PAVOT & PAVOT

[2015] FCCA 1582

FEDERAL CIRCUIT COURT OF AUSTRALIA

PAVOT & PAVOT [2015] FCCA 1582

Catchwords:
FAMILY LAW – Property – alteration of property interests.

Legislation:

Family Law Act 1975, ss.75, 79, 90MT

Stanford & Stanford [2012] HCA 52
Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355
Clives & Clives (2008) 40 Fam LR 273
Pierce & Pierce (1999) 24 Fam LR 377, (1999) FLC 92-844
Kennon & Kennon (1997) 22 Fam LR 1

Applicant: MR PAVOT

Respondent: MS PAVOT

File Number: BRC 190 of 2014

Judgment of: Judge Lapthorn

Hearing dates: 9 December 2014 and 6 February 2015

Date of Last Submission: 6 February 2015

Delivered at: Brisbane

Delivered on: 11 June 2015

REPRESENTATION

Counsel for the Applicant: Mr Shoebridge

Solicitors for the Applicant: Jeffrey Cuddihy & Joyce

Solicitors for the Respondent: Respondent appearing in person

ORDERS

1. That within 30 days the husband do all such acts and things necessary to transfer to the wife all his right title and interest in the property situated at Property M in the State of Queensland;

2. That the wife retain to the exclusion of the husband all her right, title and interest in the following:

   (a)Property M in the State of Queensland;

   (b)Her Ford Territory motor vehicle;

   (c)Her bank accounts;

   (d)All superannuation entitlements in her name; and

   (e)All other personal items in her possession or control.

3. That save as is provided for in orders 4 and 5 herein, the husband retain to the exclusion of the wife all his right, title and interest in the following:

   (a)Property S, in the State of Queensland;

   (b)His Commodore motor vehicle;

   (c)His Motorcycle;

   (d)His bank accounts;

   (e)All superannuation entitlements in his name; and

   (f)All other personal items in his possession or control.

4. That the orders below have effect from the operative time.

   (a)That in accordance with section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the husband's interest in (omitted) Fund ("the Fund") under member number (omitted), the wife is entitled to an amount calculated in accordance with Pt.6 of the Family Law (Superannuation) Regulations 2001 using the base amount of ninety three thousand five hundred and forty one dollars ($93,541.00) and there is a corresponding reduction in the entitlement of the husband would have been made but for these orders.

   (b)That, having been accorded procedural fairness in relation to the making of this order, this order binds the trustee of the superannuation fund.

   (c)That operative time for this order is 4 business days after the date of service of the orders on the trustee of the superannuation fund.

   (d)That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 ("the SIS Regulations"), each of the parties hereto and the Trustee of the Fund shall do all such acts and things and execute all such documents as may be necessary, including but not limited to exercising the wife's request in accordance with the SIS Regulations, for the payment of non-member spouse interest in the wife's name in the Fund.

5. That the court notes:

   (a)The value of the non-member spouse interest is calculated in accordance with the SIS regulations; and

   (b)Any payments from the husband's superannuation interest in the (omitted) Fund, under member number, (omitted) made after the Trustee has created a new interest in the wife's name in the Fund are not splittable payments in accordance with the requirements of the Family Law (Superannuation) Regulations 2001.

IT IS NOTED that publication of this judgment under the pseudonym Pavot & Pavot is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 190 of 2014

MR PAVOT

Applicant

And

MS PAVOT

Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant husband and respondent wife have been unable to reach agreement in relation to a property settlement after the demise of their 11 year relationship.  They have asked the court to make a property adjustment order.  For the purposes of this judgment I will refer to them as the husband and the wife even though a divorce order has been made.  I mean no disrespect to the parties in doing so.

2. The husband has sought orders that would provide an overall settlement between the parties at 55% to the wife and 45% to him.  The wife however has argued for a distribution of 70% to 30% in her favour. 

3. The husband is 60 years of age and works as a (occupation omitted).  The wife who is 59 is not currently in employment.  They commenced to live together in a relationship in (omitted) 2001 and married on (omitted) 2002.  They separated on a final basis on 30 October 2012.  A Divorce order was made on 14 January 2015 terminating the marriage on 15 February 2015.

