Rajan and Rajan

[2018] FCCA 780

FEDERAL CIRCUIT COURT OF AUSTRALIA

RAJAN & RAJAN [2018] FCCA 780

Catchwords:
FAMILY LAW – Property dispute proceeding by consent to determination on submissions alone – parties separating in 2008 but property matter only before the court in 2018 – husband seeking to proceed on 2008 valuation of property – wife seeking valuation at trial – wife’s methodology clearly appropriate – husband making greater contribution, by far, to the only significant asset – wife’s future needs greater – 60/40 division in favour of husband.

Legislation:

Family Law Act 1975

Stanford v Stanford [2012] HCA 52
Woodland v Todd (2005) FLC 93-217

Applicant: MS RAJAN

Respondent: MR RAJAN

File Number: DGC 2065 of 2015

Judgment of: Judge Burchardt

Hearing date: 19 February 2018

Date of Last Submission: 19 February 2018

Delivered at: Dandenong

Delivered on: 12 April 2018

REPRESENTATION

Counsel for the Applicant: Mr Scriva

Solicitors for the Applicant: Pentana Stanton Lawyers

The Respondent: In person

ORDERS

1. The husband pay the wife $96,000 (“the payment”) within 60 days.

2. That in the event that the whole of the payment has not been made by the date, the real property be forthwith sold together out of Court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:

   (a)Firstly to pay all costs, commissions and expenses of the sale;

   (b)Secondly to discharge the mortgage and any other encumbrance affecting the real property;

   (c)Thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 7.5 per centum per annum adjusted monthly from the date to the wife. 

   (d)Fourthly the balance to the husband.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 2065 of 2015

MS RAJAN

Applicant

And

MR RAJAN

Respondent

REASONS FOR JUDGMENT

1. This is a property dispute in which, in many ways, the evidence is incomplete and unsatisfactory.  It is also, however, a dispute within a relatively confined field.  Although the wife’s initiating application sought both a division of property and superannuation, in the course of submissions counsel for the applicant wife (as I shall refer to her even though they are divorced) all but conceded that an adjustment of superannuation interests was inappropriate.

2. In the affidavit accompanying her application the wife deposed that she was born on (omitted) 1974 in India.  The respondent was born on (omitted) 1970 in India.  The parties met in 1995 and married on (omitted) 1995.

3. There are three children of the marriage, namely, [X], born (omitted) 1997, [Y], born (omitted) 1997 and [Z], born (omitted) 1999. 

4. The wife deposed that the parties separated on 7 June 2008 and divorced on 18 August 2015.

5. The wife deposed that the asset pool of the parties was constituted by the former matrimonial home at Property A, at a value believed to be $500,000 and a home and farm in India, in (omitted), worth approximately $20,000.  The wife owns a Mitsubishi (omitted) valued at approximately $4,500 and the wife deposed that the husband owned two cars valued at approximately $36,000.  The wife’s superannuation then amounted to $6,389.

6. The wife deposed that she had no information as to the mortgage over the matrimonial home or the value of the farm in India.

7. The affidavit deposed relevantly that there was quite significant family violence (counsel expressly abandoned any Kennon argument at the commencement of the trial).  She also deposed that the parties, both of whom had worked in India, moved to Australia in (omitted) 2007.  After further alleged domestic violence, the marriage ended in 2008.

8. The wife confirmed that the husband continued to pay the mortgage and bills related to the home and paid Child Support for [Z].  Attempts at reconciliation had failed and the husband remained in the home while the wife moved out.

9. The wife deposed that in 2012 she gave the husband $5,000 following a fire at the house.

10. The wife deposed that she is currently unemployed and on Centrelink Newstart Allowance.

11. The wife’s Financial Statement was consistent with her affidavit.

12. The husband’s response sought that the wife’s application be struck out, that she withdraw her caveat lodged against the matrimonial home and pay costs.  Interim orders were sought that the wife pay the mortgage and related expenses or, alternatively, vacate forthwith.

