Pearcey and Seagren
[2020] FCCA 2858
•21 October 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PEARCEY & SEAGREN | [2020] FCCA 2858 |
| Catchwords: FAMILY LAW – Property proceedings – de-facto relationship – modest property pool – just and equitable outcome. |
| Legislation: Family Law Act 1975, Pt VIIIAB |
| Cases cited: Hickey v. Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Stanford v. Stanford (2012) FLC 93-518 Biltoft (1995) FLC 92-614 Norbis & Norbis (1986) FLC 91-712 Robb & Robb (1995) FLC 92-555 |
| Applicant: | MR PEARCEY |
| Respondent: | MS SEAGREN |
| File Number: | NCC 1233 of 2017 |
| Judgment of: | Judge Betts |
| Hearing date: | 20 May 2020 |
| Date of Last Submission: | 3 June 2020 |
| Delivered at: | Newcastle |
| Delivered on: | 21 October 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Graham |
| Solicitors for the Applicant: | Craney Family Solicitors |
| Counsel for the Respondent: | Mr Moon |
| Solicitors for the Respondent: | Court Solicitors & Barristers |
ORDERS
That by no later than 21 January 2021 (“the settlement date”), the parties do all acts and things, and sign all such documents, as are necessary to transfer to the Wife, at her expense, all of the Husband’s right, title and interest in and to the property situated at B Street, Suburb C in the State of New South Wales, more particularly described in Certificate of Title Folio Identifier ... (“the B Street, Suburb C property”).
Contemporaneously with Order (1):
(a)the Wife is to pay the Husband the sum of fifty thousand, three hundred and forty-three dollars ($50,343) (“the settlement sum”);
(b)the Wife is to do all acts and things to discharge the existing joint mortgage over the B Street, Suburb C property and to refinance that mortgage so that the Husband is no longer liable as a borrower or mortgagor;
(c)the Husband will cooperate by doing all things and signing all documents as are necessary to discharge the existing joint mortgage;
(d)the Wife will discharge the joint D Bank credit card debt in its entirety, with the Wife to indemnify the Husband in respect of all credit card repayments pending such discharge.
The Husband is to indemnify the Wife in respect of:
(a)the twenty-five thousand dollar ($25,000) debt owing by the Husband and/or the Wife to the Husband’s mother and stepfather, NOTING THAT this debt is included in the settlement sum;
(b)the combined liabilities to City E Counsel, Region F Water and the G Group in the amount of one thousand six hundred and eighty six ($1,686) referred to in paragraphs 44 and 45 of these reasons for judgment.
Pending payment of the settlement sum:
(a)the Wife has the sole right to occupy the B Street, Suburb C property to the exclusion of the Husband, during which time she is to keep the property tidy and in good repair;
(b)the Wife is to meet all minimum mortgage repayments, rates, insurances and property outgoings for the B Street, Suburb C property as and when they fall due and is to indemnify the Husband and keep him indemnified in respect of same NOTING THAT this order is subject to order 3(b);
(c)neither party is to further encumber the B Street, Suburb C property, or increase the existing joint mortgage liability by way of redraw without the consent in writing of the other party.
In the event the Wife fails to pay the settlement sum to the Husband by the settlement date:
(a)Orders (1), (2)(a), (2)(b), (2)(c) are discharged;
(b)The B Street, Suburb C property is to be listed for sale forthwith, with the Wife to nominate the listing agent;
(c)The property is to be sold by private treaty or auction as recommended by the agent in writing;
(d)The listing price and the sale price are to be agreed between the parties and failing agreement as determined by the agent in writing;
(e)Upon completion, the sale proceeds are to be applied in the following order of priority:
(i)To discharge the existing joint mortgage over the B Street, Suburb C property;
(ii)To discharge any council rates or other encumbrances over the B Street, Suburb C property;
(iii)In payment of the agent’s commission and any other expenses (including auctioneer fees if applicable);
(iv)In payment of the costs of any solicitor/conveyancer appointed to act for the parties in respect of the sale;
(v)The balance is to be paid to the parties in accordance with the following formula:
A.Husband is to receive 15% of the ‘net tangible property’ as calculated below, plus a sum of $25,000;
B.The Wife is to receive the balance:
1. Where the ‘net tangible property’ = the net sale proceeds of the B Street, Suburb C property after payment of the expenses referred to in order (5)(e)(i)-(iv) + $6,000 [on account of the Wife’s Motor Vehicle 1] - $45,042 [being the aggregate of the credit card debts of $12,400 and $7,642; and the debt to the Husbands parents of $25,000]
The Husband is to retain all items of property in the list marked “1” which is attached to these Orders and the Wife abandons any claim, right or entitlement to such property.
To facilitate the making of Order (6):
(a)the Wife is to use her best endeavours to locate all of the items;
(b)the items are to be collected by no later than 18 November 2020, on a day and time to be agreed in writing between the parties at least seven (7) days prior;
(c)the Husband is to arrange for an independent removalist to collect the items from the B Street, Suburb C property and the Wife is to contribute $300 towards the cost of that removalist;
(d)the Husband is restrained from entering upon the property to collect the items or from causing any other person to enter the property to collect the items other than the removalist.
The Wife is to retain all items of property in the list marked “2” and attached to these Orders and the Husband abandons any claim in respect of any such property.
The Wife is to indemnify the Husband in respect of:
(a)her H Store Mastercard liabilities;
(b)her J Store credit card liabilities;
(c)any debt/s owed to the Wife’s parents.
That in accordance with section 90XT(1)(a) of the Family Law Act 1975, whenever a splittable payment within the meaning of section 90XE of the Act becomes payable to or on behalf of the Applicant from his interest in the K Super Fund, the Respondent is entitled to be paid (by the trustees of K Super Fund) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulation 2001, using a base amount of $82,292 and there is a corresponding reduction in the entitlement the Applicant would have had but for these Orders.
That Order 10 will have effect from the operative time.
The operative time in respect of Order 10 will be the fourth business day after the date of service of these Orders upon the trustees.
That Orders 10 to 12 are binding on the trustee of K Super Fund.
