RICHARDS & HOVEY
[2017] FamCA 1058
•19 December 2017
FAMILY COURT OF AUSTRALIA
| RICHARDS & HOVEY | [2017] FamCA 1058 |
| FAMILY LAW – PROPERTY – just and equitable – where the wife seeks to receive 62.5 per cent of the property pool – where the husband seeks to receive 67 per cent of the property pool –where the husband’s initial contributions were greater than those of the wife – adjustment of 52.5/47.5 in favour of the husband in relation to contributions – where the wife has the full time care of the child of the marriage – pursuant to s 75(2) of the Family Law Act 1975 (Cth) adjustment of 10 per cent in favour of the wife – wife to receive 57.5 per cent of the property pool – where both parties seek to retain the Suburb C property – order that the wife retain the Suburb C property –payment to the wife of $40,000 made pursuant to previous orders characterised as part-property settlement. |
| Family Law Act 1975 (Cth) ss 79, 75(2) Family Law Rules 2004 (Cth) Evidence Act 1995 (Cth) s 140 |
| Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 Watson & Ling [2013] FamCA 57; (2013) FLC 93-527 | ||
| APPLICANT: | Ms Richards | |
| RESPONDENT: | Mr Hovey |
| INDEPENDENT CHILDREN’S LAWYER: | Victoria Legal Aid |
| FILE NUMBER: | MLC | 3227 | of | 2015 |
| DATE DELIVERED: | 19 December 2017 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Johns J |
| HEARING DATE: | 24, 25, 26 October 2016, 24, 27 April 2017 & 22, 23, 24, & 25 May 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Stoikovska SC |
| SOLICITOR FOR THE APPLICANT: | Westminster Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Hoult |
| SOLICITOR FOR THE RESPONDENT: | Berry Family Law |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Agresta |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Victoria Legal Aid |
Orders
1.That within 60 days (“the date”) the wife pay or cause to be paid to the husband the sum of $65,967 (“the payment”).
2.That contemporaneously with the payment:-
(a)The husband do all such acts and sign all such documents as may be required to transfer to the wife at the expense of the wife all of his interest in the real property known as B Street, Suburb C, being the whole of the land more particularly described in the Certificate of Title Volume … Folio … (“the Suburb C property”);
(b)That wife indemnify the husband against any liability pursuant to the mortgage registered No. … to the Commonwealth Bank of Australia (“the Suburb C mortgage”) and all rates, taxes and outgoings of or with respect to the Suburb C property of whatsoever nature and kind; and
(c)The husband and the wife do all such acts and things necessary to enable the wife to refinance the Suburb C mortgage into her sole name.
3.That in the event that the whole of the payment has not been made by the date then the husband and the wife do all such acts and things and sign all such documents as may be required to effect a sale of the Suburb C property and the proceeds of the sale be applied:-
(a)Firstly, all costs, commissions and expenses of the sale:
(b)Secondly, to discharge the mortgage thereon and any other encumbrance affecting the Suburb C property;
(c)Thirdly, to pay to the husband so much of the payment as is then outstanding together with interest thereon at the rate prescribed by the Family Law Rules 2004;
(d)Fourthly, the balance then remaining to the wife.
4.That there be liberty to apply with respect to the terms and conditions of the sale.
5.That the wife retain for her own use and benefit absolutely:-
(a) The Suburb C property;
(b) The proceeds of sale of the D Town property applied towards her legal expenses (estimated at $17,000) and invested (approximately $13,500);
(c) Part-property payment in the sum of $40,000 paid to the wife pursuant to orders dated 20 November 2015;
(d) The motor vehicle; and
(e) Her savings accounts.
6.That the husband retain for his own use and benefit absolutely:
(a)The E Town property;
(b)The Colonial First State investments valued at approximately $187,000;
(c)The AMP shares;
(d)The F Fund account;
(e)The part-property payment in the sum of $40,000 made pursuant to orders dated 20 November 2015;
(f)Amounts re-drawn by the husband from the home loan in the sum of approximately $29,000;
(g)His savings accounts.
7.That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:-
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)That each party forego any claims that they may have to any superannuation or employment benefits belonging to or earned by the other;
(c)Insurance policies remain the sole property of the beneficiary named therein;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)Any joint tenancy of the parties in any real or personal property is hereby expressly severed.
8.That all extant applications be otherwise dismissed.
9.That documents produced under subpoena be returned.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Richards & Hovey has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 3227 of 2015
| Ms Richards |
Applicant
And
| Mr Hovey |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant wife, Ms Richards and the respondent husband, Mr Hovey seek orders for the adjustment of property interests pursuant to Part VIII of the Family Law Act1975 (Cth) (“the Act”).
Originally, the proceedings also concerned parenting arrangements for the parties’ child, G, aged eight years. The final hearing with respect to both parenting and property matters was conducted over nine days and the issues with respect to G, which included allegations of sexual abuse by the husband, dominated much of that hearing. The parenting dispute was resolved on the last day of hearing and I made final orders by consent with respect to those aspects of the case prior to hearing closing addresses.
These are my reasons for judgment with respect to the parties’ competing property applications.
The parties
The wife was born in 1969 and is aged 48 years. She is a homemaker and parent, save for some casual work in hospitality. In addition, she is undertaking studies for a Bachelor Degree. That course will be completed in two years. It is the wife’s ambition to secure employment on a part-time basis at the conclusion of her tertiary studies.
The husband was born in 1963 and is aged 54 years. The husband deposed in his trial affidavit filed 28 June 2016 that he was then unemployed. At the time of hearing, the husband’s evidence was that he is working on a casual basis. The husband has re-partnered and resides with his partner, Ms H.
The parties commenced cohabitation in late-1999 and married in 2005. The parties separated on 17 December 2013 and they were divorced in March 2016. Hence, their relationship spanned a period of approximately 16½ years.