13. The husband’s affidavit filed 1 May 2017 confirmed the marriage and the dates of birth of the children.  He deposed that he had left to come to Australia in 2006 and the wife joined him in (omitted) 2007.  He noted that the matrimonial home had been bought for $240,125 in October 2007.  The parties were only together for six months before separation.  The husband deposed that at the time of separation the home was worth an estimated $250,000 with a $230,000 mortgage and he estimated his share of the property in India at $1,000, together with cars and superannuation.  He deposed that he had bought the matrimonial home by saving a deposit of $15,000 and borrowed the balance on a mortgage.

14. The husband deposed that two children, [Y] and [Z], had come to live with him in 2014, but the previous year he had obtained work in New South Wales.  The wife then moved into the home to look after the three children and was continuing to do so.  He deposed that he had paid the rates, utilities and mortgage repayments since separation and further sums on renovations.  He said there had been a fire in 2010, following which the wife lent him $5,000, which he had repaid.  He estimated the value of the matrimonial home at $460,000.  The other items are minor and I shall come to them.

15. Once again, the husband’s Financial Statement was consistent with his affidavit.  I note that his superannuation was valued at $38,000.  His car was offset by a loan of commensurate value with the vehicle. 

16. The husband filed a further affidavit on 15 May 2017.  It is, essentially, a repeat of his first affidavit. 

17. In his Financial Statement filed 15 May 2017, the husband gave his weekly wage at $1,500.  He valued the property at $460,000 and assessed the mortgage at $230,000.

18. It is clear that both the property and the mortgage have always been in the husband’s name alone.

19. The wife’s final affidavit was filed on 14 September 2017.  The affidavit, essentially, reprises the earlier materials.  There are assertions about nondisclosure which were not pursued at trial.

20. The husband’s outline of case document, filed by leave of the Court, raises issues such as the wife’s jewellery and the like, which have simply not been pursued.  I note that he asserts (the document is not on affidavit) that his earning is about $50,000 to $55,000 annually.

21. When the proceeding commenced, counsel submitted that it might be a case appropriate to proceed by way of submissions alone.  I explained to the respondent what this might mean and he expressed his agreement that the case should proceed in this way, with the Court doing the best it could in the circumstances.

22. Counsel noted that the husband was seeking that the Court uses the date of separation for defining the assets of the relationship.  Counsel noted that the husband’s case outline posited an agreed value for the matrimonial home of $470,000, with a mortgage of $230,000.  It had been reduced to $190,000 but was now up again.  Counsel submitted that the increase should be shared.  Counsel noted that the wife had advanced $5,000 when the house fire took place, but that the husband said it was repaid.  The husband had paid the mortgage, rates and the like and the home had been rented out for an unascertained period.  The wife was not paid anything for managing the property (where, on her own material, she had lived only from 2016 to 2018).  Counsel submitted that the $220,000 equity should be divided equally.  The wife is on Centrelink and the husband has his own business as a (occupation omitted).  The wife lives in the home and may be eligible for Newstart.

23. As earlier indicated, counsel conceded there was no evidence of how much superannuation the parties had during the time that they were together.  Given the very brief time in Australia before separation, counsel conceded that the evidence could not support a superannuation adjustment.

24. The husband has submitted that the wife was a (omitted) student and had qualifications in (omitted) and could work.  She stopped work since the case started.  He said he did not know where the wife gets money from.  The children are living on their own.  He went to live in (omitted) about two years ago.  The children had been substantially with him for some four years.  The mother went overseas.  He said 99 per cent was his contributions to everything.  He conceded that all three children lived with the wife in the matrimonial home.

25. When the Court asked Mr Rajan what he was suggesting the wife should receive, if anything, he said that she should receive something in the order of $45,000 to $50,000.

26. As noted in the High Court’s decision in Stanford, it is clear the Court’s first task is to identify the legal and equitable interests of the parties and decide if there should be a property adjustment.  Here, in my opinion, the pool is easily described.  It is the matrimonial home, together with the mortgage.  The parties’ cars are not subject of valuation and the husband’s is the subject of a loan likely to be at least its full value.  There is no evidence to support the husband’s assertion about the wife’s jewellery, one way or the other, and the bank accounts and the like must lie where they stand.  They are clearly post-separation.

27. Nonetheless, it would seem that the property was clearly purchased during the relationship (the wife’s affidavit says shortly after she arrived and the husband’s is equivocal).  Both parties, in summary, do seek that there be a property adjustment.  They disagree about its extent.  It is plainly just and equitable to make a property division even though the parties have been separated for almost a decade.