That pending the implementation of the superannuation splitting order provided for in orders 10 to 12, the Applicant be and is hereby restrained by himself, his servants and agents from:
(a)drawing upon;
(b)encumbering;
(c)executing a death benefit nomination in favour of any other person; or
(d)doing any other act or thing;
which would have the effect of defeating or otherwise reducing the amount of the superannuation splitting order payable to the Wife pursuant to order 10.
That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money under these or any subsequent orders:
(a)that each party be declared to have the sole right, title and interest of all other assets in their respective possession, control or registered in their name as at the date of these Orders including but not limited to monies, furniture and chattels;
(b)that each party be solely liable for, and shall indemnify the other against, any and all liabilities encumbering any items of property in their respective possession or control and any and all liabilities in their respective names as at the date of these Order;
(c)that each party be declared to have the sole right, title and interest in any superannuation entitlements and insurance policies which stand in their sole name, respectively as at the date hereof.
That:
(a)each party shall do all acts and things reasonably required by the other including the signing or execution of all necessary documents to give effect to the provisions of this Order within fourteen (14) days of being requested to do so.
(b)If either party refuses or neglects to sign or execute and return a document within fourteen (14) days after a written request to do so then the Registrar of the Newcastle Registry of the Federal Circuit Court of Australia is hereby appointed under section 106A of the Family Law Act 1975 to sign or execute such document on behalf of that party upon lodgement of such document and the filing of an Affidavit of a Solicitor on behalf of the requesting party as to the said neglect or refusal.
NOTATIONS:
A.The property referred to in the list marked “1” is being returned in “as is” condition and it is noted that the Wife asserts that some of the items may have been misplaced as many of the items were boxed up some years ago. The boxes may also contain other items which will be provided to the Husband.
B.The Husband may have lost the garage remote control referred to in the list marked “2”.
IT IS NOTED that publication of this judgment under the pseudonym Pearcey & Seagren is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1233 of 2017
| MR PEARCEY |
Applicant
And
| MS SEAGREN |
Respondent
REASONS FOR JUDGMENT
Introduction:
These are property settlement proceedings arising out of the breakdown of the de facto relationship between Mr Pearcey (“the Husband”) and Ms Seagren (“the Wife”).
The parties’ de facto relationship commenced in 2009 [1] and finally broke down in November 2016 when the Husband left the home. There is one (1) child of the relationship, X, born in 2011 who is presently nine (9) years old. Pursuant to consent orders, X lives primarily with the Wife and spends alternate weekends and some holiday time with the Husband.
[1] There was dispute as to the commencement date. My reasons for finding it to be in 2009 are set out later herein.
Notwithstanding the modest amount of property in dispute in this case, the parties were unable or unwilling to reach a settlement. Instead they litigated fiercely, including as to the division of their household chattels. This particular debate was not cost-effective for either of them.
Chattels aside, there were various other factual and legal disputes in relation to the Balance Sheet, the appropriate weighting of the parties’ respective contributions and the impact of the relevant s 90SF(3) factors. There was also a debate as to the appropriate form of the orders to be made – including whether the major asset (the home) should be sold, or whether it should be retained by the Wife with an appropriate cash adjustment to the Husband.
Material relied upon at trial:
Both parties were represented by a solicitor and counsel throughout.
The trial was originally listed to run from 15 - 17 April 2019 as to both parenting and property. But the first two (2) days of that trial were largely taken up by the parties’ negotiating the final parenting orders.
The property trial was unable to finish on the remaining hearing day and was adjourned part-heard to 25 October 2019. But that day the chattels debate suddenly flared into life. As a result, the trial again did not finish and I adjourned for oral submissions on 20 May 2020.
On that day the parties appeared electronically given the COVID-19 pandemic. They additionally provided the court with written submissions.
There were still a few “loose ends”. At the time of reserving judgment, the court noted that the parties were still to provide the court with:
· updated orders specifically in relation to the disputed chattel items (and supporting submissions);
· updated information concerning X’s schooling situation (and associated costs); and
· updated superannuation balances for the parties.
These things were attended to.
In the end result, the Husband relied upon the following documents:
(a)Outline of Case filed 12 April 2019;
(b)Amended Initiating Application filed 1 April 2019;
(c)Trial Affidavit of the Husband filed 1 April 2019;
(d)Financial Statement of the Husband filed 1 April 2019;
(e)Affidavit of the Husband’s stepfather, Mr L filed 1 April 2019;
(f)Written submissions provided at the close of the trial;[2]
(g)Further written submissions and proposed orders concerning the chattels, together with the Husband’s updated superannuation balances.[3]
[2] Exhibit 9.
[3] Exhibit 11.
The Wife relied upon:
(a)Outline of Case filed 14 April 2019;
(b)Response filed 17 July 2017 (although the orders sought in that document were superseded by the Orders set out in her Outline of Case);
(c)Wife’s Trial Affidavit filed 2 April 2019;
(d)Wife’s Financial Statement filed 2 April 2019;
(e)Written submissions provided at the close of the trial;[4]
(f)Further written submissions and proposed orders concerning the chattels, together with the Wife’s updated superannuation balance.[5]
[4] Exhibit 10.
[5] Exhibit 12.
The court has also had the benefit of various other documentary exhibits tendered in the course of the trial. These will be referred to as relevant.
In the course of preparing these reasons, I had my Associate email the parties requesting that they advise whether or not the Husband had paid X’s school fees at his new school. In response, both parties’ legal representatives confirmed that he had not done so. [6]
[6] Email from Husband’s solicitor dated 25/09/20 & from Wife’s solicitor dated 02/10/20. These were collectively marked as exhibit 13.
The Law:
These proceedings are governed by the provisions of Part VIIIAB of the Family Law Act (“the Act”).
I intend to adopt the following approach:
(a)Firstly, I will identify and value the property, liabilities and financial resources of the parties.
(b)Secondly, I will consider whether it is “just and equitable” to make a property settlement order.
(c)Thirdly, I will identify and assess each party’s respective contributions towards their net assets pursuant to s 90SM of the Act. For convenience, each party’s respective contributions-based entitlement will be expressed in percentage terms.