There is one child of the marriage, G who is aged eight years.
Pursuant to the final orders made by consent on 25 May 2017, G lives with the wife who has sole parental responsibility for making decisions regarding G. The orders provide that the husband spend no time with G and that he have the opportunity to send her cards and gifts on specified occasions each year. The orders also provide for the husband to be provided with information regarding G's progress and in relation to any medical emergency or event that may arise from time to time.
Material relied upon
The wife relied upon the following material:-
·Outline of case document filed 21 October 2016, which includes at Part B the final orders sought by the wife;
·Amended Initiating Application filed 5 September 2016;
·Trial affidavit of the wife filed 5 September 2016;
·Financial statement of the wife filed 5 September 2016;
·Affidavit of Mr J Richards filed 5 September 2016;
·Affidavit of Ms K Richards filed 5 September 2016;
·Affidavit of Ms L filed 5 September 2016; and
·Affidavit of the wife filed 21 April 2017.
The evidence of Ms L was relevant to the parenting aspects of the matter only.
The husband relied upon the following material:-
·Outline of case document filed 19 October 2016;
·Further Amended Response to Initiating Application filed 27 June 2016;
·Affidavit of the husband filed 28 June 2016;
·Financial statement of the husband filed 27 June 2016; and
·Affidavit of the husband filed 28 March 2017.
Orders sought
At the commencement of the hearing the wife sought orders in the terms of Part B of her Case Outline document filed 21 October 2016. The orders sought by her with respect to property were:-
9.That within 30 days of the date of these orders, the husband return to the Wife the items referred to in Annexure A attached to the Wife’s Amended initiating application filed 5 September 2016.
10.That the husband pay to the wife the sum of $60,000.00 (“the payment”) on or within 30 days from the date of these orders (“the date”).
11. That contemporaneously with the payment:
(a)the husband do all such acts and sign all such documents as may be required to transfer to the wife at the expense of the wife all of his interest in the real property known as [B Street, Suburb C], being the whole of the land more particularly described in the Certificate of Title Volume … Folio … (“the [Suburb C] property”);
(b)the wife indemnify the husband against any liability pursuant to the mortgage registered No. … to the Commonwealth Bank of Australia (“the [Suburb C] mortgage”) and all rates, taxes and outgoings of or with respect to the [Suburb C] property of whatsoever nature and kind; and
(c)the husband and the wife do all such acts and do all such tings necessary to enable the wife to refinance the [Suburb C] mortgage into her sole name.
12.That in the event that the whole of the payment has not been made by the date then the husband shall forthwith sign all documents and do all things necessary to transfer to the wife, at his expense, the real property known as [M Street, E Town], Western Australia (“the E Town property”) to be held on trust for sale. The [E Town] property to be sold as soon as possible out of Court (“the sale”) and the proceeds of the sale be applied:
(a)firstly to pay all costs, commissions and expenses of trust transfer and the sale;
(b)secondly to discharge the mortgage/s thereon and any other encumbrance affecting the [E Town] property;
(c)thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 10 per centum per annum adjusted monthly from the date to the wife;
(d) fourthly the balance to the husband.
13.That subject to the husband complying with the orders herein, he retain his interest in the [E Town] property, the funds re-drawn by him from home loan, is interim distribution, the Colonial First State Investment, the AMP shares his [F Fund] account and his bank accounts.
14.That the wife otherwise retain (or the husband transfer to the wife within 30 days if the asset is in his name), the funds withdrawn by her from the [D Town] net proceeds of sale, her interim distribution, the balance of the [D Town] property net sale proceeds, the … motor vehicle and her bank accounts.
15. That the husband resign as trustee of the [N] investment.
16.That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders (the contest of the [Suburb C] property being deemed to be in the possession of the wife);
(b)Monies standing to the credit of the parties in any joint bank account are to become the property of the wife;
(c)That each party forego any claims they may have to any superannuation or employment benefits belonging to or earned by the other;
(d)Insurance policies remain the sole property of the beneficiary named therein;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(f)Any joint tenancy of the parties in any real or personal property is hereby expressly severed.
17.Such further or other orders as this Honourable Court may determine.
It was submitted on behalf of the wife that the effect of those orders sought was to provide for a 67.5 per centum adjustment of the non-superannuation assets in her favour. The wife sought that each party retain their respective superannuation interests.
The wife amended her position during the course of the hearing. It was submitted on her behalf in closing argument that she should receive a 62.5 per cent adjustment of the non-superannuation assets. That adjustment was sought on the basis that the former matrimonial home in Suburb C be transferred to the wife.
At the commencement of the hearing the husband sought orders in the terms of Part H of his Case Outline document filed 19 October 2016. The property orders sought by him in that document were:-
11.That the wife do all acts and things and sign all documents to transfer to the husband at his expense all of her right title and interest in the [Suburb C] property.
12.That the husband pay to the wife a sum calculated to be forty per cent (40%) of the net assets referred to in this Outline.
The effect of the orders sought by the husband was to seek a 60/40 adjustment of the parties’ net assets in his favour on the basis that the husband retain the Suburb C property.
The husband’s position also shifted during the course of the trial. The submission made on his behalf in closing argument was that he should receive a 67 per cent adjustment of the parties’ net assets.
The hearing
The hearing commenced before me on 24 October 2016 and proceeded over nine days between October 2016 and May 2017. Each of the parties was represented by counsel throughout the proceedings.
Much of the focus of the hearing centred on the parenting issues.
Indeed I estimate that the property and maintenance aspects of the matter occupied no more than one day of the proceedings.
The parties’ pool of assets, liabilities and financial resources had an agreed value. An agreed summary of the parties’ assets, liabilities and financial resources was tendered on 27 April 2017 (Exhibit W-2).
