Perkins & Perkins

[2007] FamCA 79

FAMILY COURT OF AUSTRALIA

PERKINS & PERKINS [2007] FamCA 79

FAMILY LAW - PROPERTY – Settlement in relation to marriage – Asset pool agreed – Very few assets for distribution – Appropriate not to include superannuation – Parties agreed contributions up until separation equal – Wife claims a greater post-separation contribution as the husband received all the benefit of proceeds of sale of the former matrimonial home – Wife had to purchase her own home from proceeds of her own labour and without the benefit of child support due from the husband – Wife’s contributions double those of the husband – Wife should be entitled to 70% of very small asset pool – Wife has primary care of two young children – Husband in a slightly better financial position than wife – Extra 5% adjustment for wife’s future needs – Overall division of 75% of property pool to wife just and equitable.

COSTS – Costs ordered by Registrar against husband stayed to trial Judge – Stay lifted – Husband to pay costs within 90 days.

Family Law Act 1975 (Cth)

Coghlan (2005) FLC 93-220
Hickey and Hickey and the Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143.
Scott and Scott [2006] FamCA 1379

APPLICANT: MRS PERKINS

RESPONDENT: MR PERKINS

INDEPENDENT CHILDREN’S LAWYER: CHARLES BECKWITH

FILE NUMBER: DGF 2375 of 2002

DATE DELIVERED: 31 January 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: CRONIN J

HEARING DATE: 22 January 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: MS SWART

SOLICITOR FOR THE APPLICANT: ANN E GAMBETTA & ASSOCIATES

THE RESPONDENT: IN PERSON

INDEPENDENT CHILDREN’S LAWYER COUNSEL: MR LARKINS

INDEPENDENT CHILDREN’S LAWYER SOLICITOR: MR CHARLES BECKWITH

Orders

1. That by 4.00pm on 1 May 2007 (“the date”) the husband pay to the wife $16,000 (“the sum due”).

2. That contemporaneously with the payment of the sum due, the wife discharge at her expense, any caveat lodged by her or on her behalf, over the real property at W being the land described in Title Reference … (“the [W] property”).

3. That in default of payment of the sum due by the date, the husband do all acts and things required to transfer to the wife on a trust for sale (“the trust transfer”) all of his legal and equitable interests in the W property whereupon it shall be forthwith sold by public auction on terms to be agreed including as to the appointment of a conveyancing practitioner and in default of agreement, on such terms (save as to the conveyancing) as a qualified Queensland real estate (“the agent”) shall determine.

4. For the purposes of Order (3) hereof, the agent and conveyancing practitioner shall be appointed pursuant to Rule 15.45(1) of the Family Law Rules.  If there is disagreement between the parties, a registrar in chambers shall thereafter make any necessary orders under Rule 15.46(b), (d) and (f) of the Family Law Rules to give effect to these orders. 

5. Further, for the purposes of Orders (3) and (4) hereof the agent so appointed shall thereafter be the agent for all purposes associated with the sale of the W property and the conveyancing practitioner so appointed shall thereafter be the practitioner in respect of the conveyancing concerning the sale of the W property.

6. Upon the settlement of the sale of the W property, the proceeds shall be applied as follows:

   (a)       first, to pay the costs, commissions and expenses of the said sale;

   (b)       secondly, to discharge the encumbrance to Suncorp Metway;

   (c)       thirdly, to pay to the wife

   (i)the sum due;

   (ii)the interest accruing on the sum pursuant to the Family Law Rules from 1 May 2007 until payment;  and,

   (iii)the costs referred to in paragraph (7) hereof if still unpaid.

   (d)       fourthly, to pay to the husband, the balance.

7. The husband pay the costs of $576 ordered on 8 September 2006 by 4.00pm on 1 May 2007.

8. That until the payment of all sums due to the wife pursuant to paragraphs (1) and (7) of these orders, the husband be and is hereby restrained from selling, disposing or otherwise encumbering the W property other than for the purposes of compliance with paragraph (1) and (7) hereof.

9. Each party otherwise retain and relinquish any interest in, all other property and accruing superannuation entitlements, in the possession or control of the other party.

10. The amended application of the wife filed 17 November 2006 and the response of the husband filed 26 April 2004 are otherwise dismissed save as to any applications for costs arising out of these orders.

11. The proceedings shall be removed from the list of cases awaiting a hearing.

IT IS CERTIFIED

1. That pursuant to Rule 19.50 of the Family Law Rules it was reasonable to engage a lawyer as counsel.

2. All material provided under subpoena shall be returned to the provider of those documents.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: DGF 2375 of 2002

MRS PERKINS

Applicant

And

MR PERKINS

Respondent

REASONS FOR JUDGMENT

1. These are proceedings between the husband and the wife in relation to the division of property.

2. The parties resolved their dispute about their children at the very outset of the hearing and I made orders by consent.  Those orders were prepared with the assistance of counsel for the Independent Children’s Lawyer.  As the parenting orders covered all outstanding matters concerning the children, the Independent Children’s Lawyer was discharged from the proceedings and took no further part.

3. Throughout the hearing, the husband was not legally represented.  He lives in Queensland and flew down specifically for this hearing.

4. The case was listed as a primary fixture because of the fact that the husband lived interstate.  At the commencement of the hearing and throughout, I endeavoured to explain to the husband not only how the proceedings were to be conducted but also the relevant provisions that I was required to follow to make a decision under Part VIII of the Family Law Act 1975 (Cth) (“the Act”). 