(d)Fourthly, I will identify and assess the relevant “future factors” set out in s 90SF(3) of the Act. I will also consider the matters arising pursuant to s 90SM(4)(d), s 90SM(4)(f) and s 90SM(4)(g) of the Act as appropriate. Having done so, I will then determine what adjustment (if any) ought to be made to each party’s respective contributions – based entitlement. In doing so I will be mindful not only of percentages (which are often a convenient tool for the court) but also of the underlying dollar figures that the percentages represent (which are the practical consequences to the parties).
(e)Lastly, I will consider the effect of my findings and proposed order so as to satisfy myself that the outcome is “just and equitable”.[7]
[7] The pathway I am adopting is primarily based upon the Full Court decision in Hickey v. Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, adapted by me to take into account the High Court’s decision in Stanford v. Stanford (2012) FLC 93-518.
Step 1 - Identifying and valuing the property, liabilities and financial resources of the parties:
I find the Balance Sheet to be as set out below (ignoring cents).
Ownership Description Value/ Amount NON-SUPER ASSETS: Joint B Street, Suburb C $750,000 Wife Motor Vehicle 1 $ 6,000
[agreed]Joint Household contents Disregard Wife Bank accounts Disregard Husband Bank accounts Disregard Assets sub-total: $756,000 LIABILITIES: Joint Mortgage on B Street, Suburb C property $542,000 Joint D Bank Credit Card $ 12,400 Wife H Store Mastercard
J Store card$ 7,642 Wife Loan from Wife’s parents Disregard
Husband Loan from Husband’s parents $ 25,000 Husband Debts to City E Council, Region F Water and G Group Disregard Liabilities sub-total: $587,042 Net non-super assets: $168,958 SUPERANNUATION: Husband K Super Fund $151,100 [8] Husband M Super Fund $ 86,451 [9] Wife N Super Fund $ 1, 309 Total superannuation: $238,860 FINANCIAL RESOURCES: Husband Annual leave Disregard Total financial resources: Disregard [8] As at 21 May 2020 – Exhibit 11
[9] As at 21 May 2020 – Exhibit 11
B Street, Suburb C:
The Wife and X have remained living at the B Street, Suburb C property since separation.
At trial in April 2019 the parties agreed that the value of the B Street, Suburb C property was $750,000. Each party agreed that the Wife should retain it as part of any final order.
However, at the time of closing submissions in May 2020, the Husband belatedly withdrew his concession as to its value. Instead he indicated that he now wanted to sell the property so that the parties could “test the market”.
Whether I order a sale of the property or not, it seems appropriate that in broad terms I proceed on the basis of the agreed value at trial. Obviously if a sale is ordered, that value may go up or down and there will be costs of sale that will need to be deducted.
Household contents:
There has been bitter dispute between these parties as to the individual chattel items each is to retain. In that regard I have before me competing chattel orders and submissions but I do not have any chattel valuations.
I have decided that the only appropriate course is to disregard the value of the chattels for the purposes of the Balance Sheet and to simply divide them in the most just and equitable manner that I consider appropriate.
Bank accounts:
I have “point-in-time” bank account balances of each party as set out in their respective Financial Statements. The problem with those figures is that they are now eighteen (18) months old.
While it is true that in April 2019 the Husband had a higher account balance ($4,215 to the Wife’s $415), it seems to me entirely artificial now to work off those figures.
The parties having been separated now for nearly four (4) years, and with the Husband paying child support to the Wife, I consider that I should disregard those bank account balances.
Mortgage on B Street, Suburb C property:
The mortgage balances provided to the court are also potentially somewhat out-of-date. The competing figures range somewhere between $542,510 and $542,736 but presumably there have continued to be mortgage repayments in the meantime. Accordingly I have adopted the pragmatic figure of $542,000 for present purposes.
Joint D Bank credit card:
Again these figures are potentially somewhat out-of-date. The competing figures range between $12,388 and $12,464. I have simply adopted a pragmatic figure of $12,400.
Wife’s H Store Mastercard / J Store card:
The Wife’s Financial Statement gives a combined balance of $7,642 for these cards, which figure is again potentially out-of-date.
The Husband submits that I should disregard these debts.
While these credit card debts are solely in the Wife’s name, it is common ground that in May 2017 the Husband withdrew from the joint account the sum of $9,217. Those moneys had been specifically paid to the Wife by the father of her oldest child, O, on account of child support. The Husband utilised those moneys for his own purposes.This included paying out a credit card of his own, as well as meeting some legal costs. In the circumstances I propose to allow the full amount of the Wife’s credit card.
Loan from Wife’s parents:
In 2010 the Wife’s parents loaned her the sum of $50,000 to assist in the cost of renovations to a home she then owned at Suburb P. In late 2013, the Wife made a partial repayment to her parents of $10,000.[10]
[10] This repayment was made on the Wife’s behalf by the Wife’s sister as discussed later herein.
In his evidence the Husband conceded that the moneys were loaned rather than gifted. He incorrectly thought however that the loan had been fully re-paid.
But I cannot allow the debt in the Balance Sheet as it is now statute-barred. Specifically, a failure to repay a loan is a breach of contract, in respect of which a six (6) year limitation period applies. There being no agreed timeframe for repayment of this particular loan, it follows that at law the loan was one which was repayable “upon demand”. At common law that time limit commences to run from the date the loan is first made, not from the date of any later demand. So the time limit commenced to run immediately upon the moneys being first loaned. While as a matter of law the 2013 part-payment revived the six (6) year time limit, more than six (6) years has since elapsed.
Moreover, the Wife’s affidavit deposes that her parents have provided her with substantial financial assistance over the years and that they “help each other in times of need”. She deposes that they are in a position to assist her financially and are apparently willing to act as guarantors in the event she refinances the B Street, Suburb C property. On balance, the Wife is not going to be obliged to make repayment anyway. In Biltoft (1995) FLC 92-614 the Full Court held that it was open to a court not to take into account, or to discount, the value of an unsecured liability in certain circumstances – including but not limited to a liability which is vague or uncertain, unlikely to be enforced or not reasonably incurred.
In closing, though the loan is not a Balance Sheet item per se, it nonetheless remains relevant on the question of contributions.
Loan from Husband’s parents:
I accept the Husband’s evidence, and that of his stepfather Mr L, that in late 2015 Mr L and his wife (the Husband’s mother) advanced the sum of $25,000 to the parties to enable them to construct a retaining wall at the B Street, Suburb C property. The loan was an informal agreement, never documented, the essential terms of which were that the loan would be repaid either by the end of 2017, or upon the home being re-financed which was anticipated to be early 2018.
