, the parties had assets of a net value of $319,190 which included the matrimonial home valued at $260,000 to which the husband had contributed about $200,000 from moneys to which the wife had made no contribution.
30.There is an obligation on a trial judge not only to identify the relevant contributions but also to assess them. In this case his Honour failed to adequately, or at all, assess these contributions. In our view he failed to properly weigh the greater initial contribution of the husband, with all other relevant contributions, and seems not to have had regard to the use made by the parties of the husband’s greater initial contribution.
31. The finding and assessment that the contributions of the parties during cohabitation should be regarded as equal was, in our view, open to the trial judge. Given that assessment, we are of the view that in assessing the totality of the contributions of each of the parties as being 55 per cent by the husband and 45 per cent by the wife, his Honour, notwithstanding the observations of Stephen J in Gronow v Gronow (1979) 144 CLR 513 at 519, on the facts of this case, failed to attach sufficient weight to the greater initial financial contributions of the husband, and to his contributions post separation in caring for the children.
32.Accordingly, we are of the view that, in assessing the respective contributions of the parties from the commencement of cohabitation to the date of hearing as being 55 per cent by the husband and 45 per cent by the wife, the discretion vested in his Honour miscarried and the appeal should thus be allowed.
The Full Court went on to re-exercise the discretion under s 79 and found that the contributions favoured the husband 70 per cent compared to 30 per cent by and on behalf of the wife.
Although the gender of the parties is reversed in the proceedings before me, there are similarities between the circumstances in this case and those in Pierce. For example, the duration of the marriage, the size of the pool and the relative magnitude of the injection of assets are not dissimilar. Some of the differences favour the wife before me. For example, the financial injection from her came in three years after the commencement of cohabitation. However, none of that matters. I am to exercise discretion on the facts before me, not to look for similar fact cases. The one aspect that can be confidently drawn from Pierce however, is that a finding in this case of equality of contribution, as is advanced on behalf of the husband, would be outside the permissible range of discretion.
Here, it is possible that but for the wife’s damages award there may have been no pool of assets requiring or justifying settlement. A substantial allowance is required for that fact. Otherwise the parties both had paid employment, the husband for significantly greater periods than the wife. The non-financial contributions are likely to have favoured the husband but the wife undertook the main parent and homemaker role. Although she had exclusive use of the D Suburb property from January 2009 the wife paid the outgoings, maintained the property and did not receive adequate child support. In my view the wife’s contributions represent 70 per cent compared to 30 per cent by the husband.
The other matters in Section 79
Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. This was not a matter addressed in submissions or evidence. Neither of the parties lives on the income generated by a capital sum or from a business of significant value. Therefore this consideration is not relevant.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in s 75(2) would seem to be paragraphs (a), (b), (c), (f), (j), (k), (l) and (o).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The husband and wife are 48 and 44 years of age, respectively.
There is no evidence about the health of the husband. As to the wife it is her evidence that she continues to have ‘issues’ with her back. She underwent operations in 2004 and 2006 at T Hospital. She recently consulted a new surgeon and has been told that her condition will not get any better. The wife takes Panadeine Forte, Crysanal and Sodium Valporate.
(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;
According to his latest Financial Statement, the husband receives $322.50 per week made up of $225.00 in income from his business, BB Pty Ltd and $97.50 by way of rent assistance from Centrelink. The husband’s Financial Statement does not fairly represent his financial circumstances. He conceded in cross-examination that some of his expenses (including telephone, rent and some other living expenses) are met directly by the company. His motor vehicle is supplied by a client, Mr OO. In real terms, the husband’s income from paid employment is substantially greater than his Financial Statement discloses. It was the husband’s evidence in cross-examination that the figure of $225 per week shown as his income from the business is after the business pays $594 per month to I Bank on a personal loan. The Financial Statement, however, shows that the husband pays $150 per week off the personal loan from his income of $225 per week. In the last financial year the business paid $13,163 by way of the husband’s residential rent. It paid $3,059 in staff amenities. The husband is the only staff member and said in cross-examination that this allowance was for printing paper, milk, tea, coffee, biscuits and bread. The allowance made in the company accounts for other expenses included payments for overnight accommodation and food for work trips to Canberra and the office / home guard dog – a greyhound. It was put to the husband that his total benefits over the 11 months of the last financial year when the business existed, totalled $28,000 or nearly $600 per week. The husband rejected that proposition. It is not possible to confidently fix the husband’s current income but it is likely to be more like $600 per week rather than the $225 to which he deposed.
He lives alone.
The husband deposes to only one expense: $150 per week by way of repayments on a I Bank personal loan. I take it that it the loan to which I have referred above.
The husband declares a weekly surplus but his Financial Statement is unreliable. It is the wife’s case that the husband is not exercising his earning capacity. The husband concedes that his taxable income for the financial year ending 30 June 2010 was in excess of $63,000. He says that he has looked and is looking for paid employment. There is no detail about the applications he has made. It is likely that the husband has unexercised earning capacity.