5. The husband is an intelligent and articulate man.  I am satisfied that he understood the process.

6. The husband made an application to have the final hearing of his case heard by telephone.  That application was heard by Brown J on 16 January 2007 and her Honour gave reasons for refusing it.

7. The Court had set aside two days for the hearing but the husband told me that he had to catch a plane back to Queensland by 7.00pm on the first day.  He indicated that no-one had told him that it would be a two day hearing but I have some difficulty with that having regard to the fact that when reading the reasons for judgment of Brown J dated 16 January 2007, her Honour made it clear that the Court was anticipating a two day hearing.

8. No indication was given by the husband as to what documents he was relying upon notwithstanding the quite clear orders of the pre-trial conference made on 1 November 2006.  That problem was overcome at the commencement of the hearing by a discussion with the husband in which he told me that he was relying on his affidavit most recently filed on 16 November 2006 and his financial statement filed on 24 October 2006.  That material was limited and it was only when the husband was cross-examined by counsel for the wife about an affidavit filed in 2004 that a better picture of his case became evident.

9. To some extent, the inadequacies of the material and the confusion about what was to be read can be justified notwithstanding pre-trial orders having regard to the fact that the husband was unrepresented.  The wife who was represented failed to comply with the pre-trial orders either.  Chapter 15 of the Rules requires an affidavit by a party to be filed and it is not appropriate for a party to simply refer to all of the affidavits that they may have filed.  In this case, to understand the evidence of the wife, I have read and relied upon her affidavits filed 12 December 2005 and 17 November 2006 together with the financial statement on 17 November 2006.  In addition, I gave leave to the wife to lead some further evidence in chief.

10. Much of the evidence about disputed matters was not corroborated by documentation.  When challenged about the fact that there were no documents presented to the Court, the husband said that he had given them to the Court previously and in addition, given copies of them to the wife’s previous “five lawyers”.  Counsel for the wife indicated she did not have them.  It is interesting to note in par 9 of her reasons for judgment dated 16 January 2007, Brown J said:

    [Husband], you must be here if you want to take part in the trial, and bring with you all documents and other relevant material.

11. As I shall set out, it has been difficult to determine exactly what happened in some instances between the parties in circumstances where there were clearly documents available.  The husband did not have them and nor did the wife and there was no indication that they were readily available on the court file.

12. In the circumstances, I have determined the matter on the basis of the evidence presented to me and made findings as best I can in the circumstances based on the presentation of each party.  Having said that, the evidence from each party was less than satisfactory.

Background

1. The husband is aged 42 years and is a salesman working in Queensland.  He told me that he has remarried but I know nothing about those details other than the sketchy financial position set out in his financial statement and the matters to which I shall refer hereafter.

2. The wife is aged 40 years and is a nurse by profession.  As best I can determine, both parties enjoy good health.

3. The parties commenced their relationship in April 1989 and then began living together.  They were married in June 1991 in Fiji.  When they married they had no assets of substance. 

4. There are two children of their marriage, E born in June 1994 who is now aged 12½ years and R born in December 1997 who is currently aged nine years.  Both children reside with the wife.

5. As I mentioned earlier, I have made orders in relation to the children with the consent of both parties.  The terms of those orders are:

   2.That the Husband and Wife have equal shared parental responsibility for the children:

   FULL NAME  DATE OF BIRTH

   [E]  [June 1994]

   [R]  [December 1997]

   3.        That the children live with the Wife.

   4.That the children spend time/communicate with the Husband as follows:

   (a)In Queensland for three weeks during the Victorian Gazetted long summer school holidays from 1 to 21 January in each year;

   (b)By telephone at reasonable times including 7.00pm Sunday and 7.00pm Monday;

   (c)At other times by mutual agreement between the parties.

   5.        That for the purpose of the Husband' s time with the children:

   (a)In reference to paragraph 4(a), the Husband pay the cost of the children's return air travel from Melbourne to Brisbane. The Husband to notify the Wife not later than 1 December in each year of the travel arrangements and changeover times.

   (b)The Husband provide at least three weeks notice to the Wife if he does not intend to take up the holiday arrangements

   (c)Collection and return of the children for the purposes of changeover continue to be at McDonalds Restaurant, [D] in the State of Victoria.

   (d)That the Paternal Grandparents (who are resident in Victoria) may facilitate the changeover on behalf of the Husband.

   6.That both the Husband and Wife communicate with each other concerning parenting issues via email and not through the children.

   7.That both parents attend a Post-Separation Parenting Course to assist them to manage their shared parental responsibility for the children respectively.

   8.That the child [E] be permitted to be enrolled by the Wife in a Private School.

   9.That the Husband and the Wife not discuss with the children Family Law matters or allow third parties to do so.

6. The new parenting orders provide for the husband to spend time with the children which is limited to school holidays because of the tyranny of distance between Melbourne and Queensland.

7. The parties finally separated in June 2002 when the wife moved away from Queensland with the children and came to live in Melbourne.

8. Thereafter, there was a succession of court hearings, some of which the husband did not attend, others he attended by telephone and others again, he came to Melbourne to try and resolve matters.  There have been trial notice hearings, pre-trial conferences on a number of occasions and the case went into the defaulter’s list.  There has been confusion about dates with hearings being changed.  For those reasons, I determined that I would do whatever was necessary to enable the parties to obtain a final resolution notwithstanding the inadequacies of the material.

