Pirozzo and Pirozzo
[2011] FMCAfam 43
•20 January 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PIROZZO & PIROZZO | [2011] FMCAfam 43 |
| FAMILY LAW – Property – contributions by parties’ parents – child support payments and periods of care of children small – significant percentage adjustment to wife. |
| Family Law Act 1975 Child Support (Assessment) Act 1989 |
| Applicant: | MR PIROZZO |
| Respondent: | MS PIROZZO |
| File Number: | MLC 10196 of 2009 |
| Judgment of: | Hartnett FM |
| Hearing date: | 8 and 9 November 2010 |
| Delivered at: | Melbourne |
| Delivered on: | 20 January 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Curtain |
| Solicitors for the Applicant: | Leanne Cain & Associates |
| Counsel for the Respondent: | Ms Smallwood |
| Solicitors for the Respondent: | Pearsons Barristers & Solicitors Pty Ltd |
ORDERS
That the application for Orders 1 and 2 as set out in the amended response of the wife filed 17 August 2010 is dismissed.
That within 60 days hereof the husband do all such acts and things and sign all such documents as may be required to transfer to the wife at the expense of the wife all of his right title and interest in the real property known as and situate at Property P in the State of Victoria (‘the real property’) and thereafter the wife be responsible for and indemnify the husband with respect to the mortgage secured against the property. The wife is to refinance the mortgage into her sole name within 6 months of the transfer being signed by the husband.
That contemporaneously with the transfer referred to in Order 2 herein the wife pay to the husband the sum of $129,325.
That otherwise each of the parties retain for their sole benefit and ownership those items of real property and chattels currently in their respective possession and after giving effect to the orders made the
9 November 2010.
Liberty to apply with respect to the enforcement of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Pirozzo & Pirozzo is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 10196 of 2009
| MR PIROZZO |
Applicant
And
| MS PIROZZO |
Respondent
REASONS FOR JUDGMENT
The husband sought property orders in an application filed by him on 17 November 2009. Save that he sought a sale of the former matrimonial home at Property P he did not specify precisely what orders he sought. At trial he sought a division of the asset pool excluding superannuation of 60 per cent to the wife and 40 per cent to him. He sought an equality of division of the superannuation benefits of the parties.
The husband relied upon an affidavit sworn by him on 28 October 2010 and a financial statement sworn on 28 October 2010. He also relied upon an affidavit sworn by his father on 5 November 2010 and one sworn by his mother on 30 October 2010. His parents were not cross-examined. Their evidence went to financial support provided by them to the parties. The parties resided with them for a few months following their return from their honeymoon before the parties moved into a rental property owned by the husband’s parents. The rental paid by the parties was significantly below commercial rental rates until it became (on the evidence of the husband’s father) non-existent with the parties paying only the council rates, house insurance and half of the water rates. This continued until the transfer of the real property by the husband’s parents to the parties in 2004. The evidence of the husband and his mother was contrary in that they claimed a rental amount was always paid by the parties. I have insufficient evidence before me to make a finding as to this differing evidence. In the period before the transfer the husband’s parents had a vegetable garden on the property. The husband and wife were told by the husband’s parents that the property would become theirs and they carried out renovations to it before the transfer was effected. In this they were assisted by the husband’s parents gifting them a sum of approximately $19,000. At the time of the transfer from the husband’s parents to the parties in 2004 the property was valued in the sum of $280,000. The husband’s mother chose to forego her one half share payment of $140,000 converting it into an early inheritance gift to her son. Her evidence was that she wished to help the parties and their young family financially, and she acknowledged her son had spent a lot of time in fixing the house.
The wife relied upon her affidavit sworn 3 November 2010 and financial statement sworn the same date. The wife sought orders which reflected a 75 per cent adjustment of the total asset pool (including superannuation) to her. Her counsel argued that in the exercise of the Court’s discretion an apportionment of 80 per cent of the total asset pool to the wife would be also a just and equitable outcome.
Statements of fact in these reasons are to be taken as findings of fact on the balance of probabilities.
The husband was born [in] 1968 and he is now aged 42 years. He was employed throughout the marriage and following separation as a [occupation omitted] earning in November 2009, the sum of $1,200 per week gross. Consequent upon disciplinary action being taken against him for theft, his employer [A] terminated his employment and paid him his entitlements of approximately $14,635 net which included long service leave entitlements. He remained unemployed for a time before commencing work with [M] as a [occupation omitted].
The wife was born [in] 1968 and she is also 42 years of age. She is employed on contract as a [occupation omitted] at [S] and receives a salary of $1,264 gross per week. She is hopeful her contract will be renewed but there is uncertainty associated with that. In addition she receives income of $537 a month rental from her interest in a real property at Property C – as declared in her income taxation return albeit the monies are not received by her but put back into the costs associated with the property – and Commonwealth family payment benefits. Each of the husband and wife are in good health.