The wife and her parents were cross-examined as was the husband. There was also oral evidence from the experts engaged with respect to the parenting issues.
The evidence
In determining the matter, the relevant standard of proof is the balance of probabilities. Section 140 of the Evidence Act 1995 (Cth) provides that, without limiting the matters the Court may take into account in applying that standard of proof, the Court must take into account:-
(a)The nature of the cause of action or defence;
(b)The nature of the subject matter of the proceedings; and
(c)The gravity of the matters alleged.
I have read all documents upon which the parties have relied and the exhibits tendered during the hearing. I have also had the benefit of observing the appearance and demeanour of the witnesses when giving their evidence in Court.
In making my findings, I have given careful consideration to all of the evidence, the nature of the proceedings, the seriousness of the allegations made and the consequences that flow from those findings.
Senior Counsel for the wife submitted that the husband had lied to the Court in relation to his living circumstances, the circumstances of his relationship with his partner and as to his income. It was submitted on behalf of the wife that the husband had failed to provide a clear picture to the Court as to his financial position. As a result, it was submitted on behalf of the wife that this is a matter to be taken into account in the assessment of the matter. I will address those matters later in this judgment.
The issues
There is little in dispute between the parties as to the history of their relationship. The principal issues between them related to:-
·The weight to be attributed to the husband’s initial contributions;
·The weight to be attributed to the contributions made by or on behalf of the wife during the course of the relationship;
·Whether there should be any adjustment pursuant to s 75(2) of the Act and if so, how much;
·Whether the payment to the wife of $40,000 made pursuant to orders dated 20 November 2015 should be characterised as spousal maintenance; and
·Whether the husband or the wife should retain the former matrimonial home in Suburb C.
The law
The parties’ competing property applications are to be determined in accordance with the provisions of Part VIII of the Act. The High Court considered the approach to be adopted in the determination of proceedings pursuant to s 79 of the Act in the decision of Stanford v Stanford (2012) 247 CLR 108. At page 121 the High Court said that “[t]he power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down””. Section 79(2) of the Act provides that a Court should not make an order for property settlement unless it is satisfied that it is just and equitable to do so.
That decision has been considered in detail by the Full Court in Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 (“Bevan”) and more recently in Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592.
In Bevan at [73] the Full Court referred to the three “fundamental propositions” laid down by the High Court which should guide trial judges in approaching the task under s 79. They were summarised as follows:-
1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
(emphasis in original)
Accordingly, in determining competing applications pursuant to s 79 of the Act, the Court is required to:-
·Identify the parties’ respective legal and equitable interests in property;
·Determine whether, in accordance with s 79(2), it is just and equitable to make a property settlement order having regard to the parties’ existing interests;
·Determine all relevant contributions of each of the parties;
·Identify and weigh against each other the matters set out in s 79(4)(a) to (c) inclusive of the Act; and
·Consider the matters contained in s 79(4)(d) to (g) inclusive of the Act and make a determination as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of their contributions, particularly having regard to the provisions of s 75(2) of the Act.
The Act does not prescribe the order in which the matters in s 79(4) are to be considered. The circumstances of individual marriages as to their nature and form differ; how parties have organised and lived within the marriage are factors which may be relevant in the exercise of the discretion pursuant to s 79(2) of the Act.
The Court’s approach may be less compartmentalised than was previously the case and a more “holistic” approach, as described by Murphy J in Watson & Ling [2013] FamCA 57; (2013) FLC 93-527 at [13], adopted.
The asset pool
The balance sheet tendered by the wife (Exhibit W-2) which identifies the agreed pool of assets notes the parties’ interests as follows:-
Non-Superannuation Assets
Value
B Street, Suburb C in husband’s name
$1,200,000
Net proceeds retained by husband after re-drawing from home loan post separation (being $34,000 less $5,000 paid to joint credit card debts)
$ 29,000
Proceeds of sale D Town property, WA (invested by Wife)
$ 13,500
Amount utilised by wife from CBA Netsaver (being sale proceeds of D Town, WA) for legal expenses
$ 17,000
Interim distribution to husband (part property)
$ 40,000
Interim distribution to wife (to be characterised)
$ 40,000
M Street, E Town, WA in husband’s name
$ 370,000
Colonial First State Investment (husband’s name)
$ 187,000
CommSec Account (husband’s name) – AMP shares – …92
$ 14,000
F Fund account (husband’s name)
$ 3,900
Contents (to be divided in specie)
TOTAL
$1,914,400
Liabilities
CBA Mortgage (husband’s name) – (was $211,000 at separation however husband made subsequent re-draws
$ 236,000
Wife’s credit cards (Westpac, MasterCard and AMEX
$Not known
Husband’s credit cards (CBA Visa)
$Not known
VET fee HELP (wife)
$ 8,125
TOTAL
$ 244,125
Description – Superannuation Assets
Wife’s P Superannuation policy (as at 24/8/2016)
$ 103,710
Husband’s P Superannuation policy (as at 24/8/2016)
$ 73,597
Husband’s O Superannuation policy (as at current)
$ 40,780
TOTAL
$ 218,087
Hence, based on that balance sheet the parties’ non-superannuation assets have an agreed net value of $1,670,275.
SECTION 79(2)
From the outset, it was conceded by counsel representing the husband and the wife that it was necessary to make a property order in this matter. Both parties asked the Court to make orders adjusting their respective property interests. There was no challenge to the proposition that it is just and equitable to make orders for property settlement. Accordingly, in circumstances where it is common ground between the parties that they will no longer have joint use and enjoyment of their property, I am satisfied that it is just and equitable to make orders for adjustment of their interests.