The wife’s income is $548.33 per week. By her Financial Statement that income is said to be made up of salary or wages of $364.50, $1.15 in interest, $127.68 in Family Tax Benefits and $55 by way of Carers Allowance. However, the same document declares that she is not employed. I understand her evidence to be that she has not had paid employment since leaving employment following her injury, her latest affidavit says that she continues in receipt of Centrelink benefits and that a Carers Pension has replaced the Disability Pension she used to receive. Doing the best I can with that, the wife probably receives $548.33 per week, largely in the form of various benefits.
The wife lives with the parties’ daughter, E, who has no income. The wife’s expenses, inclusive of all living expenses are:
Expense Amount Mortgage on the D Suburb property to S Home Loans $150.00 Rates $42.00 Home and contents Insurance $26.90 Health Insurance $18.00 Motor vehicle insurance $18.50 Motor vehicle registration – $20.00 Visa card repayments $86.50 Household expenses $558.00 Total $919.90
On the face of her Financial Statement, the wife has a weekly deficit of about $371.00. For reasons that are not explained, the wife itemises $495.00 per week of the $558.00 per week of household expenses at Part N of her Financial Statement. She apportions the itemised expenses as to $206.50 to her own expenses and $288.50 to those related to E. The wife’s parents pay $15.00 per week for E’s gymnastic fees. The wife receives no child support from the husband.
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
The wife says that she was assisted by an employment agency. She says that the employment agency considered her circumstances and recommended that she apply for the disability pension. There is no evidence that the wife has unexercised earning capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
E is 7 years of age and lives with the wife. Under the Orders of 4 June 2010, she lives with the father on alternate weekends from 5.00 pm Friday to 5.00 pm Sunday and for one half of the school holidays. E does not enjoy unqualified health. E suffers from Attention Deficit Hyperactivity Disorder and Aspergers Syndrome. The wife has been told that she also suffers from Epilepsy. She suffered seizures at the age of 4. Her seizures are managed with medication. However, she was hospitalised for 3 days because of a seizure following the July 2011 school holidays. She is in Year 2 at PP School. E has learning difficulties and has been assessed by the QQ Psychological Services [15] as at July 2010 to have a general cognitive ability in the 9th percentile. E’s school receives $3,030 per annum which is used to supplement the school’s allocation of time from a teacher aide for her. E receives 4.25 hours of support in class and in the playground. I assume, but the letter of 5 September 2011[16] from the school does not say, that is 4.25 hours each week. The mother administers Lamictal, prescribed for E’s Epilepsy, Movical which assists to relieve constipation and the mother ensures that she attends for speech pathology on a fortnightly basis. Suffice it to say, the wife asserts and the husband rejects that E has significant need for support at home. I accept that there is a substantial task for the parents in supporting E and that task necessarily falls largely to the wife.
[15] Exhibit 10.
[16] Part of Exhibit 10.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out what evidence there is in relation to the parties’ expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
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;
The husband has modest superannuation interests. The wife has nominal amounts in superannuation. The husband receives rent assistance and the wife’s income is entirely by way of Centrelink benefits.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is no detailed evidence about the standard of living enjoyed by the parties during the marriage. The bare facts suggest that the parties struggled at times.
(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;
There is no evidence that either party intends further study or to establish a new business.
(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;
The wife owes her father some money. She gives no evidence about her proposals for repaying the debt. If the wife retains the D Suburb property, I imagine it will be difficult for her father to be repaid, at least in the near term. Otherwise this is not a relevant consideration.
(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;
It is likely that the wife’s efforts as parent and homemaker made it easier for the husband to maintain the paid employment in which he was involved.
(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;
The marriage may have affected the wife’s earning capacity but unfortunately the impact of her workplace injury has excluded the practicability of paid employment, at least for the foreseeable future.
The marriage had no identified adverse impact on the husband’s earning capacity.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The wife’s Centrelink status changed from Disability Pension to Carer’s Pension. That suggests that the impact on the wife of the need to supervise and support E is of growing significance. For example, the wife regularly attends to assist at E’s school.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have referred to the evidence about those matters.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(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
There is no current child support liability. The parties each blame the other for ongoing disputation about child support.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Contributions were made to the husband’s children, Mr F and G. The only relevant contributions to those children are those of the wife.[17] It is an agreed fact that the wife provided parent and homemaker contributions to the husband’s children, Mr F and G for the periods they were part of the parties’ household. The parties disagree as to the quality and benefit of the wife’s contributions but the husband concedes that some contributions were made. The wife says that Mr F lived with the parties for the last several years of the marriage and that G spent on average, three weekends out of four and half the school holidays, until September 2006. At that time, allegations were made by G against the wife’s father. The wife says that she did not discipline the children, seeing that as the husband’s role. She treated them otherwise, as members of the household and provided for their daily needs. She cooked their meals, shopped for necessary household consumables, provisions, personal items and clothing as required. She washed their clothes and bedding and cleaned their rooms and the household in which they lived. She organised birthday parties and bought Christmas and birthday presents for them. That evidence was not challenged.
