Redmond and Redmond
[2006] FMCAfam 429
•21 July 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| REDMOND & REDMOND | [2006] FMCAfam 429 |
| FAMILY LAW – Property settlement – failure of husband to file affidavits – no medical evidence – pre-relationship contribution. |
| Family Law Act1975 (Cth) ss.75(2), 79 |
| Neil v Nott 121 ALR 148 Lee Steere and Lee Steere (1985) FLC 91-626 Ferraro (1993) FLC 92-335 Clauson (1995) FLC 92-595 Russell v Russell (1999) FLC 92-877 C v C (2005) FLC 93-220 Bremner and Bremner (1995) FLC 92-560 Money and Money (1994) FLC 92-485 Pierce &Pierce (1999) FLC 92-844 Lawler and Lawler (1988) FLC 91-927 |
| Applicant: | MS REDMOND |
| Respondent: | MR REDMOND |
| File Number: | BRM 9446 of 2005 |
| Judgment of: | Roberts FM |
| Hearing date: | 20 July 2006 |
| Date of Last Submission: | 20 July 2006 |
| Delivered at: | Brisbane |
| Delivered on: | 21 July 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr Davies |
| Solicitors for the Applicant: | Groom & Lavers |
| Respondent appeared on his own behalf |
ORDERS
That from the funds held by [X] Lawyers on behalf of the parties the wife Ms Redmond is to be paid $145,400 and the husband
Mr Redmond is to be paid the balance.
That the wife transfer to the husband any interest she may have in the [Mr Redmond] Family Trust.
That the wife transfer to the husband all her right, title and interest in the following:
(a)any ING shares held by them jointly or individually; and
(b)any General Property Trust shares held by them jointly or individually; and
(c)the [A] Scholarship Fund.
That within 14 days of being requested to do so the wife is to:
(a)transfer to the husband any interest in any loan or beneficiary income account and any entitlement to capital accumulation accounts in the [Mr Redmond] Family Trust; and
(b)surrender any rights or interests held by her as a potential beneficiary of the trust.
That subject to orders number 2 and 4 hereof the husband is to indemnify the wife and keep her indemnified from any liability attaching to, or in any way related to, the [Mr Redmond] Family Trust.
That subject to these orders each party is otherwise entitled to retain as his or her sole property any interest that he or she may have in any bank account, superannuation or other asset in his or her sole name and for the purposes of this order all chattels, inclusive of motor vehicles, shall be deemed to be in the sole name of the party in whose possession
IT IS NOTED that publication of this judgment under the pseudonym Redmond & Redmond is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRM 9446 of 2005
| MS REDMOND |
Applicant
And
| MR REDMOND |
Respondent
REASONS FOR JUDGMENT
In this matter the applicant is Ms Redmond (“the wife”) and the respondent is Mr Redmond (“the husband”).
Applications and affidavits
The wife filed her application for property settlement on 14 November 2005. In that document she sought only that the assets and resources of the parties be divided in such proportions as the Court may determine. However, she also sought leave to amend the application after discovery and inspection of documents. The wife has at all material times been represented by lawyers and the husband has been at all material times unrepresented.
The husband filed a response on 12 January 2006. In that document he did not give a clear indication of what he was seeking, other than to have the truth heard.
On 17 March 2006 Federal Magistrate Rimmer made orders and directions setting this matter down for trial and, inter alia, those orders and directions required the parties to file and serve by 4 July 2006 updated financial statements and affidavits setting out their evidence-in-chief. The husband was also required to provide an affidavit from his specialist in relation to health issues and his capacity to work.
The wife complied with her obligations in relation to those directions but it is a matter of record that the husband did not file anything other than a further financial statement.
At this point, I should say that the wife's counsel could have sought to have the response dismissed and have the matter heard as an undefended matter under this Court’s Rules. In my view, it is to the credit of the wife and her legal team that they chose not to do that.
The result of the husband's failure to file the required affidavits is that the husband's only evidence is that in his updated financial statement and the very limited evidence that he gave orally in the witness box.
In 1994 in Neil v Nott 121 ALR 148, the High Court said at page 150
A frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy.
