Paul and Paul
[2011] FMCAfam 949
•12 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PAUL & PAUL | [2011] FMCAfam 949 |
| FAMILY LAW – Property – gifts or loans – adjustment for child. |
| Family Law Act 1975, ss.75, 79 |
| Hickey & Hickey [2003] FamCA 395 Biltoft & Biltoft (1995) FLC 92-614 Mallett v Mallett (1984) FLC 91-507 D & D [2006] FLC 93 256 |
| Applicant: | MS PAUL |
| Respondent: | MR PAUL |
| File Number: | BRC 5702 of 2010 |
| Judgment of: | Coates FM |
| Hearing date: | 10 August 2011 |
| Date of Last Submission: | 10 August 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 12 September 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr B Thiele |
| Solicitors for the Applicant: | Bell Dixon Butler Lawyers |
| Counsel for the Respondent: | Mr T George |
| Solicitors for the Respondent: | Suthers Lawyers |
ORDERS
That the marital property be adjusted as to fifty-five percent (55%) to the husband and forty-five percent (45%) to the wife.
That the parties within seven (7) days of the date of this Order submit to the Court draft orders to reflect the reasons for judgment.
IT IS NOTED that publication of this judgment under the pseudonym Paul & Paul is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BUNDABERG |
BRC 5702 of 2010
| MS PAUL |
Applicant
And
| MR PAUL |
Respondent
REASONS FOR JUDGMENT
This is an application for alteration of property interests by the wife wherein she seek 50 percent of the property.
Her full orders can be seen in her case outline filed electronically on
7 February 2011.
The husband seeks an adjustment to him in the order of 65 percent.
His full orders were short, stated in his case outline electronically filed on 7 February 2011, merely seeking a percentage division.
The case of Hickey & Hickey [2003] FamCA 395 at 39 stated:
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.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. Thirdly, the Court should identify and assess the relevant matters referred to in ss.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. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”
By way of background, the husband was born [in] 1963.
The wife was born [in] 1965.
The parties married [in] 1985.
They have had four children, the youngest being born [in] 1995 and is aged 16.
The parties separated on a disputed date in 2009 under one roof, with the wife leaving the matrimonial home in September 2009.
A list of assets was supplied by the parties, being:
ASSETS
WIFE’S VALUE
HUSBAND’S VALUE
IN DISPUTE
[Property D]
$322,514
$322,514
Wife’s 2002 [vehicle omitted]
$10,000
$10,000
Husband’s 2009 [vehicle omitted]
$29,000
$29,000
Household furniture
$10,000
$10,000
[omitted] boat and motor
$42,5000
$42,500
Husband’s super with [A] Superannuation as at 04.08.11
$257,335.95
$257,335.95
Husband’s [Q] Superannuation as at 04.08.11
$36,339.87
$39,664.81
Wife’s [G] Super as at 19.07.11
$39,664.81
$39,664.81
[R] Super as at 30.06.11
$13,033.94
$13,033.94
Husband’s [N] pay out
$6,199
$6,199
TOTAL ASSETS
$766,587.57
$766,587.57
LIABILITIESHusband’s [vehicle omitted] loan (to mother)
$26,000
$26,000
Wife’s [omitted] Credit Card
$15,400
$15,400
Wife’s loan from son [X]
$800
$800
Wife’s loan from mother
$10,000
$10,000
Loan from husband’s mother
$56,000
$56,000
Loan from husband’s mother (Council Rates)
$1,623.97
$1,623.97
TOTAL LIABILITIES
$55,8823.97
$86,623.97
$81,400
There were hand written entries, being $238,754 for the husband’s [A] Superannuation fund, $34,060 for the husband’s [Q] Superannuation fund, $36,949 for the wife’s [G] superannuation fund and $12,502.21 for the wife’s [R] superannuation fund. These were updated values but not disputed, so there was no need to make a finding.
At the outset of the trial the parties defined the issues as being:
a)As to the pool – the husband’s case that $55,000 from his parents was a loan and not a gift as the wife alleged – that $56,000 was received was not disputed;
b)As to the pool – whether $10,000 was lent to the parties by the wife’s mother – that $10,000 was received was not disputed. This issue is to be viewed against the wife’s credit card debt of $15,400; and
c)The husband’s post separation contributions in looking after two children, some financial issues and superannuation.
In relation to the $56,000 amount from the husband’s mother, the dispute was whether it was a gift or not.
At the outset of the trial I ruled against an application by the husband’s mother to be made a party, on the ground that the matter had been given trial directions in late 2010 and the wife would be prejudiced if, at the last minute, she became a party. One effect of that ruling was that there was no evidence of the debt from the husband’s mother.
The wife’s case that the money was a gift in that:
a)It was spent on a boat alleged to have been enjoyed only by the husband;
b)Two other amounts which had been loaned by the husband’s mother were for the purposes of the husband and wife, to acquire joint marital realty; and
c)There was no evidence other than an assertion by the husband that it was a loan and not a gift.
The husband’s case was that the money was a loan in that:
a)Two previous large amounts of money had been lent to the parties, not gifted;
b)One loan was evidenced in writing and one was not but there was no issue that both were loans;
c)Merely because the money was spent on a boat was not indicative that it was not a loan; and
d)The money came from his mother who lived off her investments and was required by her.
What I am left with is assertion as against assertion, there being no independent evidence from the husband’s mother.
Mr Thiele for the wife referred me to Biltoft & Biltoft (1995) FLC 92-614 and to the concept of vagueness. He said there was no evidence relating to the likelihood of the amount being repaid.
In certain circumstances family loans can be classified as loans but which are unlikely to be demanded or repaid, but I could not conclude that is the evidence in this matter.