There was no interest repayable.
In the case of this family loan, no time limitation issues arise. But the question still remains – should this loan be characterised as a legitimate debt and included in the Balance Sheet?
In this case the Wife contends that the debt is unlikely to be enforced and should thus be disregarded. She points to the fact that the Husband has never made any repayments. Moreover, the Husband’s mother and stepfather have provided the Husband with rent-free accommodation in their home ever since separation. They did so even though his weekly income exceeds his expenses, ie. he had some capacity to make repayments, or at least to pay board/rent.
However, having had the benefit of seeing the Husband and Mr L give evidence, I am satisfied that the debt is a legitimate one that is repayable. Mr L and the Husband’s mother are both pensioners and Mr L said that they had originally drawn down the loan moneys from their capital (superannuation). Mr L was adamant that the moneys were definitely not gifted and that the only reason that they had not pressed the Husband for repayment to date was because it had been impossible for him to repay the loan in the manner that had been agreed, ie. as a lump sum. Loan repayments from the Husband’s income post-separation would have been a “dribs and drabs” scenario, which neither party had contemplated or agreed to.
It is questionable whether the presumption of advancement applies to the loan given that the moneys were loaned at least partly by the Husband’s stepfather rather than coming solely from the Husband’s mother.
Nonetheless, if the presumption of advancement applies I am satisfied that it has been rebutted.
Debts to City E Council, Region F Water & G Group:
The Husband gave oral evidence at trial that he had recently received invoices from each of these entities totalling $1,686.00. I accept his evidence.
However, given the Husband’s post-separation withdrawal of $9,217 referred to earlier, I propose to disregard this as a Balance Sheet item.[11]
[11] In dollar terms, the Husband’s $9,217 withdrawal is effectively “cancelled out” by my allowing the Wife’s credit card debt of $7,642 and disallowing these new debts of the Husband of $1,686. Though there is some artificiality about this process, it seems to me to be a just and equitable manner of proceeding.
Husband’s annual leave entitlements:
The Wife’s Balance Sheet included a figure of $13,622 on account of the Husband’s annual leave entitlements. But to be fair to him, the Husband works long hours, he has limited holidays of some four (4) weeks or so per year, and realistically he will need his holiday leave to be able to spend quality time with X.
His leave is at best a modest financial resource which the Husband will need to draw on in order to have holidays. In the circumstances I do not see how his annual leave entitlement meaningfully advances the matter and I am disregarding it.
Step 2 – Considering whether it would be “just and equitable” to make a property settlement order:
In Stanford & Stanford (2012) FLC 93-518, the High Court of Australia emphasised that the court cannot make any property settlement order pursuant to Part VIII (and by analogy, Part VIIIAB), unless it is “just and equitable” to do so. [12]
[12] The High Court was referring to s.79(2) but by analogy the decision also applies to s.90SM(3).
The plurality[13]held that the expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations and does not admit of exhaustive definition. It is not possible to chart its metes and bounds, but there are three (3) fundamental propositions which must not be obscured:
(a)First, the court must begin a consideration of whether it is “just and equitable” to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The question posed by [section 90SM(3)] is thus whether, having regard to those existing interests the court is satisfied that it is “just and equitable” to make a property settlement order;
(b)The power to make a property settlement order must be exercised in a principled fashion, and it cannot be answered by assuming that the parties rights to, or interests in, matrimonial property are or should be different from those that then exist;
(c)Whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them by reference to the matters set out in [section 90SM(4)]. To conclude that making an order is “just and equitable” only because of, and by reference to the [section 90SM(4)] considerations, without a separate consideration of 90SM(3) would be to conflate the statutory requirements and ignore the principles laid down by the Act.
[13] French CJ, Hayne, Kiefel & Bell JJ
In this case, the parties jointly submit that it would be just and equitable to divide their assets, albeit that each contends for a different order. This is an appropriate concession given the significant intermingling of their non-superannuation assets, the fact that they have a child together, that their relationship has failed, and that they find themselves financially intertwined in respect of the B Street, Suburb C property.
I am satisfied that it would be “just and equitable” to make a property settlement order.
Step 3 – Assessing each party’s financial and non-financial contributions towards their net assets:
When the parties formed a relationship, each was in their thirties and had a young child. The Wife had primary care of her daughter O (then 6, nearly 7) and the Husband spent regular time with his son Q (then 3). The Husband was in paid employment, the Wife was not. The Husband had acquired some superannuation through his employment whereas the Wife’s superannuation was nominal.
In those circumstances, I propose in the exercise of my discretion to divide the matrimonial property into two (2) separate categories for contributions purposes.[14] The first category consists of the non-superannuation or “tangible” property (my expression). The second category consists of the superannuation property. Most of the factual debate relates to the contributions in respect of the “tangible” property and so most of my focus will be there. That said, some of my contributions findings will be applicable to both categories of property, particularly in respect of homemaking and parenting contributions.
CONTRIBUTIONS TOWARDS THE TANGIBLE PROPERTY:
[14] See Norbis & Norbis (1986) FLC 91-712
Initial contributions:
There was dispute as to when the de facto relationship began and as to what each party owned at the time.
Tendered photographs and Facebook posts from mid 2009 [15] establish that by that time there was an intimate relationship on foot between the parties, and that their respective children had become comfortably acquainted. I also accept the Husband’s evidence that around that time he had started assisting the Wife with some renovations on her Suburb P property.
[15] Exhibits 2 and 3
I am satisfied that their de facto relationship had commenced by late 2009.
By the time the parties formally moved in together in late 2009, their de facto relationship was in my view already well established. The Wife and O had been regularly staying in the Husband’s rental home.
At commencement of the relationship, the Husband’s tangible asset position was fairly modest. He owned some furniture and household effects, and he had some savings. The amount of savings was in dispute. He asserts that he had $40,000 which he had received by way of a property settlement from his ex-partner (Q’s mother). The Wife vigorously disputed this.
The Husband’s evidence was that he had allegedly transferred $40,000 to the Wife in 2010. His assertion that he had those moneys at commencement of the relationship appears to have been a reconstruction on his part.