28. The first issue which then follows is what should be the date of valuation.  The wife says at trial and the husband says at separation.

29. The matter was considered by the Full Court of the Family Court in Woodland v Todd (2005) FLC 93-217 at [38], where the Full Court, dealing with circumstances where there had been an agreement entered into, stated:

    “Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made.”

30. The Full Court went on to say at [39]-[40]:

    “39.  In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment. A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time. However and perhaps more significantly, it would generally be necessary for the court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.

    40.  In the present case therefore it may well have been necessary for the trial judge to consider these various matters existing at the time of the agreement. However it was also necessary for him to go further and to consider the composition and value of the assets and the various matters referred to in
    s 79(4) as they existed at the date of the hearing.”

31. It is clear from this passage, and in my view it is also clear from the terms of the Act itself, that in considering the claims of the parties, the Court should take the values of the pool as at the time of hearing not at the time of separation.  This is all the more the case because unlike the position in Woodland, there was no prior agreement at the time of separation.  Rather, the parties simply continued on.  The fact is that the children have lived almost all the time with their mother since separation and to ignore this reality would plainly be unjust and inequitable.  Accordingly, the pool available for division is the matrimonial home worth $470,000 less the mortgage of $230,000, leaving a total of $240,000.

32. I note that counsel for the wife properly, in my view, conceded that the total of the mortgage should be taken into consideration.  There is simply no evidence to support the assertion that it was down to $119,000 and then increased nor, if this was so, what the moneys were applied to.  The reality is that the mortgage is what it is.  Counsel’s concession in this regard was a sensible one.

33. So far as contribution is concerned, it should be remembered that the wife’s counsel expressly abandoned any Kennon argument.  He submitted that contributions should be assessed at 50/50.  In my view, this is not accurate.  It was the husband who obtained the deposit that enabled the property to be bought.  Moreover, he has paid the mortgage and all the associated utilities, rates and the like from separation in 2008 until 2018.  The wife has not contributed anything whatsoever to that circumstance.  It is only the husband’s payment of the mortgage, which funnily enough has ended up pretty much where it began, which has enabled the parties to still own the property which has appreciated very substantially through market forces.  Against this, the wife has brought up the children largely on her own.  This is something to be evaluated but it needs to be remembered that the circumstances of the case are curious.  The parties were scarcely together for any time at all from the time of the purchase of the property until separation.

34. The evidence of the parties’ contributions for the not insignificant time they were in India, from 1995 until 2007, is scarcely satisfactory.  Both parents seem to have contributed as best they were able and I have no doubt that the wife had the primary child caring role.  I should interpolate and say that the husband’s property in India is not the subject of any valuation and it is, to the extent that it is anything, a trivial resource in his favour.  The wife’s extravagant assertions about the husband’s Indian properties (and its value) are not supported by any admissible evidence.

35. While taken overall the parties’ contributions have had some sort of measure of equality, when one looks, as I think in the particular circumstances of the case it is just and equitable to do, at the only asset of any moment that the parties have, it is plain that the husband has provided a far greater share than the wife.  In my opinion, his payment of the mortgage, rates and the like must be assessed as producing a total in his favour of 70 per cent as to the wife’s 30 per cent.

36. That brings us to the consideration of future needs.  The husband’s suggestions that the wife could easily work are not borne out by experience.  Her future work opportunities are uncertain.

37. Whether the husband is presently earning $55,000 a year or $78,000 as his Financial Statement actually attests may be open to question, but on any view his earning capacity is far greater than that of the wife.  The wife continues to have the care of the three children.  In my opinion, there should be a 10 per cent loading in the wife’s favour in this regard.

38. Taking a step back and looking at the matter overall, in my opinion, a division of the value of the matrimonial home of some 60 per cent in favour of the husband and 40 per cent in favour of the wife is just and equitable.

39. It must be certain that the wife cannot buy the property out.  She is only in receipt of statutory benefits.  I do not know if the husband will be able to find the $96,000 that he will need to find to pay the wife out.  I will give him 60 days to pay the wife that sum, failing which the property must be sold and the net proceeds of sale must be divided in the proportions of 60 to 40 as I have indicated.

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

Date: 12 April 2018