The parties’ initial contributions
It is common ground between the parties that at the commencement of cohabitation in 1999 the husband had interests in the following:-
·M Street, E Town which was purchased by him in about 1987 and which was subject to a mortgage;
·Q Street, Suburb R which was purchased by him in 1995 and also subject to a mortgage; and
·Vacant land at B Street, Suburb C which again was subject to a mortgage.
The properties at E Town and Suburb C continue to be held by the husband. The parties engaged a single expert valuer to prepare retrospective valuations of those properties for the purposes of the proceedings.
The property at E Town was valued at $120,000 at the commencement of cohabitation in 1999. At issue between the parties is the amount that was due under the mortgage secured against the title to that property at the time of the commencement of cohabitation. The husband asserts that at that time the mortgage liability was approximately $31,000. The wife challenged that assertion and was critical of the fact that the husband had not produced any documents to prove his assertion.
The wife was cross-examined as to her recollection as to the interests held by the husband at the commencement of cohabitation. During her oral evidence she stated that it was her recollection that the $31,000 owing related to mortgages on properties held by the husband and sold by him prior to the commencement of the parties’ cohabitation. As to the balance owing under the mortgage secured over the title to the E Town property, the wife’s evidence was that at that time the mortgage balance was in the order of $60,000 to $70,000. Hence, the husband’s equity in that property at the commencement of cohabitation was approximately $90,000 on the husband’s view and between approximately $50,000 and $60,000 on the wife’s view.
As to the husband’s equity in Suburb R at the commencement of cohabitation, there is no evidence as to the position at that time. It was common ground between the parties that the husband sold that property in 2001, approximately two years after the commencement of cohabitation, for the sum of $188,500. The husband asserts that the net proceeds of sale from that property were approximately $88,000. Again the wife challenges that allegation and was cross-examined as to her position. During her oral evidence the wife conceded that she could not be certain as to the extent of the sale proceeds as there is no documentation to confirm the amount received. She acknowledged that the husband has disclosed bank account records from that period which shows account balances of between $78,000 and $80,000.
The husband was not seriously challenged as to his recollection of the amount owing in respect of the mortgage secured over the title to Suburb R. Having regard to the wife’s evidence and the concession made by her as to the husband’s bank balance at or about the time of the sale of the Suburb R property, I accept the husband’s contention that the net proceeds of sale from that property were approximately $88,000.
It is also common ground between the parties that the property at B Street, Suburb C was valued at approximately $175,000 at the time of the parties’ cohabitation. Again the issue between them is the husband’s equity in that property at that time. The wife concedes at paragraph 123(c) of her trial affidavit filed 5 September 2016 that as at July 1999 the Commonwealth Bank mortgage secured over the title to the property had a balance owing of $39,093. She was cross-examined as to the husband’s equity in that property at the time of cohabitation and conceded that having regard to the single expert valuation and the mortgage statement the husband likely had equity in the property at that time of approximately $135,000.
During closing submissions Senior Counsel for the wife conceded that the husband’s initial contributions of his equity in the three identified properties totalled approximately $274,000. The husband’s contention is that he had equity in those properties of approximately $312,000 at the commencement of cohabitation.
As to the wife’s initial contributions, it was common ground between the parties that at the commencement of the cohabitation she had interests in the following:-
·Property at S Street, D Town, Western Australia in which she had equity of approximately $60,000. The proceeds of sale of that property were applied in part to meet the partial property settlement in the sum of $40,000 paid to the husband and the wife pursuant to the orders made 20 November 2015;
·Motor vehicle; and
·Superannuation entitlements.
Having regard to the parties’ evidence with respect to the wife’s initial contributions, I am satisfied even on her own case that the husband’s initial contributions were significantly greater than those of the wife.
Contributions during the cohabitation
At the commencement of the parties’ cohabitation they were working in hospitality based in Asia. That employment continued until approximately 2001. In early-2002 the parties commenced working in Europe. The parties continued in that employment until late-2005 when they returned to live in Australia.
Prior to the parties’ departure for Europe, the husband appointed the wife’s parents to act on his behalf under a Power of Attorney. Whilst in Europe, the parties commenced construction of the residence at Suburb C. The wife’s father, Mr J Richards, project managed the construction of that residence whilst the parties were residing overseas. The parties engaged a builder to construct the dwelling at Suburb C. The evidence of the wife and her father is that he was involved in many tasks overseeing the construction project.
The husband concedes at paragraph 119 of his trial affidavit filed 28 June 2016 that the wife’s father assisted in the coordination of the building of the property and further that he assisted with, “electrical and carpentry work as well as the changeover of windows and concreting at the rear of the Suburb C property”.
In addition to that work, the wife’s father Mr J Richards deposes at paragraph 12 of his affidavit filed 5 September 2016 that:-
…[He] was the Project Manager and performed many tasks in this role including performing regular inspections, negotiating with the builder on items that required attention and negotiation pricing. [He] did not receive any payment for performing the role of project manager.
The evidence of Mr L Richards as to his contributions to the Suburb C property was not challenged.
In 2004 the wife inherited approximately $20,000 from the estate of her maternal grandfather, which sum was offset on the purchase price of the property at T Street, Suburb U which the parties purchased from the Estate in 2005. The unchallenged evidence of the wife and her mother is that the Estate agreed to sell the Suburb U property to the parties for $185,000 and after deduction of the wife’s inheritance, the purchase price was reduced to $165,000.
The parties renovated the Suburb U property following its acquisition. The wife’s father assisted the parties with the renovation of the Suburb U property. At paragraph 11 of his affidavit filed 5 September 2016 the wife’s father deposes that he performed the following tasks with respect to the Suburb U renovations:-
(a)Installing new internal water plumbing and storm water plumbing;
(b)Installing new gas hot water service;
(c)Re-wiring the house;
(d)Re-building a new flat-pack kitchen;
(e)Repairing kitchen ceiling and replacing cornice;
(f)Re-built and fitted-out bathroom;
(g)Re-hang [sic] most internal doors;
(h)Performing repairs to the spouting; and
(i)Landscaping and gardening.