In this matter it is unfortunate that the husband has not sought any legal advice and, more importantly, not filed the documentation that he was required to file.
The wife filed an amended application on 26 May 2006. In that document she sought a series of orders that essentially provided for a division of the parties’ property on the basis of 65 per cent to her and 35 per cent to the husband. However, in the case outline filed on her behalf on 18 July in accordance with Federal Magistrate Rimmer's directions, the wife reduced that claim by seeking a division of 55 per cent to her and 45 per cent to the husband.
I am still not very sure what the husband is seeking, other than that he does not think that what the wife is seeking is fair.
Background
The wife filed an extensive affidavit detailing the history of the matter and the husband's cross-examination of her did not really make much impact in relation to that long and detailed history. In the main, I must accept what the wife says about the history of this matter.
By my calculation, the wife is now 40 years old. The husband is 51 years old; he will be 52 in October.
The parties began living together in 1986 and they were married in September 1987. Their separation occurred in October 2004 and they were, according to the Court file, divorced in early 2006. The significance of those dates is that the relationship between the parties lasted for 18 years.
There are two children of the marriage; daughters aged nearly 18 and 16 years. The older child is in Year 12 at a boarding school, but otherwise lives with her father. The younger child is in Year 11 and lives with the mother. Although there is a Child Support Assessment, that is by agreement ignored by the parties because it is acknowledged that by paying expenses, in particular education expenses for the girls, the husband is in fact paying more than is required by that assessment.
The husband lives in W, New South Wales and the wife lives in T, Queensland. There is no parenting plan and there are no orders in relation to the children. However, the wife says, and I accept, that each party is able to contact the child not in his or her care at any time.
I pause at this point to say that in her affidavit the wife did what is rarely seen in affidavits in this Court. She stated that, although the husband was a hard worker (in fact, she described him as a “workaholic”) he was, and is “a very good father”. In my view, it is also to the husband’s credit that in his oral evidence he stated that the wife was also a hard worker.
At the start of the relationship the wife concedes that the husband owned a property known as “R”. She said that he inherited it. From the tenor of his cross-examination, he clearly he disagrees with that. However, in my view nothing turns on whether he inherited it or whether he purchased it. The point is that it was his property before the relationship started and I will refer to that below.
R was sold and it is clear that the parties owned and sold a number of properties and worked and lived on other people's properties during the relationship. By my calculation they lived in no less than 10 different locations. However, in relation to W, the most recent location, they lived in two different places, one described as “a dump”, the other one not so described. They also lived at “D” twice. Therefore, throughout the relationship they lived in 12 different residences. That means that on average they changed residence once every 18 months.
Some of those moves involved the husband working as a manager for others and some involved the parties working in business together. In my view, I do not need to detail everything that they did during that period. It is sufficient to say that the wife said that the husband worked very hard and, in his oral evidence, the husband said that the wife worked hard.
Relevant law
The Court’s approach to the determination of an application for the adjustment of property interests has been well established by authority. See Lee Steere and Lee Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335 and Clauson (1995) FLC 92-595. It is essentially a multi-step process: firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing; secondly, evaluating the contributions made by the parties as defined in Section 79(4)(a) to (c) of the Family Law Act 1975 (“the Act”) and thirdly, evaluating the matters contained in Section 75(2) if they are relevant.
In determining what Order the Court should make under Section 79, the Court must also be satisfied that it is just and equitable in all the circumstances to do so - see Section 79(2) and Russell v Russell (1999) FLC 92-877. This is often referred to as the fourth step.
The asset pool
The wife sets out the asset pool in Annexure “A” to her affidavit. However, that includes loan liabilities in the [Mr Redmond] Family Trust (“the trust”). As I mentioned yesterday, liabilities of that sort cancel each other out. What is a liability in the hands of a party is clearly an asset of the trust and vice versa. The bottom line is that the parties and the trust are still in the same position. In my view, the only asset of the trust that should be included is the bank balance of the trust.
