Rogers and Rogers
[2007] FMCAfam 841
•16 October 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROGERS & ROGERS | [2007] FMCAfam 841 |
| FAMILY LAW – Property settlement – assets to be included in the pool – sale of property below value – payments for modification to home to enable elderly person to reside with family – assessment of contributions. |
| Family Law Act 1975 (Cth), ss.79(4), 75(2) |
| Pearce and Pearce (1998) 24 FamLR 377 Williams & Williams [2007] FamCA 313 |
| Applicant: | JOSEPH ROGERS |
| Respondent: | VERONICA ROGERS |
| File number: | SYM4234 of 2006 |
| Judgment of: | Housego FM |
| Hearing date: | 21 September 2007 |
| Delivered at: | Parramatta |
| Delivered on: | 16 October 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Maurice |
| Solicitors for the Applicant: | Felicio Law Firm, Erina, New South Wales |
| Counsel for the Respondent: | Ms Haughton |
| Solicitors for the Respondent: | Ian Harper & Co, Parramatta, New South Wales |
ORDERS
Within 28 days the husband do all acts and things necessary to transfer to the wife his interest in the parties’ joint ANZ bank account.
Within 28 days the husband pay to the wife $30,324.00.
Liberty to apply within 14 days in relation to the mathematical calculations.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM4234 of 2006
| JOSEPH ROGERS |
Applicant
And
| VERONICA ROGERS |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr and Mrs Rogers married in 1978 and they continued to cohabit, although with some interruptions to their cohabitation, until 2003 at which time they finally separated. After this lengthy period of 25 years the parties have been unable to agree as to property settlement, and I am asked to determine what is a just and equitable distribution of the parties' assets.
The assets of the parties have been largely agreed and they are set out in an amended joint balance sheet which was provided to me at the outset of this further hearing of the competing applications. In the joint balance sheet there are some issues in dispute.
The first of these is the question of whether or not I ought add back into the pool monies paid by the husband to his daughter for renovations and adjustments to her home so that she could take him to live with her. The sum paid is agreed at $74,823.
The next issue is whether I ought add back into the pool the sum of $40,000 being the benefit to the wife's daughter, Verity Greenwood Graham, of her acquiring property from the mother at $40,000 under valuation. This valuation was obtained for the assessment of stamp duty on the transfer from mother to daughter.
The third issue is whether I ought take into account, in the same manner as I do the monies paid by the husband to his daughter, the bond monies paid by the wife to Amity Group for her to ensure her ongoing care in a nursing home operated by that entity.
Identification of the parties’ assets and liabilities
I find the assets of the parties are as follows:
Assets held by husband
Value
1. ANZ account
$73,377
2. Loan to grand-daughter
$117,000
3. Toyota Hi-Lux 2001 motor vehicle
$12,000
4. Share of caravan
$7,000
5. Household contents
$2,150
6. Paid Legals or in trust (husband)
$18,400
7. Payment for renovations to daughter’s home to accommodate husband
$74,823*
8. Australian Unity Funeral Fund
$200
Total Assets held by husband
$304,950
Assets held by wife
Value
9. Bendigo bank account number XXXX
$8,000
10. Bendigo bank account number XXXX
$153,850
11. Personal property
$3,000
12. Bond held by Amity Group
$97,529
13. Gift to Verity Greenwood Graham
$40,000*
14. Paid Legals or in trust (wife)
$39,980
Total Assets held by the wife
$342,359
Assets held jointly
Value
15. Balance of joint account
$6,408
Total Assets held jointly
$6,408
Total Asset Pool
$653,717
* Value of assets in contention
I will now turn to the treatment of the contentious inclusions in the above identified assets, namely the monies paid by the husband to his daughter in relation to renovations to her property to enable her to accommodate him. The wife's counsel asks that this payment be treated together with the $40,000 that I have already dealt with, but I do not find the logic in relation to that approach at all persuasive.
After extensive consideration of the approach to be adopted in relation to these monies with both counsel during the course of submissions before me, it seems that the proper approach to adopt in relation to the $74,823 paid by the husband for renovations is to regard it as an asset or property of the same character as the bond paid by the wife to the Amity Group. That is, it is a payment which has been made by a party legitimately for the purpose of acquiring accommodation in circumstances where that party is no longer able to provide for themselves because of failing health and infirmity.
I sought to have counsel for the husband consider whether or not the contribution of this sum gave rise to any form of legal or beneficial interest in the daughter's property, and I was not invited to draw such a conclusion. It seems to me that it may indeed be difficult for me to form such a determination having regard to the paucity of evidence as to what the monies were actually expended upon and the purpose to which all of that expenditure has been put.
The figure itself has not been arrived at by a calculation from objective evidence such as invoices and receipts for goods and services purchased. Rather it is from determining the difference between monies that were in the hands of the husband before he went to live with his daughter and started the process whereby she could access his funds for the purpose of undertaking renovations to her home, and the monies now held, the identified sum of $74,823, being the difference between the two. The figure is, nonetheless, agreed.
It is clear that, as part of the husband's daughter's taking him to live with her, substantial renovation to her property has been required. This was not contentious in large part, although the husband was cross-examined reasonably vigorously, it would appear from the transcript, about the items of expenditure themselves.
One matter which seemed to draw significant attention was the investment by him in a swimming pool. The wife's counsel complains that that investment was only identified during the course of the husband's evidence. I do not find anything sinister arises from his evidence, and he was unchallenged, although the subject was returned to on a number of occasions, as to his evidence that his arthritis required him to have the pool for exercise.