That evidence was not the subject of challenge.
In addition to those contributions made by the wife’s father, the husband acknowledges that whilst the Suburb U property was being renovated, the parties resided with the wife’s parents.
It is submitted on behalf of the wife and I accept that the work undertaken by her father to the construction of the Suburb C property and the renovation of the Suburb U property are significant contributions made on her behalf which should be taken into account in the assessment of the parties’ respective contributions.
In January 2005, the wife inherited a further sum of approximately $35,000 from the estate of her paternal grandmother and was also given the sum of $19,500 by her parents, which was given as a reimbursement for her wedding expenses. In June 2005 the wife’s parents gave her a further sum of $25,000. The wife received a total of $79,500 by way of gift or inheritance in addition to the amount which was off-set against the purchase price of Suburb U. The wife’s evidence was that the monies received by way of gift and inheritance was applied by her towards the purchase and improvement of Suburb U.
The parties agree that they both assisted with the renovation of their properties, attending to painting at Suburb C and Suburb U. The husband acknowledges the wife assisted in the establishment of the garden at Suburb C. The wife acknowledged during her oral evidence that the husband painted the internal walls and that she painted the skirting boards and window frames at Suburb U.
Save for those contributions, the parties otherwise adopted what may be described as traditional roles during the course of the marriage. The parties were both engaged in full-time employment up to the birth of G in 2009.
In or about 2006 the parties purchased a business in which they worked together until G’s birth. Thereafter, the wife was a full-time homemaker and parent. She continued to undertake bookkeeping work for the business until its sale in May 2010.
The husband worked full-time in the business. Upon its sale the parties undertook an extended holiday with G. At the conclusion of that holiday the husband obtained employment with Company V in Suburb C and later Company W in Suburb C.
The wife was primarily responsible for G’s care and homemaking tasks. The husband assisted with those tasks, subject to his employment commitments.
Since separation the wife has had the sole care of G which I am satisfied is a significant post-separation contribution.
Should there be an adjustment as a result of the parties’ respective contributions?
It was submitted on behalf of the husband that his initial contributions were considerably greater than those of the wife and as such, they support his contention that he should have a significant adjustment in his favour for contributions made by him at the commencement and during the course of the parties’ marriage.
The wife, whilst conceding the initial contributions made by the husband, submitted that over the course of the parties’ marriage they are but one category of contribution. It is contended on her behalf that her contributions during the marriage, including contributions of inheritances and non-financial contributions made on her behalf by her father lead to a position of equality when considered in the context of the parties’ 16½-year relationship.
The Full Court considered the approach to be adopted with respect to such contributions in the decision of Bremner & Bremner (1995) FLC 92-560. The Full Court at [17] cited with approval the approach of Fogarty J in Money & Money (1994) FLC 92-485 where his Honour stated at page 81,054 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 out-strip those of the other party.
The assessment of the parties’ contributions is not a mathematical exercise. This was confirmed by the Full Court in Garrett & Garrett (1984) FLC 91-539 at page 79,372 where it said:-
The wide and indefinite terms of para. (a) themselves suggest that where appropriate, and certainly in a case like the present, a broad estimate of the financial contribution of each party must be made. Under sec. 79(4)(b) non-financial contribution of each is to be taken into account. This must of necessity be a matter of judgment and not of computation. Similar indications can be found amongst the relevant matters in sec. 75(2). It is also worth noting that para. (a) and (b) refer to the “contribution” and not to the contributions of each party.
In this case it has been possible to determine with some degree of accuracy what the parties brought into the marriage and what they received during cohabitation from their respective families. However, the long term significance of these contributions is not determined as a mathematical exercise. They enhanced the life style of the parties and their children who all benefited from them…
In Norbis v Norbis (1986) 161 CLR 513, Mason and Deane JJ referred to the decision of Nygh J In the Marriage of G and G (1984) FLC 91-582. Their Honours stated at pages 522-523 that:-
… Nygh J. expressed his agreement with the proposition “that it cannot be required of the Family Court that it assesses contributions with mathematical precision with respect to each item”…
…
In this respect we agree with the comment of Nygh J. … that, although mathematical precision is certainly not required, there is ordinarily a need to know the circumstances in which assets were acquired and the general extent of each party’s contribution to them.
(citations omitted)
In Farmer & Bramley [2000] FamCA 1615; (2000) FLC 93-060 Finn J stated at [49] that-:
As to the specific complaint that his Honour's reasons do not reveal how he arrived at the figure of $750,000, it has to be said, that it is not generally possible in the exercise of the discretion under s.79 to say or to ascertain why a particular award is ultimately arrived at. Given that awards under s.79 are virtually never calculated with mathematical precision, no amount of enumeration of, or indeed of evaluation of, contributions, or of the s.75(2) matters, or indeed of any of the matters listed in s.79(4), can ever explain exactly why a particular figure, or more usually a percentage, is eventually arrived at (other than that it is within the recognised “range”). Absent a strict mathematical approach, the reasons for judgment requirement ultimately becomes impossible of total fulfilment in the jurisdiction under s.79.
(emphasis added)
The Full Court confirmed that approach in Clives & Clives [2008] FamCAFC 172; (2008) FLC 93-385. Warnick, Boland and Cronin JJ stated at [44] that:-
We accept that the task to be undertaken by a trial Judge in assessing weight to be attached to initial contributions, and other contributions, is not always an easy one and not discharged by a strict accounting exercise…
I have carefully evaluated all of the evidence as to the contributions made by or on behalf of the parties. However, I have not done so with a rigid mathematical approach as sought by the husband with respect to the assessment of his initial contributions.