The husband did not challenge the wife's list of assets and liabilities in any way as set out in her case outline. I therefore adopt that list which is to be found at page 13 of that case outline. Those assets are as follows:
a)Proceeds of sale of a property at Q $222,458
b)Commonwealth Bank account of the husband $17,000
c)National Bank account of the husband $9,951
d)Heritage Building Society account of the wife $14,300
e)Life insurance of the husband $31,347
f)Bank balance of the family trust $25,088
g)ING shares (which appear to be jointly owned) $6,982
h)General Property Trust shares $21,360
i)Husband’s superannuation with AustSafe $1,377
j)Husband’s superannuation with Sunsuper $11,687
k)Wife’s superannuation policy $212
l)Husband’s Volvo $3,500
m)Wife’s Nissan Pulsar $20,000
n)[A] Scholarship Fund $14,500
Total: $399,762
The decision of the Full Court of the Family Court last year in the matter of C v C (2005) FLC 93-220 enables superannuation to be included in the same asset pool either by agreement or where the superannuation is small in value. It is therefore appropriate to do that in this case.
Contributions
It is abundantly clear that during their 18 year relationship the parties both worked extremely hard according to their abilities. In the main they adopted the traditional roles of the husband being the breadwinner and the wife being the homemaker and parent. Both performed those roles extremely well. As I have already said, the wife describes, the husband as a workaholic. In his evidence the husband said that in relation to household cleanliness, for example, the wife was almost obsessive. Those were not his words, but that was clearly what he meant.
However, the parties were not stuck in those roles. The wife worked outside the home when she was able to do so and the husband, it was acknowledged by her, was a very good parent when he was able to be so when he was not working.
I have no hesitation in coming to the view that during the marriage the parties contributed equally.
It is the husband's pre-relationship contribution that causes the Court some difficulty. As I have already said, he was the owner of a property known as R and he had his interest in farm equipment on that property. His oral evidence was “ I was well setup, I had no debts.”
On page 12 of his financial statement he says “I had over $500,000 before the relationship, she had nothing.” It is not the “she had nothing” that causes any difficulty, because the wife says in her material “I had nil assets.” It is the $500,000 that is claimed by the husband that causes the difficulty.
The wife's position is that the husband's assets at cohabitation were worth $260,000, and not $500,000 as stated by him. They both clearly agree that he owned R and they agree that it was sold, yet neither party has produced any evidence of how much it sold for. I note that the property sold only two years after the relationship started.
In short, the state of the evidence makes it hard to assess the husband's initial contribution, particularly because the husband has not provided meaningful evidence.
It is not just the initial contribution that needs to be looked at as such. Ii is clear to me that the passage of time has some bearing on a party's initial contribution. The length of the marriage becomes a factor and what happened during the marriage becomes important.
In Bremner and Bremner (1995) FLC 92-560 the Full Court considered the different approaches taken by Lindenmayer J and Fogarty J in Money (1994) FLC 92-485. Lindenmayer J had followed earlier authorities that the strength of the contributions at the start of a marriage is eroded by the offsetting contributions of the other spouse rather than simply by the passage of time. The marriage in Bremner had lasted for 23 years. At the start, the husband had owned a block of land. The parties both worked during the marriage. The wife was the main homemaker and parent. The judge at first instance had assessed the contributions as being equal and made no adjustment for Section 75(2) factors. Baker J preferred the approach of Fogarty J who had held at page 81,054 (of Money) that “an initial substantial contribution by one party may be ‘eroded’ to a greater or lesser extent by the later contributions of the other party even though those later contributions do not necessarily at any particular point outstrip those of the other party”. The other members of the Full Court agreed.
In Pierce v Pierce (1999) FLC 92-844 the trial judge had found that the husband's greater initial contribution had been eroded over a period of cohabitation of a little more than ten years. He made no adjustment for Section 75(2) factors and divided the assets on the basis 55% to the husband and 45% to the wife because at the start the husband had assets worth $226,000, whereas the wife had assets worth $11,500. The Full Court allowed the husband's appeal. The husband received 70% of the assets on the basis of his greater initial contributions and a further 5% for sec 75(2) factors. The Full Court said (at p 85,881):
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home ...
I was also referred by counsel for the wife to the decision in Lawler and Lawler (1988) FLC 91-927, which is a decision in a similar vein.
Because of a lack of evidence in relation to the R property I am left with a difficulty in relation to the weight that I need to attach to that contribution. I note again, however, that the relationship in this matter was for 18 years, which is of course almost twice that of the period of cohabitation in Pierce.