On the contrary, both parties agreed that previous large amounts were to be paid back and were in fact paid back although the wife may have been equivocal on that point. If she was equivocal, then of course that would have been a contribution by the husband’s family on his behalf and she would be caught so she did accept it was paid back.
That the money was spent on a boat allegedly for him does not remove doubt in my mind over the issue of it being a gift. I have no doubt that at the time the money was provided, it was at a time when the marriage was together and one where I could infer that it was a loan to benefit the marriage by allowing acquisition of a boat at minimal interest.
On that basis I conclude the money was a loan and not a gift and needs to be repaid by the parties.
In relation to the $10,000 obtained by the wife from her mother’s family, as with the husband’s claim, there were no independent witnesses to say it was never expected to be repaid, that being the husband’s claim.
But the real issue here is when the amount came to the wife and what she did with the money.
She stated the amount was given to her on 9 October 2009, which is about one month after she left the matrimonial home and after separation she claimed occurred in July 2009.
She said $7,000 was paid to her Visacard on 20 October 2009 and $3,000 used for bills, linen and kitchenware, the last two items being required when she moved form the house.
But in cross-examination the wife conceded that part of the money went on her very large telephone bill and 95 percent of that usage was hers. She also conceded that at July 2009 she had a debt of $7,000 on her Visacard, as stated in her affidavit evidence.
Although the husband claimed the separation date was in January 2009, under one roof, that in my view is immaterial to the wife’s admission that as at July 2009 she had a debt of $7,000. The debt was not particularised as being joint debt, rather I got the impression it was caused by the wife leaving the residence. There was strong objection when it was put that the wife was forced to leave the home, there being no evidence of such. In any case, I was not persuaded on the evidence that it was necessary expenditure.
On that basis I do not need to conclude the exact separation date, what I needed to see from the evidence was that the money was used to reduce joint debt or caused as a result of the separation. There was no evidence that the money was used to repay joint debt, nor was there evidence to show how the expenditure was required to support herself as she claimed in her affidavit evidence, so it is not an amount which will be taken into account as part of the joint t debts.
In relation to the husband’s child care, the husband looked after the two children, one of them being nearly 18 at the time of separation and one nearly 18 now.
The submission by Mr Thiele was that such care over two years of separation should not be considered to be a large contribution and should be compared with contributions in a short marriage. In my view, it is a matter of taking into account the evidence, all of it from both sides of the ledger. It is true the husband paid for the children, their food and expenses, however, the wife paid child support of $1,900 a year, as set by the Child Support Agency. It is true that the amount is not much, but it was at the limit of her earnings, while she needed to support herself. While it is not the case that she was required to leave the house, as was put, at some stage in a separation it is probable that the parties will physically separate, as is their right. But references to children occur a number of times of s.75(2) of the Act, and on that basis I must regard the husband’s contributions as being higher than that of the wife. I should also say that teenagers can cost a lot of money in support over a short period of time, but it is not necessarily a mathematical calculation. I will take the contribution into account.
As to extra financial contributions made by the husband, what would assist would be a trail of paper, receipts, expenditure. I accept he paid rates for the house, but I also accept that he refinanced the mortgage loan to pay interest only, without making a greater contribution to the reduction of the capital sum. It may well be that he had to do that, but in doing so he cannot claim to have made a far greater contribution when I have to account for the wife’s need to support herself as well.
The wife holds a [omitted] vehicle which was paid out on the sale of marital home. She benefitted from that and such can be regarded as an extra contribution by the husband.
In relation to superannuation, there was a big increase apparent in the husband’s superannuation, about $100,000, but not the evidence to support that. So was this increase due to his extra contributions which would be regarded as his alone?
I was not referred in evidence to such extra contributions, therefore I conclude that there was no evidence put forward to hold that the husband made such extra contributions. The evidence of why the superannuation increased remains unexplained.
In fact, if there was evidence to show he made extra contributions, then that would call into question his need to renegotiate the home loan whereby he made interest only payments. I have nothing on which to determine the issues in his favour.
While the wife did not make a direct contribution to the husband’s superannuation, the marital relationship the parties shared until separation allowed him to earn a living and make contributions to superannuation.
In applying the principles to dividing property as stated in Mallett v Mallett (1984) FLC 91-507, I need to weigh both financial contributions and non-financial contributions over the 14 year relationship.
I stress again this is not a mathematical calculation, it is weighing the facts and determining a contribution, to be reduced to a percentage figure.
Taking into account all of that, the contributions by the parties were such that the husband ought to be allowed an extra five percent to the husband for care of the children and now care of one child.
There were no outstanding s.75(2) factors, other than the child factors, which would see an adjustment made or the wife’s lesser ability to earn an income, because she can still earn an income.
That leaves the manner in which the property is to be divided.
Before doing so I need to consider how superannuation should be divided, given the statement in D & D [2006] FLC 93 256, that:
“Consideration of the constitution or “mix” of the assets with which each party will be left with as a result of the proposed orders would seem a necessary, if not critical, factor in determining the justice and equity of the proposed orders in each case in which superannuation interests are involved”.
I was told it the amount could be split within terms of the Act.
There was no evidence apparent as to why I would not make a splitting order in accordance with the percentage division I have proposed.
The last consideration then is the justice and equity of the order I propose. Given the findings I have made, justice and equity is served by making orders in the percentage division I have arrived at. That is where the evidence has led me.
Counsel for the husband, Mr George sought the finding to be made and then for an adjournment to allow the parties to settle terms of the orders.
I was not initially in favour of that but given the husband’s mere request of a percentage division and nothing more, it would be better in my view to allow the parties to divide the property in the determined percentage divisions - 55 percent to the husband and 45 percent to the wife. In my view that would be a just and equitable outcome.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Coates FM
Date: 12 September 2011
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