I accept that the husband’s initial direct financial contributions were significant and greater than those of the wife. Further, I accept that the parties’ interests available for division include the Suburb C land and the E Town property which the husband held at the commencement of cohabitation. I accept that the assets held by the husband at the commencement of cohabitation provided the parties with the platform from which the parties were able to establish their existing interests. Notwithstanding those matters I am satisfied that the impact of those contributions over the course of the parties’ long relationship has been eroded to some extent as a result of the contributions of both parties during their relationship as well as the contributions, both financial and non-financial, made on behalf of the wife by her family.
It was submitted on behalf of the wife that the parties’ contributions should be assessed as being equal. In contrast, the husband contended that there should be a significant adjustment in his favour in recognition of his initial contributions.
Given the springboard that the property held by the husband at the commencement of cohabitation provided to the parties’ I am satisfied there should be some adjustment in his favour, albeit not at the level sought by him. Having regard to the contributions, both direct and indirect, financial and non-financial made by and on behalf of the parties, I am satisfied that an adjustment of 52.5/47.5 in favour of the husband is appropriate.
Section 75(2) factors
The wife seeks a 12.5 per cent adjustment in her favour in recognition of s 75(2) factors. It was conceded on behalf of the husband that there should be some adjustment in favour of the wife given her responsibility for G’s care.
The wife is aged 48 years and currently engaged in home-making and parenting duties. As noted earlier, she is undertaking part-time studies for a Bachelor of Degree. She will complete that course in two years and she hopes to secure part-time employment in the associated field.
The wife was cross-examined with respect to her capacity to work. The wife conceded that she has worked casually at charity and fundraising events. She also conceded during her oral evidence that she is engaged in her tertiary studies for a period of approximately 12 hours per week and that she is not required to attend university on Tuesdays, Wednesdays and Fridays. When challenged as to her reasons for not seeking part-time employment on those days she stated that she has not been not able to seek employment as she was not “emotionally ready” in the aftermath of the parties’ separation and the disclosures made by G that were the catalyst for the parties’ separation.
Currently the wife is devoted to her parenting responsibilities to G. The wife’s evidence is that G has been deeply affected as a result of the allegations of sexual abuse raised against the husband which have necessitated G’s attendance on health professionals, police and counsellors. As such, the wife’s position at this time is that she is not capable of seeking employment.
Whilst the wife currently does not hold employment, I accept that upon completion of her tertiary studies she will seek appropriate part-time employment. Given the nature of these proceedings and the significant issues raised with respect to G’s health and wellbeing in the context of the allegations raised, I accept the wife’s evidence as to the reasons why she has not sought employment in the period following the parties’ separation. Notwithstanding those matters and to her credit, the wife has taken active steps to improve her qualifications to enable her return to employment in the future.
Currently the wife’s only source of income is her Centrelink entitlements and child support paid by the husband.
The husband is aged 54 years and currently working casually.
At the time of separation the husband was employed on a full-time basis with Company W in Suburb C. Approximately one year after separation the husband commenced working on a fly-in fly-out basis with Company X in Queensland. That employment concluded in December 2015.
The husband deposes in his trial affidavit filed 28 June 2016 that since December 2015 he has made efforts to obtain employment without success. At paragraph 135 of his trial affidavit he deposes that he is registered with a recruitment agency in the hope of securing permanent and on-going employment. At paragraph 136 of that affidavit the husband deposes that his only source of income is the rents received on the E Town property. In his financial statement filed 27 June 2016 the husband discloses rental income of approximately $360 per week as his only source of income.
The husband was cross-examined as to his employment and income. During his oral evidence the husband conceded that Order 17 of the Orders made by Bennett J on 20 November 2015 required each party to advise and keep the other advised promptly in writing within five working days via their solicitors of any change to his/her employment status and income. The husband conceded that he had not complied with that order but justified his non-compliance on the basis that he has only been working a day here or there.
In response to questions as to his income earned from that employment, the husband confirmed that one company for which he worked paid an hourly rate of $24 per hour. The husband stated that he had provided averages of his income to the Child Support Agency and that that agency then passes the information on to the wife and to that extent, he had complied with the November 2015 orders. Having regard to the terms of the orders made 20 November 2015 it is apparent that even if the husband has provided information regarding his income to the Child Support Agency such conduct does not satisfy the terms of the order made by Bennett J.
When it was put to the husband that he was working and earning a significant income he disagreed with that proposition and stated that he had earned an income of approximately $35,000 for the current year.
The husband confirmed during cross-examination that his income earned from the E Town property is $1,424 per month and that there is no mortgage in respect of that property. He was then cross-examined with respect to his banking records, in particular his Smart Access account statements for the period 2 July 2016 to 1 April 2017 inclusive. The husband conceded that his employer Company Y had deposited the following amounts into his account in the August-September period:-
· 4 August 2016 - $1,353;
· 12 August 2016 - $1,320;
· 19 August 20126 - $1,320;
· 2 September 2016 - $564; and
· 9 September 2016 - $768.
The husband was also cross-examined as to income earned from “Company Z” which he stated was a recruitment agency that paid him $49 per hour. His bank statements disclosed the following payments into his savings account from that source:-
· 14 November 2016 - $1467;
· 21 November 2016 - $1,581; and
· 28 November 2016 - $1,540.
When it was put to the husband that he had failed to disclose his income from those sources to the Court the husband responded that he did not know that he had to provide such information to the Court.
The husband was also challenged as to his living arrangements. It was put to the husband that he never informs anyone as to his residential address. The husband disagreed with that proposition. In his affidavits filed in the proceedings, he has disclosed his address as care of his solicitor, and in the case of his trial affidavit he does not disclose an address. In his affidavit filed 26 March 2017 the husband states his address as a post office box in South Melbourne. After further cross-examination, the husband conceded that he was living with his partner Ms H, but qualified that evidence stating that he moves around from place-to-place.