But during cross-examination the Husband’s evidence as to this $40,000 transfer to the Wife was completely discredited. It simply did not occur.
Moreover, despite the Husband’s evidence that he remained on good terms with his ex-partner, he did not call her as a witness to corroborate the $40,000 figure, nor did he produce any other document to corroborate it.
I am satisfied that the Husband did have some savings at commencement of the relationship. In early 2010 he was able to provide $32,129 towards the purchase of the land at B Street, Suburb C. It is more likely than not that a significant proportion of those savings would have been available to him at commencement of the relationship but I cannot make a finding as to an exact figure.
At commencement of the relationship the Wife owned a property at Suburb P, having purchased it some seven (7) months earlier in early 2009 for $290,000. It was in need of substantial renovation. It was subject to a mortgage and the balance around the time the relationship commenced was approximately $235,000. (Though unemployed at commencement of the relationship, the Wife had had a past history of buying, renovating and selling houses, with loans from banks and inter-family loans as between herself, her parents and her sister.)
The Wife had $43,000 or thereabouts in a City E Building Society account which was being used by her to pay for renovation costs on the Suburb P property. She also had $20,000 in a D Bank term deposit, and she had loaned her sister $56,697.
The Wife also had a motor vehicle which she had recently purchased for $32,900.
In summary, at commencement of the relationship the Wife had significantly greater tangible assets than the Husband did.
Contributions during the relationship:
Throughout the relationship the Husband worked as a professional. He was provided with a work vehicle as part of his employment.
From an early stage in the relationship the Wife and her daughter O had been spending significant time at the Husband’s rental property, in part due to the state of the Suburb P property. Given that the Wife was in receipt of Centrelink benefits, the Husband was meeting most of their day-to-day living costs.
The Wife was primarily responsible for arranging the renovations to the Suburb P property, including liaising with the contractors. Her parents loaned her $50,000 to assist in the renovation costs.[16]
[16] This being the statute-barred liability referred to earlier.
She had been renovating the property prior to meeting the Husband, but upon the Husband’s entry into her life he began to assist her.
I am satisfied that the Husband assisted with stripping plasterboard, knocking out walls, lining walls, grinding tree stumps, painting, cleaning up around the property, installing gates, spray painting the fence, planting, working in the garden, and assembling and installing a flat-pack kitchen. At times his mother and stepfather also assisted on weekends.
The Husband also paid for some relatively inexpensive renovation works, including fridge panels.
In late 2009 the Husband also loaned the Wife the sum of $10,000 to assist with the renovations. In 2010, she repaid the moneys as well as repaying an additional $5,000.
In early 2010 the parties purchased the B Street, Suburb C property, which at that time was vacant land:
a. The Wife paid the deposit of $5,000;
b. The Husband paid the $32,129 referred to earlier; and
c. The parties jointly borrowed the remaining $220,372 by way of mortgage.
The Husband’s evidence was that his parents also loaned the parties $10,000 or $15,000 to assist in the purchase, which loan was subsequently repaid. I have no corroborating evidence about this particular loan, even though the Husband’s stepfather swore an affidavit and could easily have corroborated it if it were true. Given the unreliability of some of the Husband’s evidence as to financial matters I am not satisfied that these moneys were ever loaned. But if they were, then they must have been repaid and so the loan does not take the matter very far anyway.
Notably, the parties purchased the land in the Husband’s name only. Inferentially he was in a stronger position to obtain a loan given his employment status.
X was born in 2011. It is common ground that the Mother was his primary parent throughout the relationship. X had health difficulties from when he was very young. As a baby he suffered from croup and on two occasions ended up in hospital. Given the Husband’s work hours, the burden of dealing with X’s health issues essentially fell upon the Wife.
In 2011 the Wife sold her Suburb P property, receiving net proceeds of $255,694. She paid $210,000 to the Husband, together with $20,000.00 in leftover deposit moneys after commission.
Around this time the Wife’s Centrelink entitlements formally ceased. The Husband became the only “breadwinner” from that time onwards for the household, although to be fair the Wife was still receiving child support from O’s father, together with some fairly significant moneys provided to her by her parents as referred to later.
In late 2011 or early 2012, the parties entered into a contract with R Homes to build their B Street, Suburb C home. They borrowed a total of $519,000 including the cost of a pool. At that time the Wife also transferred the $20,000 from her term deposit into the parties’ joint account.
In 2013 the B Street, Suburb C home was complete and the parties moved in. The Husband assisted with some of the improvements, digging trenches in the back yard to lay AG pipe for drainage and moving about ninety (90) tonnes of top soil in preparation for the laying of turf. (His stepfather also loaned the parties some temporary fencing and gates, which it is now common ground are going to be returned to him as part of the final orders.)
In 2013 the Wife’s sister repaid the Wife $50,000.00 of the debt she owed, although the Wife redirected $10,000 of that to her own parents by way of part-payment of what she owed them (as referred to earlier in these reasons). It is unclear what happened to the other $6,697 owed to the Wife by her sister. But as it was not contended by either party that the $6,697 remained outstanding, I infer that her sister must have repaid those moneys to the Wife at some point.
By 2015 X had been diagnosed with learning and developmental delays, secondary to childhood apraxia of speech. He was assessed as eligible for NDIS funding. He has required speech therapy, occupational therapy assistance, psychological assistance and a tutor to help him with his literacy.
In terms of homemaking and parenting, the Wife did practically all of the shopping, the cooking, the laundry, the washing and the ironing. The state of the house was a source of some tension between the parties.
Over the period from 2012 to 2016, the Wife’s parents paid a total of $123,600 into the Wife’s bank account to assist her. The Husband was unaware of this at the time. Some of that money was applied towards cleaners, as the Husband would accuse her of being “lazy” when the home was not clean after he returned from work.
The parties’ respective contributions towards the care and maintenance of O and Q are addressed in the context of s 90SF(3)(r).
Post-separation contributions:
At separation in November 2016, the Husband moved in with his Mother and stepfather who lived a short distance away.
The Wife remained at the B Street, Suburb C property with X (and O). While she had “exclusive use” of the home, it still contained a large number of chattel items boxed up in the garage – which took up quite a lot of storage space. While the Wife wanted the Husband to take his chattel items, he said he had nowhere to store them and it is quite clear that he wanted them left at the home.