Competing applications and material relied upon

1. The husband filed his Initiating Application on 10 January 2014.  In that application he sought orders that would provide for a distribution between the parties at 52.5% to the wife and the remainder to him but as indicated above at the hearing he amended his position seeking the 55%/45% distribution.  The wife’s response was filed on 26 March 2014.  She has maintained her position that there should be a 70% division in her favour.

2. In support of his application the husband relied on his trial affidavit and financial statement both filed 6 November 2014.  The wife relied on her trial affidavit and financial statement both filed 7 November 2014.  On the day of the hearing I also gave her leave to file in court and rely on an affidavit she had affirmed on 8 December 2014.

3. The following documents were tendered into evidence during the hearing:

   a)Exhibit C1 :    Schedule of Assets and Financial Resources;

   b)Exhibit H1:    Transcript of Domestic Violence Protection Order Application heard at Magistrates Court Gympie dated 12 June 2013;

   c)Exhibit W1:   Letter from Dr T dated 29 January 2015; and

   d)Exhibit W2:   Temporary Protection Order made Magistrates Court Gympie dated 7 November 2012.   

Issues

1. The parties remained at issue in relation to a number of matters during the hearing but the significant disputes surrounded: what weight should be given to the contributions made at the commencement of the relationship; what weight should be given to the wife’s allegations that she was subjected to a course of conduct of family violence by the husband; what weight should be given to contributions made by the wife during the relationship especially in relation to the requirement for the parties to move many times to further the husband’s career; an assessment of post-separation contributions by each party; and an assessment of their future needs.

Credit

1. The husband impressed as an honest and forthright witness.  The wife’s evidence however was at times concerning.  Although I do not doubt the evidence given by her was an honest recollection on her part, she appeared at times to present in an emotional and histrionic fashion such that I was left with the impression that she was not a good historian.  Where their evidence differed I preferred that of the husband.

Legal Approach

1. In determining property proceedings the court is firstly required to identify according to ordinary common law and equitable principles the existing legal and equitable interests of the parties in the property that is available for distribution between them. It is then necessary to determine whether it is just and equitable to make an order altering the parties’ interests in the property. If so satisfied the court must then consider the contributions made by each of them under the various s.79(4) considerations before looking at their future needs by reference to the s.75(2) factors. ^[1] 

   [1] S79(2) & (4), Stanford [2012] HCA 52. See Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355 for approach prior to the High Court decision in Stanford

The property of the parties

1. During the hearing, the parties tendered at the court’s request a schedule of assets and financial resources.  Although at the time of its tender there was not entire agreement between the parties after I indicated a preference to make an order that each party retain those chattels currently held in their respective possession they agreed that items 8 and 15 of that list be removed.  Agreement then ensured as to the remaining items on the list of assets.  I therefore find, for the purposes of this judgment, that the assets and liabilities of the parties are: 

Asset	Ownership	Agreed value
Property M    (former matrimonial home)	Joint	$380,000
(omitted) Super	Husband	$86,605
(omitted) Super	Husband	$300,091
Bank Account	Husband	$4,400
Bank Account	Wife	$13,800
Furniture and equipment	Wife	$13,272
Furniture	Husband	$4,000
Ford Territory	Wife	$6,000
Motorcycle	Husband	$3,750
Wife's (omitted) Super	Wife	$15,344
(omitted) Box Trailer	Husband	$500
Equity in Property S property	Husband	$30,500 ($332,500  Less Mortgage $302,000)
Boat	Wife	$500
Commodore	Husband	$12,000
TOTAL ASSETS:		$870,762

1. I also find that the parties have the following financial resources which, although not forming part of the property pool for the purposes of any adjustment, is relevant for my consideration of their future needs:

FINANCIAL RESCOURCES
Annual leave       Long service leave  Sick leave	Husband	$16,001 $19,564 $26,855
Wife’s Mother’s Estate	Wife	$93,100

Is it just and equitable to alter the property interests?

1. In Stanford[2] the majority held:

   In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship.  It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.  No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship.  That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship.  And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end.  Hence it will be just and equitable that the court make a property settlement order.  What order, if any, should then be made is determined by applying s 79(4).