The applications of each party

1. The wife’s amended application for final orders was filed on 17 November 2006.  In that application, she sought simply that the husband pay to her the sum of $17,000 and that she give up all of her right, title and interest in the husband’s home in Queensland. 

2. At the opening of the hearing, counsel for the wife sought $23,800 rather than the $17,000 that the application had sought in November.

3. The husband’s response was the original one filed on 26 April 2004 and he simply agreed with the original application sought by the wife in respect of property matters namely that “there be a property settlement pursuant to s 79 of the Family Law Act”.

4. However, at the hearing, the husband said that he did not think that he “owed” the wife anything and after discussion, I interpreted that position to mean that he wanted her application dismissed.

The pool of assets

1. I pointed out to the parties that it was impossible to determine the property division until there was a defined pool of assets.  After some discussion between the parties, an aide memoir which is now Exhibit W5 was handed to me.  It is in the handwriting of counsel for the wife but endorsed by the husband that somewhere in the process, recognition had to be made of $21,000 “goods supplied” by him.

2. In the pool as handed to me, is the description of the home in Queensland to which the wife refers in her application as being worth $225,000 but subject to a mortgage to Suncorp for $180,000 leaving an equity of $45,000.  However, it soon became clear that although that property is in the name of the husband alone, he has remarried and there appeared to be a claim by his present wife to an equitable interest in it.  Although the husband’s new wife may very well have had constructive notice of these proceedings, it was common ground that she had not been made a party to the proceedings nor served with any documents.  However, that dilemma evaporated when I was advised by the parties that rather than equity of $45,000 to be added to the pool, I was to halve it so that the husband’s interest was to be treated as $22,500. 

3. Accordingly, as at the date of trial, the parties’ assets appear to be as follows:

Wife

E  $240,000

Less mortgage, Commonwealth Bank   228,000

Net  $12,000

Toyota Corolla 1985  500

Superannuation H  4,000

Bank Bendigo  600

Husband

W, Qld  $225,000

Less mortgage, Suncorp   180,000

Equity   45,000

Less wife’s interest   22,500  $22,500

Kia vehicle   $5,000  

Less GMAC load  2,000  3,000

Superannuation  5,000

Also on the aide memoir is a list of liabilities of the husband including credit cards, to a retail store for a television, the National Bank of New Zealand and child support arrears of between $1,200 and $1,400.  For reasons to which I shall turn below, all of those debts have been treated as personal liabilities of the husband for the purposes of the division as between the parties.

1. Leaving aside the wife’s Bendigo Bank account of $600 and the $21,000 “goods supplied”, the pool of assets to be divided between the parties was a very modest $38,000. 

2. As will also be seen below, the wife’s house at E has been a recent acquisition by her and although the equity of $12,000 is obvious, I was advised from the Bar table that that had come about through a first home buyer’s grant and some savings.

The dispute

1. Although the parties married in Fiji, they lived in New Zealand during which time the husband owned a convenience store and had a full-time job as a manager.  The wife looked after the convenience store during the day with the help of the husband’s father who was living with them during those early years.  In addition, the wife worked during the evenings at a fast food outlet.  She asserted, and it was not challenged, that she managed to save about NZD5,000 during that time.  All of this occurred before they were married and they returned to Fiji to marry only to return to New Zealand thereafter.  The husband then purchased another convenience store using a business loan for the acquisition.  The wife asserted, and it was not challenged, that she had contributed her savings towards the purchase of that business.  Both parties worked in the store.  However, by October 1993 the business proved unsuccessful and according to the wife, the bank repossessed it.  The parties then moved to Auckland where they were on government benefits until the husband obtained a job as a sales representative.  The wife then obtained work as a personal care attendant in an aged care facility in Auckland but that work ceased during her pregnancy with the first child.  After the first child was born, the wife stayed home and cared for the family until her own mother came to New Zealand and she was able to return to work.

2. There was an unusual twist in the relationship in that the parties separated for a short time in 1996 whereupon notwithstanding that they were still married, the husband went to Fiji and married another woman to whom he had a child.  The significance of this relationship was that although that relationship soon ended, the child is now the subject of a New Zealand child support assessment obligation of the husband.  The wife says that she was not aware of the existence of the second wife and her child until some time later after the parties had not only reconciled but purchased a house in New Zealand.

3. In 2000 the parties left New Zealand and moved to Queensland.  In doing so, the wife said that her mother paid for the cost of the container to ship their household items.  That was a payment of NZD3,000.

4. In Queensland, the parties rented a home and the husband obtained full-time employment as a sales representative whilst the wife did cleaning work with an agency.  In her affidavit, the wife referred to the fact that the parties pooled their income.  The husband cross-examined the wife about that issue and more particularly, what happened to the earnings that she had in that period of time.  She said that until they purchased the house, she was working in the cleaning agency, collecting the cheques and putting them into an account in her name only with Suncorp Metway for which she paid the agency commission, the rent on the house in which the parties were living, electricity and telephone accounts.  Apparently that ended in 2001 when the wife ceased working.  The husband was at pains to point out that it was in fact he who paid the rent and after they purchased the house, he paid the mortgage.  He did concede that the wife paid for the swimming lessons.  He claimed that the wife was putting her money aside and that it assisted her in what he described as the pre-planned move away from Queensland.