On the wife's own view she says that the R property was worth $260,000. In round figures, the net value of the property referred to above is very nearly $400,000 now. Ignoring inflation and the parties' contributions over the 18 years, $260,000 equates to approximately 65 per cent of the current value of the assets.
Notwithstanding the effluxion of time, that very significant contribution on behalf of the husband cannot simply be ignored just because 18 years have passed. It is quite clear from the wife's own material that the husband's contribution of the R property was the capital injection that enabled the parties to buy and sell subsequent properties.
As I have said, the assessment of the value of that initial contribution, as affected by time and the subsequent contributions of both of the parties, is extremely difficult because of the dearth of evidence. However, I conclude that the contributions of the parties overall should be assessed as being 60 per cent by the husband and 40 per cent by the wife.
Section 75(2) factors
The husband is aged 51 and the wife is aged 40.
The wife is in good health. The husband has produced a letter from his doctor, which was admitted by consent. The doctor says that the husband “has two serious medical conditions.”
The letter says:
This is a condition where he has fragile surface capillaries on his skin and mucous membranes. In the past he has recurrent episodes of nose bleeds related to this condition. It is currently, however, under reasonable control.
That does not seem to be a particularly serious condition, but the report goes on:
He has a congenital bicuspid aortic valve which is associated with severe leg/aortic regurgitation. He is being followed on a regular basis and in the future may require aortic valve replacement surgery. It is recommended that he avoid heavy lifting and vigorous exertion, therefore suitable only for light duties.
The evidence would appear to suggest that the husband actually ignores his medical advice and is probably working physically a lot harder than he should.
The husband is employed and earns $800 per week. However, I infer from the evidence that he is also provided with a home. He did not challenge the wife's evidence in relation to that in any way. At W the parties lived in two properties - one being a disused school which was referred to generally as "the dump" and I presume the second was more accommodating as a home.
The wife works, she earns approximately $210 per week as a casual sales assistant. The wife is trying to better her lot by further education that she thinks will improve her employment prospects and clearly that is to her credit.
Each party has the care and responsibility, or the main care and responsibility for one of the children. They are not young children, but they are both still at school and, as I have already said, it appears the husband is contributing more than the wife financially in relation to the children. However, on their incomes he clearly has a better capacity to do so.
There is no evidence that either party has repartnered.
Overall, the factors under section 75(2) of the Act favour the wife slightly. The husband earns more, but he probably should not be working as hard as he does. The wife earns less, but she is educating herself with a view to earning more in the future. Each party has a child in the household, but as I have said they are not young children and in both cases I think one could predict that it will not be very long very those children spread their wings and leave the various nests.
In my view, taking all of those factors into account there should be an adjustment in the wife's favour of five per cent as a result of those s.75(2) factors.
Conclusions and orders
As I have already said, there should be a 10 per cent adjustment in favour of the husband on contributions, but when taken in conjunction with the 75(2) adjustment that brings that back to a five per cent adjustment, being 55 per cent in favour of the husband and 45 per cent in favour of the wife.
The total net assets have a value of $399,762. For the wife to receive 45 per cent she should receive a total in round figures of $179,900.
She has the Heritage Building Society account $14,300, her superannuation $212 and the Nissan Pulsar $20,000, so she already has a total of $34,512 towards that $179,900. It therefore follows that she should receive $145,388 from the asset pool to bring that up to an entitlement of 45 per cent. In my view, that figure should be rounded to $145,400. Clearly, there is that much available from the proceeds of sale of the Q property which are currently held in trust, and in those circumstances, the orders that I pronounce will take account of that.
The effect of the orders is that the wife will receive a cash payment of $145,400, her Heritage Building Society account, her superannuation and her car. The total of that is $179,912.
The husband receives the balance cash of $77,058, his Commonwealth Bank account, his National Australia Bank account, his life insurance, the bank balance of the trust, the ING and General Property Trust shares, his superannuation at two superannuation funds, his motor vehicle and the scholarship fund, the total of which is $219,850. That is 55 per cent of the total of $399,762.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Roberts FM
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