   [2] [2012] HCA 52

2. I am satisfied that it is appropriate in this case to alter the property interests of the parties in light of the demise of their marriage.  The maintenance of the current legal ownership of their property, particularly their jointly held ownership in the Property M property, would not afford them justice and equity.

Contributions

1. I am satisfied that at the commencement of the relationship the wife was in a stronger financial position and had made a greater contribution to that of the husband.  The wife had a motor vehicle, savings of around $25,000 and a half interest in a home owned by her and her former husband.  It was agreed that her share was valued at $70,000.  The husband in these proceedings obtained a loan for $70,000 to enable her former husband’s share to be bought out.  The wife went guarantor with the husband for the $70,000 loan.  In cross-examination the wife conceded the parties would not have been able to keep that property if it were not for the husband obtaining the loan. 

2. The husband argued that whilst there was a greater financial contribution by the wife at the commencement of the relationship and accepting the equity in the wife’s home provided a springboard for the parties to achieve their current financial positon, given the passage of time any adjustment in the wife’s favour should not be to the extent contended by her.  When determining what weight should be given to the initial contributions the authorities indicate that adopting a purely mathematic approach should be avoided and consideration needs to be given to how the initial contributions were utilised during the relationship.[3] 

   [3] Clives & Clives (2008) 40 Fam LR 273.

3. The Full Court of the Family Court in Pierce and Pierce[4] held:

   [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………… regard must be had to the use made by the parties of that contribution.

   [4] Pierce & Pierce (1999) 24 Fam LR 377 at 385 para [28]; (1999) FLC 92-844.

4. The parties were together for some 11 years and they both made contributions during their relationship.  I am however persuaded by the wife’s argument that if it were not for her better financial position at the commencement of the relationship they would not be in as strong a position today.  The husband is correct to argue that if he had not have been in a position to borrow the funds to buy out the wife’s first husband’s share in the home they would not have been able to keep it but likewise the wife’s share in the home enabled them to build on their financial position.  There should be some weighting in the wife’s favour for this initial contribution.

5. The property was rented out for many years, particularly when the parties were living away as part of the husband’s employment, and the rent received was paid into the mortgage.  The husband also contributed financially to the mortgage, as did the wife.  The husband set out in his affidavit the respective contributions to that mortgage.  He omitted to include the last tenant’s contribution in his list and conceded that error in evidence. 

6. The parties were at odds as to the nature and use of three re-draws on the mortgage.  In 2006 the husband withdrew $10,000.  He used $5,300 on maintenance and repairs of the property and kept the balance in an account in his name until 2010 when the remaining balance was transferred into a joint account.  In 2007 $5,000 was redrawn and a further $5,000 in 2008.  His evidence was that the sums were used for joint living expenses even though the sums were initially transferred into an account in his name.  The wife believed the husband had spirited away these sums into a secret bank account.  She argued that the husband had not made full and frank disclosure of accounts and that he had an account with the (omitted) Bank.  She highlighted reference to notations of S24 and S26 that appeared on bank statements believing these to refer to other accounts.   I accept the husband’s evidence that these references relate to transfers from the wife’s Suncorp bank account to the mortgage account with (omitted) Bank.  I also accept his evidence that deposits to (omitted) Bank accounts could be made from the (omitted) Bank.  I have not been persuaded that there are any secret bank accounts held by the husband.  I find he has made full and frank disclosure. 

7. Both parties made financial and non-financial contributions during the relationship.  Although the husband earned a higher income than the wife, the wife also provided significant non-financial contributions by way of home-maker contributions.  The wife argued that she had made a significant contribution in support of the husband’s employment by often moving home to be with him close to his work sites.  She said they lived in six homes in nine years, many of which were in remote areas.  I accept there should be some weighting in the wife’s favour for her support of the husband’s career, which sometimes meant she was unable to engage in paid employment, but this needs to be balanced against the higher income earned by the husband as a consequence of the moves.

8. The wife gave evidence of being a victim of family violence at the hand of the husband and now suffers Post Traumatic Stress Disorder (PTSD) as a consequence.  The wife annexed to her affidavit correspondence from a clinical psychiatrist and part of a medical report in support of her application for a Disability Support Pension which she said corroborated her evidence in this regard.  There was no affidavit from any medical professional properly before the court to support her assertion.  Even if I was to accept the opinion of Mr E set out in his letter dated 4 November 2014 I would only be able to find that he has come to the opinion expression therein based on what the wife had told him and the documents she had provided him.  There was no independent forensic assessment before the court.  I therefore cannot find that any mental health condition suffered by the wife is attributable to any actions by the husband. 