5. Having observed both of the parties, I accept the evidence of the wife that her income was used for household purposes.

6. Some time in or about January 2002, the parties acquired the property at R in the husband’s name alone.  It appears common ground that the purchase price was $101,000 and financed by way of a mortgage with Aussie Home Loans.

7. The husband said that the purchase was in his name only because the wife was not interested but in the affidavit which was cross-examined upon filed 26 March 2004, the husband said that he had applied for the first home owners’ grant and that under the “Rules” of that grant, the property had to be purchased in his name.  Nothing turns on this issue that would require me to make a finding of fact.

1. Having moved into the home, the parties began having difficulty with the tenants who were then residing in the New Zealand home that they had left behind when they came to Australia.  The wife said that as the tenants were always in arrears of their rent, the mortgage was always in arrears as well. 

2. In her affidavit filed 12 December 2005, the wife said that she agreed to sell the New Zealand property on the basis that it would be sold for sufficient sum to clear the mortgage and other debts and she executed the necessary paperwork accordingly.  She said that the house was sold and she assumed that all the debts were paid only to find after these proceedings commenced that that was not the case.  In her affidavit filed 17 November 2006, the wife referred to the fact that the house was actually “repossessed” by the bank with a debt of $24,000. 

3. The husband’s version was that the parties lost the house and he thought that there was a debt in New Zealand of $24,000.  In the affidavit filed 26 March 2004, the husband said that he was actually served with a summons in respect of the unpaid debt and he made an arrangement with the mortgagee bank by cashing rebate vouchers that he had had with a company that he had an association with in New Zealand.  When he redeemed those vouchers, they had a value of $10,100.  In that affidavit, he claimed that there was a shortfall of NZD18,000 after the sale.  The various versions were confusing.

4. In cross-examination of the husband, he was shown a letter from the bank indicating that the debt had been “wiped-off”.  He expressed some surprise at that but accepted that it was probably right.

5. Accordingly, how and why the debt came to be “wiped-off” was not explained by either party but it makes a difference in the sense that the original aide memoir setting out what the parties thought were their assets and liabilities no longer needed to have any reference to a debt to the bank in New Zealand in respect of their former home there. 

6. Having agreed to sell the house in New Zealand, the parties separated in June 2002.  They were not even able to agree upon how the separation occurred.  In her affidavit dated 12 December 2005, the wife referred to the fact that she had been unable to find a suitable job as a result of which the husband asked her to leave saying that he could no longer look after she and the children.  She said as a consequence, she came to Melbourne in June 2002.  The wife was cross-examined by the husband about this and she described it as a situation in which she was “asked to pack” and she then “fled” to Melbourne.

7. The husband complained in par 7 of his affidavit filed 16 November 2006 that he did not know where his children were for three months after they were “taken from Queensland” and that he was told by a registrar that he could not force his wife to allow him to see the children and accordingly, he did not see them for one year and seven months.

8. The wife, however, when cross-examined by the husband, said that she contacted him within six weeks of moving to Melbourne and that she found accommodation on 20 July 2002 in D.  She said that she contacted the husband who spoke to the children and that he came down to Melbourne in September or October of that year bringing the various items to which I shall refer shortly.

9. In so far as it may be relevant, I am satisfied that the wife did move to Melbourne as she describes and notwithstanding that the husband asserted that he did not see his children for one year and seven months, I find that there was only a gap of about three months in those visits after the children moved to Melbourne.

10. Having come to Melbourne, the wife applied for a pension only to find that during the period of the marriage, she and the husband through her bank account, were overpaid Centrelink benefits and accordingly, a sum of nearly $5,000 had to be repaid.  The wife paid this sum back and no contribution was made towards it by the husband.

11. Two months after the separation in June 2002, the husband sold the Queensland home.

12. As I mentioned earlier, there were no documents tendered to give precise details of what money came out of that sale. 

13. The husband was cross-examined about par 11 of his affidavit filed 26 March 2004 in which he said that the sale price was $127,000 but from which he deducted $101,000 being the purchase price being giving a gross profit of $26,000.  After the deduction of the real estate commission and advertising cost, there was a balance of $21,772.50.

14. The annexure to that affidavit certainly shows that the house was sold for $127,000 but what was not available, was the balance of the mortgage at that time and the reference to profit used in par 11 to which I have referred was unhelpful.

15. The husband was cross-examined about the fact that the mortgage was not $101,000 but about $11,000 less and that rather than have in his hand $21,772, there was over $31,000. 

16. Counsel for the wife came at the same question a number of different ways to establish just what the mortgage was when it was paid out.  I am not in the position to make any finding of fact about this nor would it make very much difference unless that amount of money was used for some purpose such that it was not reflected in the pool of assets for division.  The wife was unable to point to anything that might suggest that the husband had definitely used it in some way and I was not prepared to draw inferences against the husband.  The parties had had ample time over the last two years to pursue this issue.  Attached to the husband’s affidavit filed 26 March 2004 was a bank statement showing that as at 1 November 2002, an account held $24,351.87.  Neither party was able to precisely point out when the settlement of the house sale took place because although the contract documents said 27 September 2002, the husband said that it settled later. 

17. Accordingly, I am left with the strong impression that the only amount of money that came out of the sale of the Queensland home was $21,772.50.