The husband confirmed that Ms H works full-time, that she earns an income of between $80,000 and $90,000 per annum and that she owns a property. The husband does not disclose Ms H’s income at Part E of his financial statement regarding other income earners in his household.
It was submitted on behalf of the wife that the husband had been dishonest as to his living circumstances and income. Based on the husband’s income as disclosed in his savings account statements, it was submitted that his income averages between $50,000 and $60,000 per annum. Having regard to the husband’s oral evidence regarding income received in those accounts, I am satisfied that the husband has been less than frank with the Court as to his financial circumstances. Having regard to the terms of the orders made 20 November 2015 I do not accept the husband’s evidence that he was unaware of his obligations to disclose his income. It was conceded by the husband during cross-examination and I accept that he has earned income which has not been disclosed and that he has had regular part-time work, notwithstanding the matters contained in his trial affidavit material. Further, I am satisfied that the husband has the benefit of living with a partner who has full-time employment and owns property.
The wife will continue to have sole care of the parties’ only child G who is aged 8 years.
Apart from their obligations to G, neither the husband nor the wife has the responsibility to support any other person.
The wife is reliant upon government benefits for her support.
Both the husband and the wife have accumulated superannuation interests, the wife’s valued at approximately $103,000 and the husband’s valued at approximately $114,000. Neither party sought a superannuation splitting order, it being common ground between them that each party should retain their accumulated superannuation benefits.
Although the wife sought an order for spousal maintenance as part of her original application for final orders, the wife did not press that part of her application at the final hearing.
As noted previously the wife ceased work in the parties’ business upon the birth of G and has not been engaged in full-time employment since that time. She is undertaking a course of re-training to enable her to re-enter the workforce within approximately two years. The wife has been absent the work force for a period of approximately eight years. During that period she was the primary carer for the parties’ only child and will continue in that role in the aftermath of these proceedings.
The husband pays child support as assessed under the Child Support Assessment Act (1989). In his financial statement filed 27 June 2016 he disclosed that he was paying child support in the sum of $8.00 per week. By the time the wife had filed her trial affidavit on 5 September 2016 the child support payments made by the husband had increased to $116 per week. Those changes are reflective of the variability of the husband’s income and employment. As noted earlier, the husband has not been completely open with the Court as to his employment and income. This is a matter to be taken into account in the assessment of any adjustment pursuant to s 75(2)(na) of the Act.
It was submitted on behalf of the wife that the husband has not been honest with the Court and that there is no clear picture as to the husband’s current financial circumstances. There is some force in that submission given my earlier findings as to his employment and income. Whilst the husband is engaged in employment on a casual basis only and his income is variable, he conceded during cross-examination that when working he has the ability to earn an income of up to $1,500 per week in addition to the rental income received by him.
Having regard to the above factors I am satisfied that there should be an adjustment in favour of the wife taking into account the relevant matters pursuant to s 75(2) of the Act. This was conceded by the husband. In circumstances where the wife has the full-time care of the parties’ child, she is currently reliant upon government benefits and this will continue for at least another two years, I am satisfied that an adjustment of 10 per cent in favour of the wife is appropriate.
On the agreed net value of the parties’ interests at $1,670,275, that adjustment represents approximately $167,000.
The Suburb C Property
Both the husband and the wife seek to retain the Suburb C property.
On behalf of the husband it is submitted that he should have the opportunity to retain that property as he purchased the land at Suburb C prior to the commencement of the parties’ cohabitation, he undertook physical labour to the renovation of the home and it is where he wishes to live.
During his evidence, the husband conceded the contributions of the wife’s father to the construction of the dwelling on the Suburb C property, but qualified those contributions on the basis that the wife’s father had volunteered his labour and time. It was also put to the husband during his evidence that the wife had also made financial contributions to the construction of the Suburb C property, it being her case that approximately $100,000 from the proceeds of sale of the Suburb U property had been applied to the construction of the dwelling. Whilst the husband acknowledged that there were financial contributions to that construction, his evidence was that it was not to the extent alleged by the wife.
It was also put to the husband that in November 2015, during the hearing of the wife’s application for sole use and occupation of the Suburb C property, it was then the husband’s position that the property should be sold. The husband conceded that that was his position at that time, but that two years on he now sought to return to live in the Suburb C property.
Senior Counsel for the wife put to the husband that his application to retain the Suburb C property (in addition to the E Town property) was a vindictive application intent on punishing the wife. The husband denied that allegation and maintained his position that it was land originally held by him and that it is where he wishes to live.
The wife also seeks to retain the Suburb C property. It is the residence in which she and G have lived since G’s birth save for the period between separation and December 2015 when the husband remained in occupation of the property.
Orders were made on 20 November 2015 by consent that the husband vacate the Suburb C property leaving it in habitable order by no later than 21 December 2015. The wife and G have lived in the Suburb C property since that time and G attends the local primary school which is in walking distance from the property.
It was submitted on behalf of the wife that she has made significant contributions to the development of the land and the construction of the dwelling at Suburb C. In support of that submission she relies upon the unchallenged evidence of her father as to his role as a project manager for the construction of the dwelling as well as the contributions made to the construction. It is also submitted that the wife made financial contributions to the Suburb C property albeit not at the level made by the husband.
The wife contends that in circumstances where the husband will retain his investment property at E Town in Western Australia and has the opportunity to reside with his partner at her property in Suburb AA, justice and equity requires that she have the opportunity to retain the property in which she has lived with the parties’ only child for the past two years.