The parties commenced to live together on the day of their marriage, the [date omitted] 1993. They have three children who since separation have resided with their mother. They are: [X] born [in] 1998, [Y] born [in] 2000 and [Z] born [in] 2002. The children are aged 12, 10 and 8 respectively. The parties separated in late 2008 or early 2009 under the one roof and physically separated when the husband left the former matrimonial home in February 2009. Their cohabitation period was one of approximately 15 years. Following separation the husband has commenced to reside with Ms G whom was a co-worker at [A]. She is a similar age and now working casually. The husband has supported her in his contribution toward their household expenditure. Together they provide accommodation to Ms G’s 23 year old daughter who although employed makes no contribution to their household. The husband spends time with the children of the marriage each alternate weekend from Friday to Sunday. He has no school holiday time with the children. They remain throughout the year predominantly in their mother’s care. The husband has failed to pay child support on a regular basis and has failed to make voluntary payments of such child support.
The parties entered into consent orders on 9 November 2010 (and being during the course of the trial) which effected a division of their chattels and which provided for a superannuation split of the husband’s interest in the [A] Superannuation Scheme and a payment to the wife. The Trustee of the fund was afforded procedural fairness and the parties agreed on an equal division of the husband and wife’s current entitlements. The wife however argued at the conclusion of the proceedings that she should be entitled to a larger than equal share of the superannuation entitlements with such additional share being delivered from the asset pool available for distribution between the parties now. I do not accede to that application. The parties’ superannuation is a total sum of $124,000. To award less than 50% to either party in the circumstances of this case would not be just and equitable. Each is many years off retirement and an ability to access the funds although I note the husband’s earlier withdrawal to which I shall return. Each had made a contribution to their respective funds either directly or indirectly during the course of the marriage. There are sufficient other assets to enable just and equitable orders to be made now as between the parties without upsetting the fairness and equity of equally dividing their superannuation entitlements, a matter in any event which the husband thought the wife had agreed to in the running of the proceedings.
The asset pool is as follows:
Assets
Value
1
The former matrimonial home situate at Property P (as per the sworn valuation of Mr M of 4 November 2010)
$755,000
Less mortgage outstanding $415,000
Equity $340,000
2
The wife’s one third interest in Property C
$168,165
3
The wife’s half interest in Property B
$210,000
4
The wife’s motor vehicle 1999 VW Golf
$5,000 (or $7,000) (midpoint $6,000)
No valuation provided
5
The husband’s motor vehicle
$15,000
6
The husband’s motor bike
$10,000
Total
$749,165
7
Less: Debt
Credit Card
Approximately $4,800
Total (excluding superannuation)
$744,365
8
Superannuation
Husband’s $120,000
Wife’s $4,000
The wife in her amended response filed 17 August 2010 sought departure orders and a lump sum payment pursuant to the Child Support (Assessment) Act 1989. In the circumstances of this case and the absence of administrative review as I indicated to the parties with reasons given at the time, I will not consider this application.
At the commencement of cohabitation neither party had any assets of significance. Both worked full time until the wife ceased her employment as a [omitted] shortly before the birth of the parties’ first child. During the child rearing years that followed the wife worked part time in [omitted] until she again resumed [occupation omitted] in January 2009 following the parties’ separation. The husband worked for [A] throughout the marriage and after separation until he was served with a termination notice on 5 March 2010. Both parties made direct financial contribution to the parties’ assets and the household in the form of their earnings and both contributed to the welfare of the family and care of their children.
The husband received a net payment on 16 April 2010 of $10,830.22. This comprised annual leave and long service leave less an amount overpaid in error. In the following month he withdrew the non-preserved portion of $8,127.20 from his entitlements with the [A] Superannuation Scheme. He received a net payment of $6,561.20. The total sum received by him was $17,391.42.
The husband was unemployed from March 2010 until August 2010 (about 5 months). He then obtained casual work as a [occupation omitted] with [M] where he remains. He is optimistic about his ability to be employed on an ongoing basis. His current receipt of income is $800 per week net being in excess of that claimed in his financial statement.
As a consequence of losing his job the husband’s child support payments were reduced and between 5 February 2010 and 31 October 2010 he was assessed to pay an annual amount of $5,055 at the rate of $245.46 per fortnight. Prior to this change of assessment the husband had fallen into arrears of payments during the period he was employed and thus the Child Support Agency obtained a payment of $2,151.81 out of the husband’s taxation refund for the year ended 30 June 2010. The balance of that refund of $2,828.58 was retained by the husband. This is in addition to the sums received by him as referred to in paragraph 12 herein. Thus the funds received by him which related to the period of the marriage were $20,220. The wife seeks these funds be added back to the pool or accounted for in some other way.
The husband has no current obligation to pay child support and despite saying at trial he would pay $100 each week he had not made any payments nor entered into a child support agreement. In July 2011 he will recommence making payments as assessed.
Following the parties purchase of the former matrimonial home they refinanced the Commonwealth Bank of Australia (CBA) mortgage taken out to purchase it from the husband’s parents (and in the sum of $140,000) to a CBA Viridian line of credit with a limit of $460,000. This enabled them to renovate the property including an expansion of the living areas and the conversion of a storage room into a bedroom. The husband undertook much of the physical labour working at night, on weekends and holidays whilst the wife would care for the children. Each made a contribution and I do not find one outweighed the other. The husband alleged that the work he carried out significantly improved the market value of the home. There is no expert evidence produced by him supportive of that assertion. The wife also gave evidence that improvements to the property were carried out by the parties during the time they rented the premises. This evidence is corroborated by the husband’s mother. What value that may have added to the property or what was the cost of such works is unknown.