18. What then occurred was rather odd.  The husband said that of those house proceeds, he deposited $20,000 on 2 November 2002 into a bank account in the name of his children which was operated by the wife.  In his affidavit filed 26 March 2004, he said that he spoke to the wife and told her that it was her share of the proceeds of the matrimonial home.  He went on to say that what he meant was that as the wife had taken whatever she wanted from the home, this was the only asset left to be divided.  He said that the wife’s share was $10,000 and $10,000 was his share and “recognising” his responsibility to his children, he chose to give his share of $10,000 to the children and hence the deposit of $20,000 into the bank account.  He said that some weeks later, he received a telephone call from the wife saying that she was returning $15,000 of the $20,000 because she was “not good at managing money” asking him to invest the money for the children.

19. However, in his affidavit filed 16 November 2006, the husband said:

    The applicant returned $15,000 after few months (sic) as the centre link (sic) stopped her payments and she had to explain them regarding the money.  With both our understanding (sic) I invested the money into a company that I formed with other partners called [I] (sic) this money went to set the business up but after a falling out with the company I was voted out and I had no real paperwork with me and this is still under investigation.

20. It is hard to reconcile the husband’s own two versions.

21. For her part, the wife said that the husband did not tell her that the $20,000 was her share of the proceeds of the sale of the house but rather that the money was deposited into the children’s account because the bank was chasing him.  She then went on to say that in or about the end of December 2002, the husband came to Melbourne wanting a reconciliation and some weeks later, asked if he could have $10,000 back to use as a deposit for the purchase of a house which would be their future matrimonial home and later again, he asked for a further $5,000 to purchase a car for the wife.

22. The wife was adamant that Centrelink knew nothing about the money in the children’s account and had not raised it with her. 

23. I accept the version of the wife.

24. Notwithstanding that, I am not at all confident that I understand where the money ultimately went nor whether it has any great significance in the ultimate determination of these matters.

25. There was also a dispute between the parties about the investment of $15,000 in
    I Pty Ltd.  In his affidavit sworn 8 November 2006 and filed on 16 November 2006, the husband as I have earlier mentioned, said that the question of this investment was “still under investigation”.  However, it was accepted by both parties that it was of no consequence or value and accordingly, was not included in the asset pool.  This was despite the fact that at various times throughout 2006, the valuation of that business was to be undertaken and that did not occur.

26. The only significance in this issue therefore, is a claim by the wife that the $15,000 she gave back to the husband ultimately ended up in I Pty Ltd.  According to the husband and it was not challenged by the wife, the amount of $15,000 appears to have gone from the husband across to the company in dribs and drabs.  According to the husband, it was paid over a period of two years.

27. I am therefore not able to make any concluded finding that the money given back by the wife to the husband totalling $15,000 ever ended up in I Pty Ltd.  Various assertions were put to the husband by counsel for the wife in relation to this and he was adamant that those assertions were wrong.  To the extent that it might be said by the wife that that money was wasted by being invested in I Pty Ltd, I reject that.

28. In or about 2003, the husband purchased two properties.  The first was S for $115,000.  To buy this property, the husband said that he borrowed $10,000 from his sister.  When the husband was challenged about this in cross-examination, he said that he had provided the bank statement a number of times to the wife’s “five lawyers”.  He said that he was buying run-down houses and doing them up for the purposes of selling them for a profit.  He said his sister put the money in and his job was to do the maintenance. 

29. When he eventually sold the S property, he conceded that he only paid his sister $8,000 whereas she had previously provided $10,000 to the venture.  He said that the explanation for the difference was that he later paid her in white goods.  It must be remembered that the husband works for a white goods company.

30. The husband then purchased the property that he now resides in with his current wife at W.  He said that he paid $205,000 for it and as can be seen from the pool of assets above, the bulk of the funds were borrowed.  He maintained the property was run-down and that again, his sister made an advance to him of $5,500.  Attached to his affidavit filed 26 March 2004, was a receipt into the Suncorp Metway bank account showing $5,500. 

31. Again, because of the fact that the husband was emphatic about the precise details and the wife was vague in making the assertions two years after these proceedings commenced, I have little hesitation in this case in accepting that the husband’s version of the buying and the selling of those properties and the provision of money by his sister, was correct. The husband makes no claim that he still owes his sister any money.

32. In early 2004, the husband signed a contract for the sale of the W property at a contract price of $270,000.  The wife lodged a caveat.

33. An order was made by Young J on 5 March 2004 that the proceeds of the sale be held on trust pending finalisation of matters.  The husband complained that the wife refused to withdraw the caveat as a consequence of which, the purchaser of the W property withdrew from the contract and the husband “lost $70,000”.

34. The wife’s version was that at the time the orders of Young J were made, she was unrepresented and when asked to remove the caveat, she agreed that she would if the money was placed into a solicitor’s trust account.  She said that the husband refused to do that and the sale was lost.  It must be noted that the sworn valuation from the single expert now has the property valued at $225,000. 

35. There was no evidence put to me about the lost sale.  The husband pointed to a letter dated 27 January 2006 from the solicitors who had acted for the purchaser confirming the contract had terminated and insisting that their client receive the $13,500 deposit back.  As I pointed out to the husband, that did not establish the loss.