Having observed the father during cross-examination I am not satisfied that the husband’s desire to retain the Suburb C property is driven by any malevolence towards the wife. The reality is that the parties worked together, with the assistance of the wife’s family, to develop the property and construct a home. That both parties have an attachment to the property is understandable.
Doing the best I can, I accept the submission made on behalf of the wife that she should have the opportunity to retain the Suburb C property. The reality is that both parties were involved in and contributed to the construction of the dwelling at the Suburb C property. As discussed previously the evidence of the contributions made by the wife’s father to that property is unchallenged. I also have regard to the fact that it is the property in which G has lived for most of her life and it is a property which is proximate to her school. Any change in her living arrangements would likely cause her significant disruption and would be unsettling. The husband will retain his investment property in E Town and has the benefit of a partner who owns a property in Suburb AA. Accordingly, I am satisfied it is appropriate that the wife have the opportunity to retain the Suburb C property as part of her property settlement.
Conclusion
Taking into account the matters pursuant to s 79(4) of the Act, I am satisfied that there should be a division of assets on the basis that the wife receives 57.5 per cent and the husband receives 42.5 per cent of the available pool.
The agreed net value of the parties’ non-superannuation assets is $1,670,275. Based on the agreed net value of that pool the wife is entitled to assets valued at $960,408 and the husband to assets valued at $709,867.
Whilst the wife sought an order that the payment of $40,000 to her pursuant to orders made in November 2015 be characterised as spousal maintenance, I am not satisfied that the husband’s income earning capacity at the time that order was made (or since) is sufficient to justify an order in those terms. Although I have made findings that the husband has been less than frank with the Court as to the extent of his income, the reality is that the evidence before the Court confirms that the husband’s employment has been casual and that whilst there have been periods where he has earned slightly in excess of $1,500 per week, that evidence also indicates there have been periods where he has earned significantly less than that. Accordingly, the payment to the wife of $40,000 pursuant to the orders made 20 November 2015 is characterised as part-property settlement and taken into account by me in calculating the parties’ entitlements’ pursuant to s 79(4) of the Act.
Therefore, the assets identified in the list of non-superannuation assets to be retained by the wife are as follows:-
·Suburb C property $964,000
·Proceeds of D Town property used by wife for
legal expenses $ 17,000
·Part property distribution to the wife $ 40,000
·Proceeds of sale of D Town remaining $ 13,500
·VET Fee HELP ($8,125)
Hence the wife will retain assets valued at $1,026,375. In order to achieve an adjustment in her favour of 57.5 per cent of the parties’ non-superannuation assets, the wife will be required to effect a payment to the husband of $65,967.
Therefore, the husband will retain assets valued at approximately $709,867 comprising of:-
·E Town property $370,000
·Colonial First State investments $187,000
·AMP Shares $ 14,000
·F Fund account $ 3,900
·Part-property payment $ 40,000
·Net proceeds retained by husband after re-draw of
home loan $ 29,000
·Payment to him pursuant to these orders $ 65,967
Having regard to the contributions made by and on behalf of each party during the course of the relationship, I am satisfied that the orders I will make will be a just and equitable result as between the husband and the wife.
The orders
The orders that I will make are as follows:
1.That within 60 days (“the date”) the wife pay or cause to be paid to the husband the sum of $65,967 (“the payment”).
2.That contemporaneously with the payment:-
(a)The husband do all such acts and sign all such documents as may be required to transfer to the wife at the expense of the wife all of his interest in the real property known as B Street, Suburb C, being the whole of the land more particularly described in the Certificate of Title Volume … Folio … (“the Suburb C property”);
(b)That wife indemnify the husband against any liability pursuant to the mortgage registered No. … to the Commonwealth Bank of Australia (“the Suburb C mortgage”) and all rates, taxes and outgoings of or with respect to the Suburb C property of whatsoever nature and kind; and
(c)The husband and the wife do all such acts and things necessary to enable the wife to refinance the Suburb C mortgage into her sole name.
3.That in the event that the whole of the payment has not been made by the date then the husband and the wife do all such acts and things and sign all such documents as may be required to effect a sale of the Suburb C property and the proceeds of the sale be applied:-
(a)Firstly, all costs, commissions and expenses of the sale:
(b)Secondly, to discharge the mortgage thereon and any other encumbrance affecting the Suburb C property;
(c)Thirdly, to pay to the husband so much of the payment as is then outstanding together with interest thereon at the rate prescribed by the Family Law Rules 2004;
(d)Fourthly, the balance then remaining to the wife.
4.That there be liberty to apply with respect to the terms and conditions of the sale.
5.That the wife retain for her own use and benefit absolutely:-
(a) The Suburb C property;
(b) The proceeds of sale of the D Town property applied towards her legal expenses (estimated at $17,000) and invested (approximately $13,500);
(c) Part-property payment in the sum of $40,000 paid to the wife pursuant to orders dated 20 November 2015;
(d) The motor vehicle; and
(e) Her savings accounts.
6.That the husband retain for his own use and benefit absolutely:
(a)The E Town property;
(b)The Colonial First State investments valued at approximately $187,000;
(c)The AMP shares;
(d)The F Fund account;
(e)The part-property payment in the sum of $40,000 made pursuant to orders dated 20 November 2015;
(f)Amounts re-drawn by the husband from the home loan in the sum of approximately $29,000;
(g)His savings accounts.
7.That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:-
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)That each party forego any claims that they may have to any superannuation or employment benefits belonging to or earned by the other;
(c)Insurance policies remain the sole property of the beneficiary named therein;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)Any joint tenancy of the parties in any real or personal property is hereby expressly severed.
8.That all extant applications be otherwise dismissed.
9.That documents produced under subpoena be returned.
I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 19 December 2017.
Associate:
Date: 19 December 2017
Key Legal Topics
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Family Law
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Equity & Trusts
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Injunction
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