The husband continued to meet the mortgage repayments on the home, the rates and home insurance from January 2009 to June 2009 inclusive when he was assessed to commence child support payments. Thereafter neither party has made any repayments of the mortgage. The loan balance increased from $384,980 in October 2009 to $412,394 in October 2010. Although the husband’s evidence was that he did not redraw any funds during this period he failed to mention that he did so during an earlier period such that the monies paid into the mortgage by him were vastly inferior to those monies he withdrew. At separation the mortgage was approximately $300,000. By October 2009 it was $384,000. The husband withdrew for his own purposes the total sum of $64,000 causing the wife to request of the bank a cessation of either party’s capacity to withdraw funds. The husband conceded in evidence that he drew down from the Veridian line of credit the following sums:
a)On 5 March 2009: $456;
b)On 11 March 2009: $4,305.40;
c)On 30 March 2009: $218.53;
d)On 8 April 2009: $484.85 (but for son’s bike); and
e)On 15 April 2009: $28,566.60
_________
TOTAL:$34,031.38
I find in addition he drew down the following further sums which he could not recall:
i)On 26 March 2009: $2,785;
ii)On 14 April 2009: $1,004; and
iii)On 16 April 2009: the sum of $3,412.71
________
TOTAL: $7,201.71
The husband denied that he drew down the following sums:
a)On 21 April 2009: the sum of $9,000;
b)On 22 April 2009: further sums of $1,900 and $2,400;
c)On 5 May 2009: the sum of $9,000.
_________
TOTAL:$22,300.00
I do not accept the husband’s evidence. It was completely implausible. His suggestion that a third party unknown could have withdrawn funds from the parties’ account was without any substance. The wife did not access these funds and the Court accepts her assertion that it was the husband who gained the benefit of these further funds. Thus, the total funds accessed by the husband were $63,533.09.
Whilst the husband was employed he deposited approximately $15,000 into the Veridian line of credit – an amount of approximately $3,011.52 per month in repayment of the mortgage. He admits to at the same time withdrawing approximately $34,000. The Court finds he withdrew a significantly greater sum being $63,533.09.
As the wife’s parents had gifted her a one-third interest in the investment property at Property C in 2000 they likewise made a further gift of real property being a half interest in the property at Property B. This transfer from them to her was effected in August 2003. This became the parties’ family holiday home. I accept the wife’s evidence that the husband made no contribution to this real property. The parties carried out no improvements to the property and nor did they pay any bills associated with the property. They had enjoyment of it at no cost nor obligation to them. They made no contribution direct or indirect to its acquisition maintenance or conservation nor improved it.
The husband argued the parties’ contributions were equal – that he was gifted one half of the former matrimonial home and that one half of its current value is about $370,000 now. Further that his income enabled the preservation of the wife’s interest in the real properties gifted to her. This argument is flawed. The current value of the former matrimonial home has been achieved by further borrowings of the parties and improvements carried out to the property both before and following the transfer. The husband’s income was not relied upon to obtain nor preserve the wife’s interest in the real properties gifted to her.
Since separation the husband has not had the children in his care for school holiday periods. He initially indicated in evidence that was difficult with his work roster but of course he was unemployed for about five months this year and then casually employed so he has had ample opportunity to take the children and care for and provide for them if he chose.
The wife’s case is that there should be a loading of 15 per cent to her for the section 75(2) matters and a further 10 per cent adjustment for contribution. The husband responds that the wife should receive a loading of 10 per cent for the section 75(2) matters such that she receive an apportionment of 60 per cent of the non-superannuation assets and 50 per cent of the total superannuation of the parties.
The Court accepts that the wife should receive 75 per cent of the non-superannuation assets as proposed by the wife. That is the amount of $558,273.75. I propose to accede to the wife’s application to transfer the husband’s interest in the former matrimonial home to her. She will then have total assets of $724,165 less the credit card debt of $4,800 making an amount of $719,365. She thus must make a payment to the husband of $161,091.25. The sum received by the husband following the termination of his employment and departure from the former matrimonial home of approximately $20,000 I propose that he retain as same went in part to his necessary support at the time. However his withdrawal of the sum of $63,533.09 without the wife’s knowledge or consent requires a further adjustment though I do not propose it as a 75-25 per cent division but rather an equal division. Justice and equity require reimbursement in some percentage to the wife who in paying out the husband will be left supporting a mortgage in excess of $500,000 on a [occupation omitted]’s salary. She will no doubt need to consider a sale or transfer of her other real property interests thus leaving her with no other financial resources. Thus the wife should pay the husband an amount of $161,091.25 less $31,766.55 being $129,325.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of FM Hartnett.
Associate:
Date: 20 January 2011
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