36. I am unable to conclude that the wife had taken any step which had the effect of creating a loss for both she and the husband let alone the husband.  I do not have any correspondence indicating what the wife’s position was.  I do note that the husband filed an affidavit in the Dandenong Registry of this Court on 1 February 2006 but which appears to have been sworn on 13 January 2006.  He did not apparently pursue any orders about the withdrawal of the caveat. 

37. Accordingly, in so far as it is alleged by the husband that the pool has been diminished by conduct of the wife, I do not so find.

38. One of the reasons why the husband says that he is not obliged to make any provision for a payment to the wife as a settlement is the fact that he has made significant contributions for the benefit of the wife and the children subsequent to separation.

39. The wife’s version was that she sought child support and an assessment was made of $300 per month as a consequence of which, the husband resigned his job.  She went on to say in the affidavit filed 17 November 2006 that the husband resisted paying child support, that he was significantly in arrears and had only recently commenced paying $300 per month.  However, in her earlier affidavit filed 12 December 2005, the wife conceded that she received from the husband a 1995 Toyota Corolla, an old TV set, a microwave, an old stereo and food vouchers for a value of about $200.

40. For his part, the husband said that he provided two motor cars in five years, together with registration and new tyres.  He bought a new washing machine and a refrigerator and television.  He provided food vouchers and school fees “worth $3,500”.  He added to that, the money that the wife had retained from the sale of the Queensland home of $5,000 and the money that she had apparently taken on his view when she separated in June 2002 and that all of this totalled $22,197. 

41. However in his earlier affidavit which was prepared by a solicitor and filed on 26 March 2004, whilst basically repeating the same items, he used significantly different figures as to value.  In cross-examination, it transpired that some of the goods may have been worth the figures that he used in his affidavit material but that he had in fact been able to obtain discounts through his employment.  The food vouchers were promotional vouchers that may have been worth the sort of money that he was talking about but that he did not have to pay those sums.

42. When the husband was challenged as to why he adopted the position of giving his children expensive items such as a DVD player and a television rather than paying child support, he said that he did not want to fund his wife’s lawyers.  In reality, he was unsure about what figures he had used. 

43. Whilst I find that the husband has made the contributions to which he refers and which the wife conceded she had received, I am not prepared to take those into account in any significant way in these property proceedings on the basis that as little or no child support was paid, those items were obviously for the benefit of the children rather than any form of distribution of property as between the parties.  I queried whether the parties intended to bring those items back into the pool of assets and each said that they did not as each had a household of furniture in their respective homes.  Accordingly it is of little assistance to me what value the husband put on those items because on even his version of facts, they were intended to benefit the children more so than the wife.

The approach to the division of property

1. In considering a claim under s 79 of the Act, the Court is directed to look at contribution as it is defined in the section. The Court is then directed to take into account such parts of s 75(2) as are relevant. This process is an assessment of what is an appropriate amount (if any) which would result in financial justice between the parties taking into account all of the facts relevant to the particular case.

2. The application involves four inter-related steps. First, the Court needs to 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 needs to identify and assess the contributions of the parties on the basis of the provisions in s 79(4)(a), (b) and (c) and determine the contribution-based entitlements of the parties expressed as a percentage of the net value of their property. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g) including the matters set out in s 75(2) provided that they are relevant and in that assessment, determine what adjustment (if any) should be made to the contribution-based entitlement of the parties referred to in the second step. Finally, the Court should consider the effect of each of these findings and resolve what order is just and equitable in all of the circumstances of the case[1].

   [1]Hickey and Hickey and the Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143.

3. Even though the fourth step is a consideration of what is just and equitable, it is important to note that s 79(2) of the Act says:

   The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

4. I explained to the husband that this four step process was what I was intending to follow, requesting that he point to the evidence in relation to those matters.  Having regard to all of the matters that I have referred to above about the difficulties in the conduct of this case, together with the fact that the husband has been unrepresented, I have searched through the materials to ensure that each issue has been addressed.

5. In respect of the first step, the pool of assets was agreed between the parties.  Accordingly, I find that the net assets of the parties as at the date of the hearing amounts to $38,000.

6. The husband has a number of liabilities such as credit cards, a retail store liability and child support obligations in both Australia and New Zealand which are in arrears.  I do not propose to reduce the equity in the pool by those sums on the basis that they are all post-separation liabilities of the husband personally and it would be unfair to take them into account mathematically because that would mean that the wife would be contributing towards the husband’s debts.  This is particularly so in relation to the child support arrears in both Australia and New Zealand.

7. I do however propose to take those liabilities into account when making an assessment under s 75(2) of the Act in the third step to ensure that ultimately the outcome is fair for both parties.

8. Returning to the pool, I have made a finding that there is $38,000 available for distribution.  In making that finding with the agreement of the parties, I have excluded their respective superannuation entitlements.  I am quite satisfied that each party has an accumulation fund and in respect of the wife, there is an accrued balance of $4,000 approximately and in the case of the husband $5,000.  Primarily, I am satisfied that both of these sums have been acquired subsequent to the separation of the parties.  That is not a justification for excluding them from the pool.

1. I do however take into account that both sums are not only modest but in respect of each party, there will be a considerable number of years before each is entitled to the benefit of those accruing funds.  Each fund will continue to grow but most importantly, having regard to the financial position of each party as at the moment, they are of little real value to them. 