The Husband continued contributing to the home utility bills until late 2017.
Around this time the Husband “froze” the joint credit card. Since then, each party has paid one half of the minimum monthly credit card repayments.
For the first eighteen (18) months or so after separation, the Husband continued to pay half of the mortgage repayments. He ceased doing so around April 2018 from which time the Wife (with her parents’ assistance) began paying them in full.
The Husband paid X’s school fees at S School ($5,100.00 per annum) which was his preferred school for X. On that basis his child support payments were reduced by about $881.00 per annum down to $851.00 per month – which was still a significant level of support. That said, X had a number of health issues and the Wife’s role as primary parent should not be underestimated.
Overall assessment of contributions towards the net tangible property:
In my view the overall contributions substantially favour the Wife on account of her superior initial financial contributions, her parents’ unpaid loan and her superior parenting contributions. That said, the Husband also made significant contributions (including as a parent) which should not be underestimated.
I would assess the Wife’s contributions at seventy percent (70%) and the Husband’s at thirty percent (30%).
CONTRIBUTIONS TOWARDS THE SUPERANNUATION:
As at 30 June 2009, shortly before the relationship commenced, the Husband had superannuation of $64,440 (with K Super Fund). It is common ground that the Wife’s superannuation balance has always been nominal.
During the relationship, the Husband’s superannuation continued to grow as a result of his employer-funded contributions. He worked on a full-time basis as a sales manager. At one point he changed employers and super funds (to M Super). The Wife supported him in this by acting as the primary homemaker and parent.
It is common ground that at separation the Husband’s superannuation had grown to $126,704 (with K Super Fund) and $52,696 (with M Super Super). In recent times those balances have now increased to $151,100 and $86,451 respectively.
Some of the Husband’s current K Super Fund balance represents growth on that his pre-existing balance. Some of it relates to the post-separation period, during which the Wife has continued to act as X’s primary parent.
Overall, I would assess the Husband’s contributions at seventy-five percent (75%) and the Wife’s at twenty-five percent (25%).
Step 4 – Necessary adjustments for “future factors”:
Before considering any relevant “future factors”, it is helpful to set out what each party’s contributions-based entitlement is in dollar terms.
The Husband is entitled to thirty percent (30%) of the net tangible assets of $168,958. In dollar terms this amounts to $50,687.
The Wife’s seventy percent (70%) entitlement to the net tangible assets amounts to $118,271.
In respect of superannuation, the Husband’s seventy-five percent (75%) entitlement amounts to $179,145 and the Wife’s twenty-five percent (25%) amounts to $59,715. As the Wife already holds $1,309 in superannuation, there would have to be a superannuation split to her of $58,406.
Turning then to the future factors, the Husband is 48 years old, turning 49 later this year. He earns a weekly income of $1,840 which, after expenses, leaves him with around $200 in the hand. While he has some health complaints, these have not impacted his income-earning capacity.
Notwithstanding, his financial circumstances are modest. In a practical sense his post-separation living expenses have been subsidised by his mother and stepfather. Future home ownership may prove elusive; at the very least he will be under some financial pressure in the event he has to take out a mortgage.
The Wife is 46 years of age. Her health is impaired as she suffers from psoriatic arthritis, insomnia, fatigue, numbness in her fingers and she has difficulty standing for too long.
The Wife does not have any relevant work history. She was receiving Centrelink benefits when she first met the Husband and she has reverted back to being a Centrelink recipient since separation. Her income-earning capacity is substantially less than that of the Husband.
Moreover, the Wife has the ongoing primary care of X who has only recently turned nine (9). He requires significant support in terms of his learning and general health.
The Husband pays fairly substantial child support for X as assessed. Presently it is approximately $200.00 per week.
The Wife has recently removed X from S School and enrolled him at T School, apparently as recommended by X’s therapist and former teacher.[17] The Husband had wanted X to stay at S School and the parenting orders had specifically provided for him to pay the school fees for S School.
[17] Exhibit “12”
The school fees at T School are $5,612 per annum. The Husband has made no contribution. So the Wife is now paying the school fees herself.
The Wife is fortunate in that her parents have always provided her with significant financial assistance. Her trial affidavit makes clear that they are in a strong financial position and are ready and willing to assist her going forward. Realistically, she could not possibly retain the B Street, Suburb C property, or refinance the existing mortgage, without their assistance.
The Mother has re-partnered with another person but they do not co-habit.
There is insufficient divisible property here to enable both parties to live comfortably. The fact of the matter is that each of them is going to be significantly financially disadvantaged as a result of dividing the limited property they have. The court can only do the best it can having regard to the assets that the parties own but I am mindful that both parties ought to maintain a reasonable standard of living if at all possible.
Having regard to the Full Court’s decision in Robb & Robb (1995) FLC 92-555 I am also mindful of the maintenance, care and support that each party provided to the other party’s child during the relationship: s 90SF(3)(r).
In respect of the Wife’s daughter O, while her father paid child support for her, the Husband acted as the breadwinner for the family and thereby provided O with support throughout. He also no doubt assisted with her care albeit to some relatively limited extent given his work commitments.
In respect of the Husband’s son Q, the Husband did not receive child support from his mother during the relationship. The Wife took on a significant caring role for Q from the outset. He was only three (3) when the parties commenced a relationship and the Father was working work hours, particularly in the first three or four years. The Wife took on a major care role. In fact, she formed such a close bond with him that the Husband and Q’s mother soon agreed that the time Q spends with the Husband should increase from five nights a fortnight to an equal time arrangement.
The Wife usually took Q to daycare, and in later years would take him to and from school (or from “outside of school hours” care).
Conclusion as to “future factors”:
In my view the Wife has the greater overall need, given her lack of income and her ongoing primary care of X which also now includes her meeting his school fees.
Both parties have a greater present need for “cash”.
Weighing up the modest financial position of the Husband, and his own needs, I consider it appropriate to make an overall adjustment in the Wife’s favour of fifteen percent (15%) of the net tangible assets (including a two percent (2%) adjustment pursuant to Robb & Robb) and ten percent (10%) of the superannuation assets. The superannuation adjustment also reflects the fact that the Wife will be continuing as X’s primary carer going forward, ie. she will be indirectly continuing to support the Husband to continue his employment which carries with it employer-funded superannuation contributions.