[17] See In the Marriage of Robb above.
Otherwise, nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
I have referred to the parenting orders made on 4 June 2010.
Section 79(4)(g)
I refer to the comments above about child support.
Conclusion
Each of the parties refers to an adjustment of 15 per cent in favour of the wife. However, they each do so on the basis of their arguments about the pool of assets and the findings they advocate on contribution. For example, the wife seeks an outcome whereby she retains the home, subject to the mortgage and what she otherwise has. That would leave the husband with the assets and superannuation in his name. Expressed in those same terms, the husband argues for a cash adjustment of $78,000 whether by payment from the wife or on the sale of the property.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
ØThe division on the basis of contributions alone would leave the wife with about $150,000 more than the husband;
ØThe husband will have a greater proportion of his settlement in the form of superannuation than will the wife;
ØThe husband has a substantially greater income earning capacity than the wife;
ØIt is likely that the wife will bear the main physical and perhaps the main financial load of supporting E; and
ØFor some years the wife made parent and homemaker contributions to Mr F and albeit for a lesser period, for G.
It is not the role of the non-contribution elements of paragraph s 79(4) to balance the parties’ financial circumstances. For example, it has been said in relation to s 79(4)(e) that the provision does not invite a process of social engineering;[18] and in Mallett, above, at 472, Wilson J said that:
[18] In the Marriage of Clauson (1995) 18 Fam LR 693 at 711; [1995] FLC 92-595 at 81,912.
The objective of the section is not to equalise the financial strengths of the parties. It is to empower the court, following a dissolution of a marriage, to effect a redistribution of the property of the parties if it be just and equitable to do so…
It is appropriate to look at the dollar effect of an adjustment, not just the percentages. Although they cancel each other out to some extent, in my view these matters support a modest adjustment in favour of the wife. A proper adjustment would be 5 per cent. In the context of this case 5 per cent represents only of the order of $18,600. I acknowledge that the adjustment will cause a difference between the parties of twice that amount. The dollars are important in these circumstances but given the unsatisfactory nature of the husband’s financial disclosure, I will assume that they are more important for the wife.
Just and Equitable
The net assets have a value of $371,701 ($449,701 - $78,000). Of that, $44,163 is in the form of superannuation and $327,538 is in the form of non-superannuation assets.
A division in the proportions 75 per cent to the wife and 25 per cent to the husband would leave them with about $278,775.75 and $92,925.25 respectively.
The wife has or has had the benefit of, the following assets:
ASSETS
VALUE Wife’s DD Bank account $143 Wife’s DD Bank saver account $159 Wife’s EE Pty Ltd shares – 1303 @ $2.96 $3,857 Wife’s FF Pty Ltd shares – 1200 @ $1.47 $1,764 Wife’s motor vehicle $1,000 Wife’s contents $500 II Super – wife $4,326 JJ Super – wife $2,516 Wife’s debt to Mr Y -$11,000 Total Gross Assets $3,265.00
If she is to receive 75 per cent of the assets, the wife should receive another $275,510.75 from parties’ equity in the D Suburb property.
For the purposes of these proceedings the D Suburb property is represented as:
ASSET
VALUE C Street, D Suburb $380,000 Mortgage on the D Suburb property -$67,000 Net Value $313,000.00
That means that in order to retain the D Suburb property the wife would need to refinance the mortgage and pay the husband $37,489.25.
That would leave the husband with the following assets:
ASSETS
VALUE Husband’s I Bank account 638461 $52 Husband’s I Bank business account $663 Husband’s motor vehicle $2,000 Husband’s interest in BB Pty Limited $7,500 Motor boat (in Husband’s possession) $2,000 Sailing dinghy (in Husband’s possession) $900 Husband’s tools of trade $1,500 Husband’s furniture and contents $3,500 CC Pty Ltd – husband $34,120 GG Super – husband $1,110 HH Super – husband $2,091 Payment from the wife $37,489.25 Total Assets $92,925.25
It is possible and perhaps, likely, that the wife will not be able to refinance the mortgage and pay the husband $37,489.25. If so, the property will be sold. In order that the parties both share in any benefits of an increase in its value over the agreed value or in the loss associated with any amount by which the net sale price is less than the agreed value, I will express the consequential order in percentage terms. $275,510.75 is about 88 per cent of $313,000.
The husband proposes that the wife pay him out within 3 months. The wife proposes 56 days. I will take the wife’s figure.
Conclusion under Section 79
Significant contributions were made by each of the parties. They acquired assets and supported each other. In the course of over 9 years of cohabitation and since, the parties shared the work of the marriage in different ways. The main asset of the parties resulted from a very significant contribution made by the wife in the form of her damages award. An adjustment is warranted in the wife’s favour to account for various matters but in particular a difference in the parties’ earning capacities, the living arrangements for their daughter and the contributions made by the wife to the husband’s older children. The orders I propose will effect a just and equitable settlement of their property.
I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan.
Associate:
Date: 15 September 2011
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