2. It is important, having separated the superannuation entitlements from the other assets, not to simply ignore them.  The same four step process needs to be applied to those funds.  I am very conscious of what the Full Court said in C and C[2].  The Full Court there at par 61 said that in the exercise of its discretion, a court could include the superannuation interest of the parties in the list of assets and that this approach could be adopted where it was agreed to do so between the parties or where the Court felt that it was an appropriate approach.  In this case, the parties were content to separate their superannuation out from the tangible assets and for the reasons I have just articulated, I agree that it is appropriate for them not to be included.

   [2]Coghlan (2005) FLC 93-220

3. More importantly, it is difficult in applying the second step to see where either has directly contributed to the superannuation entitlements of the other.  There is a significant argument in relation to indirect contributions such as the care of children post-separation but in this case, it would make little difference to the ultimate outcome of the case because of the amount involved.  I do however propose to take into account in respect of the division of the other property during the third step of my determination that each party does have the benefit of superannuation.  Accordingly, I think it is just and equitable not to make any adjustment in respect of the superannuation entitlements of either of the parties.

Contributions

1. The parties agreed at the commencement of the hearing that up until the time of separation, their contributions were equal. 

2. The husband said that contributions otherwise have been equal since separation.

3. The wife says that she has made a major contribution to the existing assets by the acquisition of her home by her own labour and most importantly of all, without the benefit of child support from the husband.  She also points to the fact that she has made a significant contribution to the Queensland property because the husband had the use of all of the proceeds of their jointly owned home at the time of separation which he has used to re-establish himself.  On that basis, the wife says that she is entitled to 75 per cent of the current pool based on contribution alone.

4. Section 79 does not prescribe the way in which a court is to evaluate what is an appropriate order and contributions may clearly change after separation in that there is no longer a community of contribution between the parties[3].  The wife’s house has been a contribution by her to the pool of assets in a significant way without any contribution from the husband.  Because of the wife’s care of the children and the fact that the husband has had the use of their joint enterprise resources subsequent to separation, her contribution continues in respect of the house in which the husband has an interest notwithstanding that he acquired it subsequent to separation.  These contributions have to be weighed up and rather than exclude the wife’s home from the pool, I have decided to use the global approach to the pool excluding the superannuation.

   [3]          Scott and Scott [2006] FamCA 1379

5. Based on the findings I have made in respect of the sale of the home at S and in particular the passage of the $20,000 net proceeds back and forth between the husband and wife, I am satisfied that the equity in the current W home is directly traceable to the S property.  Accordingly, having regard to the income earned by the wife until its purchase and her role as a homemaker and parent both before and after separation, I am satisfied that she has made a significant contribution towards that particular property.  The same must he said to apply in respect of the motor car that each party has.  In one form or another, those motor cars have come from their respective financial and non-financial contributions. 

6. As I have already said, the investment in I Pty Ltd although now of no value, was still something to which both parties contributed directly or indirectly.  The husband contributed financially by virtue of the payment from his earnings over a period of approximately two years but during that time, he made little significant support for the children notwithstanding the findings that I have made in relation to the white goods and toys that he provided.  During that period of time, the wife fulfilled a significant role of caring for the children largely as a result of the absence of the husband.  In respect of his absence, whilst I accept that the wife moved the children, I prefer her version of facts about the reason behind that and how much time there was between visits.  Because of the significant geographical distance between the parties, the wife was left with the responsibility of caring for the physical needs of the children on a day to day basis.  I find that that is a significant contribution by her. 

7. In exercising my discretion, I have assessed their contributions so that they are reflected generally.  Having regard to the fact that the wife’s house is a significant portion of the very limited equity in this pool, there is every justification for saying that that contribution of the house and also her post-separation contributions towards the support of the children without assistance from the husband, should be recognised by saying that her contributions exceed those of the husband.  Whilst it is not a precise science, my view is that the contributions of the wife should be recognised as to 70 per cent of that pool.

Factors affecting the determination under s 75(2) of the Family Law Act

1. Section 79(4)(e) makes reference to the matters in s 75(2) in so far as they are relevant. However, they are matters that the Court must take into account as they apply to each party.

2. In this case, I am satisfied that both parties enjoy good health.

3. Each party has a similar income.  The husband earns about $35,000 per year and the wife much the same.  Her income is supplemented marginally by government benefits.  Each party appears to be in secure employment.

4. The property that each party has is modest.  As I have set out above, notwithstanding that the W home is in the name of the husband only, it is acknowledged that his new wife has an interest which the parties were content to quantity at 50 per cent.  Whilst I have no evidence about that, the joint equity of the husband and his new wife in that home puts the husband in a much stronger financial position than the wife.

5. That also becomes relevant in comparing the parties’ financial positions because the husband deposes to the fact that his new wife earns an average of $100 per week and contributes towards the household expenses.  That evidence was not challenged by the wife.  That also indicates that the husband is in a stronger financial position than the wife who has not repartnered.

6. The wife has the responsibility of the children aged nine and 12½ and I was given no evidence to suggest that her earning capacity and income were markedly affected by having to care for the children.  Clearly, the wife has done an admirable job in caring for the children having regard to the absence of the husband.