Step 5 – Ensuring a “just and equitable” outcome:
On the basis of the above analysis:
(a)the Husband would retain fifteen percent (15%) of the net tangible property ($25,343); and sixty-five percent (65%) of the superannuation ($155,259);
(b)the Wife would retain eighty-five percent (85%) of the net tangible property ($143,615) and thirty-five percent (35%) of the superannuation ($83,601).
I consider that such an outcome would be “just and equitable” in the circumstances of this case.
Should the B Street, Suburb C property be sold?
The Husband seeks sale of the B Street, Suburb C property on the basis that its value may have increased since trial. The Wife opposes the sale as she seeks to retain the property at its agreed value of $750,000 on the basis that her parents will assist her to refinance the mortgage.
I have agonised over this aspect of the matter as there is an injustice which ever road the court takes.
In the end I am not minded to order the sale of the B Street, Suburb C property. The trial was conducted on the basis of an agreed value. At best, the Husband suggests that there may have been some movement in the market since then, but he did not seek to re-open the evidence. His submission that the property should be sold comes very late and inevitably involves costs and stresses for both parties, but particularly for the Wife and X.
In circumstances where the property has always been X’s home, and noting his particular difficulties, it is just and equitable to permit the Wife to retain the property provided she pays the Husband the cash sum to which he is entitled within three (3) calendar months. If she does not do so then a sale is inevitable.
Disputed chattel items
In relation to the disputed chattel items, each party contended for very detailed and specific orders. Though not her initial position, the Wife ultimately did consent to returning the overwhelming bulk of the chattels the Husband was requesting.
The evidence as to the ownership and past use of the various chattels is “thin” at best. Neither party devoted any of their trial Affidavit material to the chattels. The chattel debate really only emerged in the course of cross-examination and, if anything, only made the matter more acrimonious and expensive for all concerned.
With all due respect, I have little doubt that the legal costs the parties have expended in arguing about chattels are disproportionate to their value.
I have compared each party’s proposed chattels order. The Wife is agreeing to return the overwhelming bulk of the property that the Husband seeks. To the extent their lists differ, the items in dispute are likely to be of nominal or even de minimis value. The Wife is only keeping a modest number of items from the Husband’s requested list - although in saying this I accept that she is retaining whatever other property still remains in the home.
This case needs to end. Including the handful of additional items sought by the Husband risks further litigation and argument. These parties need to move on.
I consider that it would be just and equitable to make the form of order sought by the Wife. A removalist needs to be engaged given the conflict, the lack of trust and the Wife’s stated fear of the Husband. I will also include her proposed notations, which are self-explanatory.
To be clear, I do not require the Wife to return each and every one of the Christmas lights as the Husband requests. Though during the relationship the Husband was much more interested in the Christmas lights than the Wife was, his request to now keep them is unreasonable. Surely the Wife and X can keep a modest number of the Christmas lights at home?
Likewise the Wife should have access to at least some tools, garden implements and the like. It is just and equitable for her to retain the 12 plastic drawer set with silver metal frame; it has been in her possession now for nearly 4 years and its value is nominal.
I do not propose to address any of the other disputed chattels; to do so is an exercise in vexatiousness.
Conclusion:
For these reasons the court makes the orders set out at the commencement hereof.
I certify that the preceding one hundred and thirty-seven (137) paragraphs are a true copy of the reasons for judgment of Judge Betts
Associate:
Date: 21 October 2020
Appendix
"1"
1. Following property of U Company:
a.Dell Monitor
b.Dell Keyboard
c.Dell Docking Station
d.Dell Mouse
e.e. Epson A3 Printer
f.f. 1TB Hard Drive
g.g. Assorted Office Stationary
2. Following property of Q:
a.Bedroom Furniture (All Matching)
i. King Single Bed
ii. Bedside (Single Draw with Glass top)
iii. Tall Boy
iv. Desk
v. Desk Draw Unit
b. Small Duke Box
c. Electronic Drum Kit
d. Personal Affects / Clothing / General Property
e. Toys/ Games
f. Collectables (cartoons)
g. Wall Hangings
h. Train seti. Diecast Car Collection
3. Following property of Mr Pearcey:
a. Personal Affects/ Clothing/ General Property
b. Family Heirlooms (Pearcey Family)
c. Framed Navy Flag (Late Father's)
d. 8mm Home Movie Reels (Late Father's)
e. Boeing Framed 3 Picture Commemorative
f. Photos4. LG 55inch Television & Remote (Previously Located in Downstairs Family Room)
5. White TV Unit with 3 Draws (Horizontal Mounted) (Previously Located in Upstairs Lounge Room) ·
6. Brown 6 Seater plus Chase Corner Lounge (Previously Located in Downstairs Family Room)
7. Stainless Steel Double Door Refrigerator (Previously Located in Alfresco)
8. 6 Burner Stainless Steel BBQ with Wok Burner, sink and 1 x 9kg gas bottle (Previously Located in Alfresco)
9. Treadmill (Previously located in Master Bedroom)
10. Following Garage Contents:
a.Timber Shelve Kits (Those Assembled & Un Assembled) except for two
b.Following Power Tools:
i. Drop Saw
ii. Sliding Drop Saw
iii. Circular Saw
iv. Drill Press
v. Hammer Drill
vi. Battery Drill x 2 (Including Batteries & Chargers)
vii. Hand Held Grinder
viii. Bench Grinder
ix. Sander
x. Jigsaw
xi. Router
xii. Planer
c.Following Hand Tools:
i. Bench Vice
ii. Hand Saw
iii. Tenon Saw
iv. Hack. Saw (Standard)
v. Hack Saw (Small)
vi. Jab Saw
vii. Rubber Mallet
viii. Spirit Levels x 4
ix. Shifters ( 4 Sizers)
x. Ring Spanners/ Wrench (Set)
xi. Ratchet Ring Spanner Set (5 Piece)
xii. Socket Set with Ratchet (Small)-Yellow Stanley
xiii. Socket Set with Ratchet (Large)- Likely to be Grey Hard Case ·
xiv. Claw Hammer
xv. Cross Pein Hammer
xvi. Sledgehammer
xvii. Long Nose Pliers
xviii. Multigrip / Vice Grip Pliers
xix. Allen Key Set
xx. Allen Key Set for Ratchet (White)
xxi. 9 Piece File Set
xxii. Cable Tie Cutter (Blue)
xxiii. Hole Punch
xxiv.Conduit Cutters
xxv. Flat Blade Screwdriver Set (Yellow Handle)
xxvi.Philips Head Screwdriver Set (Green Handle)
xxvii. Electrical Screwdriver (Red Handle)
xxviii. Micro Screwdriver Set (Yellow)
xxix.Sliding Square
xxx. Framing Square (2 Sizes)
xxxi.Try Square (2 Sizes)
xxxii. Longer Stainless Steel Ruler
xxxiii. Shorter Stainless Steel Ruler
xxxiv. Upholstery Stapler
xxxv. Drill Bit Set
xxxvi. Spade Bit Set
xxxvii. General Purpose HoleSaw Kit
xxxviii. Chisel Set
xxxix. String Lines x 2 (1 x Pink/ 1 x Yellow)
xl. 2 x20 Draw Storage Units (Small Draws) & Contents
xli. Approximately 40 Glass Jars Containing Sorted Screws,
xlii. Nuts, Washers, Bolts Etc. Etc.