9. Notwithstanding that finding there is a further limb to the wife’s argument that must be considered that does not require any finding that she has suffered PTSD as a consequence of any actions on the husband’s part.  The gravamen of her argument is that the alleged violence was so serious that her contributions to the marriage were made more arduous as a consequence.  A court is entitled to take into account a course of conduct that has had a significant impact upon a party’s contributions to a marriage.[5]  In this case however I have not been satisfied that the wife has established such a course of conduct. 

   [5] Kennon (1997) 22 Fam LR 1

10. The wife alleged that on three had been occasions when the husband had raised a clenched fist to her face stopping short of her nose; that he had assaulted her to the back of her head; that he had verbally abused her and locked her out of the home; that he put her life in danger by his actions on a tractor, getting her to sit on a ride-on mower and in instances of road rage.  Most of these incidents were said to have occurred in the last 12 months of the marriage although one was said to have occurred in 2002.  The wife also gave general but not particularised evidence of being concerned about the husband’s treatment of her during the marriage.   A temporary protection order under the Queensland Domestic and Family Violence Protection Act 2012 was made on 7 November 2012 with the wife as the aggrieved and the husband as the respondent but after a contested hearing the wife’s application was dismissed on 12 June 2013.   

11. The husband admitted to the raising of his fist to the wife on two occasions during the course of arguments between the parties.  He regretted this action on his part.  He described a relatively happy marriage for its first couple of years but that that changed when the wife adopted new religious beliefs and started to criticise him.  He said this happened almost every other day. 

12. In relation to the wife’s allegation that he hit her on the back of her head, he denied doing so.  He said that this allegation related to an incident between them in February or April 2012 when the wife threw water over him.  He said that the wife asked him to go outside the house as she wanted to talk to him.  The wife then read to him their wedding vows and told him that he had broken them and accused him of having a pornography addiction.  She then grabbed a jug of water and threw it at him.  He said he had turned to run and then turned back to face her.  She threw more water over him.  She ran away and he chased her.  He made a grab for her and caught her by the collar and she then fell after overbalancing.  He said that he caught her as she fell and lowered her to the ground.  She told him to stop doing this stuff as he lay on top of her.  He then went into the house and locked the door.  He said he locked the door as he needed time to calm down and regain control.  He unlocked it after about 10 minutes but did not tell her.  She came inside after about 20 minutes.  He denied ever punching her in the back of her head. 

1. In relation to the tractor incident the husband said that the hand brake had not been properly engaged and he had to run to the vehicle to steer it to safety.  The wife was on the tractor at the time.  He said there was no malicious intent on his part.  The lawn mower incident arose as he bogged the ride-on mower and asked his wife for some help by sitting on it while he pushed it out of the bog.  Whilst doing so it hit a barbed-wire fence.  He did not do this on purpose.

2. Consistent with my earlier findings that I preferred the evidence of the husband where it differed from that of the wife, I am satisfied that the wife’s allegations as to a course of family violence have not been established.  I accept that the marital relationship had become problematic in the last couple of years and the parties argued.  The wife had lost trust in the husband’s fidelity and the husband had become overburdened by the wife’s expression of her religious beliefs.  They argued often.  I find that during arguments the husband had raised a fist to the wife on two occasions.  Whilst these incidents were acts of violence they must be seen in the context of the demise of their relationship and, do not on their own, establish a course of conduct.  The wife’s act of throwing water on the husband may have been intended by her to be a jolt to him but was also an act of violence.  It was pre-meditated.  I do not accept her evidence that the husband hit her on the back of the head in this incident.  Whilst I accept the husband was impatient as a driver, given his concession in this regard, I am also satisfied there is no evidence that he drove in a dangerous way causing risk of harm to either himself of the wife.  Further I am satisfied that the incidents involving the mower and the tractor were accidents that may have been caused by the husband’s carelessness but were not malicious actions on his part.  I reject the wife’s argument that her contributions were made more arduous by conduct from the husband.