7. I have taken into account the commitments of each party that are necessary to enable that party to support themselves.  The wife lives frugally, looking at her financial statement and her income is topped up by Commonwealth benefits.  The husband however has the responsibility of paying support for the child in New Zealand and says that he has difficulty with that.  The husband’s financial position has no doubt been compounded by the fact that he has had to participate in these proceedings not only by telephone calls but also the various visits that he has made to participate.  As a result of the orders that I shall make, that problem will come to an end.  That will then leave the husband only with the responsibility of travelling annually in accordance with the orders that were made by agreement between the parties.  I am conscious however that the orders I propose to make will put the husband in a position where he will have to face a greater burden of either borrowing money to maintain the home in which he and his present wife live or alternatively, he will have to sell and rent.  Either of those two commitments add a burden to the husband which the wife through her fiscal frugality has avoided.  I have taken into account that the husband has those commitments along with the debts that he has acquired after separation such as the credit cards and the retail store account.

8. I do not have any evidence as to the nature of the support that the husband provides to his new wife but have already noted that she is in employment to some extent.  Otherwise, neither party has any responsibility for the care of any other person. 

9. I have already made reference to the superannuation entitlements of each party.  Each of those funds will grow primarily as a result of the continued employment situation of each of them.  I do not expect that either will have the opportunity to make substantial contributions to those funds in the future and as a result, the distinction between their respective superannuation entitlements is not a matter that carries much weight.

10. Section 75(2) also requires a court to take into account the standard of living that is in all the circumstances, reasonable. Both parties have moved on in their lives and each appears to have the ambition to be a home owner rather than to remain in rental situations. I appreciate that these orders may impact upon the husband’s ability to retain his home but I accept that the husband will otherwise have a reasonable standard of living on the income that he earns.

11. I am conscious of the fact that the terms of my order will make a significant difference to each party.  In the case of the wife, the amount that I propose to order the husband to pay may improve her lifestyle marginally or give her an opportunity to reduce her mortgage.  To the husband, the orders I propose to make, may make the difference between him retaining the home or selling it but in either case, he will still have equity or cash.  Having regard to the very modest amount of money that the parties have, this is not a case in which I should exercise a discretion to make a large loading determination.  In many ways, determining that loading on a percentage basis is meaningless having regard to the size of the pool of assets. 

12. I am also obliged to take into account the child support paid by the husband.  I was troubled about the fact that the husband saw it as more important to provide things directly to the wife and children rather than pay regularly an assessed amount.  I can understand that he had the ability by virtue of his employment to assist the wife whilst at the same time obtaining discounts on goods.  As I have already found, that was an obligation that the husband had to assist his children any way.  More disconcerting was the fact that the husband saw it as important to provide electronic toys for the children rather than providing money for the necessities of daily living on the basis that he thought that the money would end up in the hands of the lawyers.  I am quite satisfied however that the husband will pay child support for his children into the future based on his statement that he would do anything for them.  I do not propose to make this particular point a significant issue in the determination of any adjustment. 

13. Having regard to the fact that I have already found that the wife has contributed more than the husband and in such a modest pool, the percentage gap between the parties is a significant amount, I find that it is necessary to give a further 5 per cent adjustment to the wife to achieve a just and equitable outcome for each party.

14. I propose to make an order that the $38,000 equity in the pool, excluding the superannuation entitlements, be divided as to 75 per cent to the wife and 25 per cent to the husband.

15. Accordingly, I propose to order that the husband pay to the wife $16,000. 

16. At the conclusion of the case, I asked the husband whether or not he would need time to pay if I made any order and it was not within his contemplation that he would have to pay anything.  However, I propose to give him three months in which to reorganise his finances to pay out the wife failing which, I propose to order that the W property be sold.  I do not believe that that order adversely affects the interests of the husband’s new wife who at all times has been aware of these proceedings and more particularly, of the application of the wife.

17. Finally, having contemplated each of the matters that I have set out above, I am satisfied for the purposes of s 79(2) that it is just and equitable that an order should be made in these circumstances in the terms that I have proposed.

18. At the conclusion of the case, it was brought to my attention that on 8 September 2006, at a defaulters list hearing, an order was made:

    That the wife’s costs of this day fixed in the sum of $576, as to the payment thereof are stayed to the trial judge.

19. There was also an order made that day that the costs of the Independent Children’s Lawyer be fixed in the sum of $292 and payment stayed to the hearing.  The Independent Children’s Lawyer has not raised that order.  However, the wife has raised the order of her costs of $576.

20. The wife’s position is that the order was made because the husband had not filed his documents.  The husband seemed perplexed as to exactly what the basis was for the order.  It is to be noted that the husband participated in that hearing by telephone but was represented by a solicitor.  No application has been made to review the decision of the registrar and I do not propose to go behind her order to endeavour to determine what its basis was.  Suffice to say that the only question that I am being asked to determine is whether the stay should be lifted.

21. It is a discretionary matter.  The wife will no doubt have to pay her lawyers for what occurred on 8 September 2006 to enable this trial to be completed.  I see no reason why the order in her favour that I have made in respect of property division should be further reduced by those costs.  I have inferred that the reason the registrar granted a stay of the order was that it would have required the husband to have refinanced his property position in September only months out from a final hearing.  Now knowing the financial circumstances of each party, I can understand why the registrar was not prepared to order the payment of her costs immediately.  As the husband is now going to have to refinance his whole position, I can see no reason why he should not be responsible for those costs.  Accordingly, I propose to lift the stay of the registrar and order that the husband pay those within 90 days. 

I certify that the preceding One Hundred and Eighteen (118) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  31 January 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as PERKINS & PERKINS