d.Draw Filing Cabinet (Used to Store some of the Power Tools)
e.Following Garden Equipment:-
i. Petrol Lawn Mower & Catcher
ii. Petrol Whipper Snipper (Inc Edger Attachment)- Edger attachment was in garage ·
iii. Petrol Blower Vac
iv. 2 x Jerry Cans (Black Plastic)
v. Wheel Barrow
vi. Garden Fork
vii. Spade
viii. Shovel
ix. Long Handle Plumbers Shovel
x. Trenching Shovel
xi. Garden Hoe / Mattock
xii. Fencing Bar/ Long Crow Bar
xiii. Hatchet
xiv. Axe
f.Worx Pressure Washer
g.A-Frame Ladder
h.2 x Saw Horses
i.Adult Mountain Bike
j.My Property Originally Stored At No 9 (A Property Owned By Ms Seagren’s Parents)
i. Rocking Horse
k.Following Christmas Lights
i. Short Multi Coloured Strand (2 x 600 lights)
ii. Short Blue Strand (7 x 200 Lights) .
iii. Icicles (1 x 400 Lights)
iv. White Cascading (2 x 70 Lights)
v. Large Round Colored Net (1 x 240 Lights)
vi. Fire Ball Poles (1 x 75 Lights)
vii. 2.15 x 1.15 Coloured Solar Net (1 x 105 Lights}
viii. Warm White Garden Stakes (2 x 16 Lights)
ix. Giant String Light Christmas Tree ( 1 x 400 Lights)
x. Santa Stop Here Poles (1 x 60 Lights)
xi. Small Green Tree Rope ( 1 x 35 lights)
xii. Inflatable Snow Man
xiii. xiii, Bethlehem 8 Pointed Star
xiv. 6ft Spiral Tree (2 x 540 Lights)
xv. Shooting Star (1 x 108 Lights)
xvi. Santa Star (1 x 324 Lights)
xvii. Skating Penguin
xviii. Santa Stop Here (1 x 432 Lights)
xix. Small Merry Christmas
xx. Bells (1 x 270 Lights)
xxi. Red Solar Berry (1 x 24 Lights)
xxii. Large Shooting Star
xxiii. Female 3D Deer (1 x 432 Lights)
xxiv.Male 3D Deer(1 x 504 Lights}
xxv. 3D Helicopter
xxvi.Chimney Santa
xxvii. Green 9 Mtr Rope (1 x 324 Lights)
xxviii. Red 9 Mtr Rope (2 x 324 Lights)
xxix.Blue 9 Mtr Rope (2 x 324 Lights)
11. Following miscellaneous items:
a.Outdoor 8 Seater Glass Table & Chairs
b.Remote Control Cars & Boats
i. Timber Side Table From Front Lounge Ro.om
ii. Leather Tool Belt
c.Protective Knee Pads
d.Cable Ties
e.Whipper Snipper Line
12. Following property belonging to Mr L:
a.Temporary Fencing
i. 1 x Galvanised Steel Gate Panel + Latching Bracket
ii. 1 x Galvanised Steel Gate Panel
iii. 1 x Cream Gate Panel
iv. 1 x Galvanised Steel Gate Post
v. 2 x Galvanised Latch Hinges
"2''
1. The garage remote control for B Street, Suburb C.
2. All keys for B Street, Suburb C in the husband's possession or control.
3. Multi Coloured 12 Plastic Draw Set, with Silver Metal Frame
4. 1 x 9kg Gas Bottle.
5. Red 4 Drawer Filing Cabinet (Previously Located in Study)
6. White "L" Shaped Office Desk with Grey Legs (Previously Located In Study and now used by X)
7. Built-in garage work Benches (Including Shelves) x 2 with Joining Piece that had accommodated the Sliding Drop Saw
8. 2 x Timber Shelve Kits (Those Assembled & Un Assembled)
9. Following Hand Tools:
i.Side Cutters
ii.Combination Pliers
iii.Grip Clamp x 4(Blue)
iv.Medium Size Blue Crow Bar (gift from mother)
10. Extension ladder
11. Following Christmas Lights
i.Long Multi. Coloured Strand (10 x 600 Lights)
ii.Long White Strand {1 x 600 Lights)
iii.Short White Strand (8 x 200 Lights)
iv.3D Star Burst - Blue /White (2 x 160 Lights)
v.White Tree (Blue Lights) (1 x 240 Lights)
vi.Inflatable Santa
vii.HO HO HO - Red / Green (1 x 350 Lights)
viii.4 in 1 Star (3 x 196 Lights)
ix.Large Merry Christmas (1x 448 Lights)
x.Christmas Countdown (1 x 144 Lights)
xi.Laser Lights (3)
xii.All Other Christmas Lights Not Noted
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Contract Law
Legal Concepts
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Remedies
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Injunction
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Costs
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Damages
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Contract Formation
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Offer and Acceptance
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