3. During 2012 the wife organised some renovation and maintenance work on the former matrimonial home.  The parties were in disagreement as to the necessity and nature of the work.  Concerned by this the husband withdrew $50,000 from their joint account and deposited it into an account in his sole name.  The wife became alarmed at this and withdrew the remaining $30,000 and put it in an account in her name.  I accept the husband’s evidence that he subsequently transferred funds to the wife’s account to even up the withdrawals.

4. After the parties separated the wife remained living in the former matrimonial home and the husband rented a property elsewhere.  He has since purchased a home which, as can be seen from the table of assets above, is heavily mortgaged.  The wife’s evidence was that she has had to withdraw from her savings to support herself financially since separation as her only other source of income has been by way of Centrelink payments.  Some of the money withdrawn has been used towards maintenance and repair to the former matrimonial home.  The husband has continued to be in paid employment since separation and is currently earning around $110,000 a year.

5. Although the wife has used some of her savings towards works on the property when I consider she has had the use of the former matrimonial home mortgage free and the husband has paid rent and then the mortgage on his new property I assess their post separation contributions as equal.

6. When I weigh up the considerations I have addressed above I am satisfied that the wife made a greater contribution at the beginning of the relationship but the contributions during the 11 year relationship and after separation were relatively equal.  The husband submitted that the contributions were equal but in different ways.  I accept that submission.  I would assess the overall contributions at 52.5% to the wife and 47.5% to the husband.

Future Needs

1. The husband is 60 years of age and remains in full time employment.  He earns a good income in excess of $110,000 a year.  There are no health issues of note that would preclude him from maintaining his employment although given his age his is likely to be in the latter years of his employment life.  The wife on the other hand is in receipt of Centrelink payments.  She is 59 years of age, does not work and is unlikely to do so in the future.  The husband conceded the wife’s health precludes her from doing so.  Whilst I have earlier rejected the causal link of any PTSD suffered by the wife I accept that her health has been compromised such that she is not able to be gainfully employed.  An adjustment in her favour is warranted to take into account the disparity of income between the parties in light of the husband’s employment and the wife’s health.

2. I also take into account the wife has a financial resource from her mother’s estate of around $93,000 and the husband has leave entitlements of around $62,000 although the sick leave is not able to be cashed in.

3. Taking these factors into account I am satisfied that there should be an adjustment in the wife’s favour of 7.5%.

Are the proposed orders Just and Equitable?

1. My conclusion as to contribution and future needs would see an adjustment of 60% to the wife and 40% to the husband.  The property pool is $870,762.  Accordingly the wife should receive a distribution that would achieve an amount as close as possible to $522,457 and the husband $348,305.

2. Having made that finding it is necessary to step back and consider what orders would bring about a just and equitable outcome in light of the findings above.  I am satisfied that the former matrimonial home should be transferred to the wife and that apart from superannuation each party should retain other items currently in their possession or control.  The wife had sought a splitting order that would have provided her with 70% of each of the husband’s superannuation funds.  Clearly in light of my findings such an order is not appropriate.  Whilst it is necessary to make a superannuation splitting order, the order would need to be limited to an amount that would achieve the overall percentage distribution determined above.  I am satisfied that procedural fairness has been afforded the trustees of the husband’s (omitted) Super fund enabling orders to be made.

3. The orders I intend to make will see the wife receive or retain the following:

   a)The former matrimonial home:               $380,000

   b)Wife’s bank account:  13,800

   c)Furniture and equipment:  13,272

   d)Ford Territory:  6,000

   e)Wife's (omitted) Super:  15,344

   f)Boat:  500

   g)Superannuation Splitting Order:                  93,541

   h)Total:  $522,457

4. The husband will receive or retain the following:

   a)Property S property (equity):                    $30,500

   b)Husband’s bank account:  4,400

   c)Commodore:  12,000

   d)Motorcycle:  3,750

   e)Box trailer:  500

   f)Furniture:  4,000

   g)(omitted) Super:  86,605

   h)(omitted) Super less splitting order:        206,550

   i)Total:  $348,305

5. For the reasons set out in this judgment I am satisfied that such orders are just and equitable and will order accordingly.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Judge Lapthorn

Associate: 

Date:  11 June 2015