In the circumstances it does not seem to me appropriate to be critical of the husband for expending his monies in this way. Nor should I find that such expenditure was not in fact necessary for the purpose of him obtaining proper and adequate accommodation in his daughter's home. Whether or not any of those monies will at any stage in the future be returned to him should he need to do as the wife has already done and commence residence in some form of assisted nursing care, is a matter for the future. I do not have to determine that in the context of this case.
I do find that the monies have been expended in the sum that I have indicated and that those monies have been expended for the proper purpose of obtaining accommodation for the husband with his daughter. Accordingly, that sum ought be treated notionally as forming part of the assets in the husband's hands.
The next contentious issue to turn to is the treatment of the under-value of $40,000 referred to in the wife’s conveyancing transaction.
The wife contends that the undervalue in the conveyancing transaction ought not be added back into the pool. Firstly, she says that Ms Greenwood-Graham has had no benefit from that transaction as she has now onsold the property for the same price that she bought it for and therefore has made no profit. Secondly the wife says that the transaction (and hence the underpayment) occurred in circumstances where the monies were needed to be raised urgently to accommodate the wife in a nursing home.
However, during submissions the wife's counsel conceded that if the further transaction, being the sale by the wife's daughter to a third party, had not occurred, it would have been appropriate for the $40,000 to be added back into the pool. It does not seem to me that, simply because the property has now been conveyed to a third party, this changes the approach that ought to be adopted.
The valuation itself was obtained for the purpose of payment of stamp duty: two parties to the conveyance being related, evidence as to value was required by the revenue authorities. That valuation was obtained and forms part of the wife's case and identifies the value of the property as $440,000. Notwithstanding valuation the wife transferred the property to the daughter for $400,000.
There was cross-examination of both the wife and her daughter in relation to the circumstances in which the transaction took place. The evidence, which was not taken before me but which forms part of the transcript, together with the affidavit material seems to me to be quite unsatisfactory so far as providing a coherent or plausible explanation as to the circumstances in which the conveyancing transaction took place.
There is also the discrepancy between the assessment of the condition of the property. This discrepancy is quite marked when the valuation itself is examined together with the wife's daughter's evidence both in her affidavit and under cross-examination. I find this discrepancy to be troubling in the context of the case, and it seems to me preferable to rely on the evidence of a licensed valuer as to what the actual value of the property was, that is, $440,000, and its state of repair.
Reviewing all the evidence in relation to the transaction I am not satisfied that there is any proper basis for determining that the transaction had an actual value of $400,000 as both the wife and the wife's daughter seeks to establish. The wife's counsel submits that because the monies transferred between the wife and her daughter was $400,000 that that is an appropriate value for me to place on the property, in which event I would not add any monies back into the pool. I do not accede to this submission.
The asset clearly formed part of the properties that this Court would have regard to in the course of examining the financial position of the parties. The effect of the transaction has been to place $40,000 outside the pool of available assets. Accordingly it does seem to me that this is a case in which I would appropriate add that foregone sum back into the pool and so I place the sum of $40,000 notionally in the assets now retained by the wife.
As to the bond paid to the Amity Group, that sum has now diminished from the figure which was identified when the proceedings were before FM Morcombe. The figure of $97,529 represents, as I am informed by both counsel, a current value for that bond. As I understand the evidence, that bond diminishes in time at a rate which is determined by the Amity Group.
The real question in relation to this bond is whether or not it is in the same nature as the payment by the husband to his daughter in relation to accommodation and other renovations. It seems to me that, as neither counsel wished to have the actual nature of the interest in these two items identified or determined by me, the proper course of action is as I have already stated: that is, that I treat both sums as monies properly spent by the parties in securing accommodation at a time in their life when they clearly need assistance because of their deteriorating health and their frailty. It would be inequitable and unjust for me to treat one any different to the other payment, notwithstanding that one payment is by way of a contractual obligation, that is, the bond to Amity Group, and the other is some form of contribution whether it be made by way of a contribution to property or a personal payment to the husband's daughter.
Where I am specifically discouraged from concluding what the nature of the interest is, I find that it is even more appropriate for me to treat both payments as accommodation-securing payments and to treat each of them in the same way in the parties' overall schedule of assets.
The remaining matters in the table of assets that I have referred to are uncontentious. In conclusion, then, I find that the total asset pool of the parties is $653,717, of which only one component is held jointly by the parties, that being the bank account of $6,408 in their joint names.
Contributions
The next question for me to consider is the nature of the contributions of each of the parties during the course of their cohabitation and also whether there are any relevant discrepancies in their initial contributions. The husband seeks that I assess the contributions of the parties overall at 50 per cent. For her part the wife contends that the appropriate adjustment would be 60/40 per cent in the wife's favour. The reason that is offered for the adjustment in the wife's favour is that her initial contribution was greater than the husband.
This does not appear to be contentious. Both parties owned property at the time that they commenced living together, and it would appear that the property in the wife's hands was of greater value than that of the husband. However, there is no evidence to enable me to establish with precision the differential between the two properties and it may be inappropriate for me to do so by reference to any mathematical calculation absent any evidence.
What is clear, though, is that during the course of the parties' marriage there was a continuing financial contribution by the husband which was superior to that of the wife. The parties married in 1978 and for the following 10 years the husband was in full-time employment. At the time that the parties married the wife had already retired from her full-time job as a teacher three years previously. Whilst she continued to undertake some casual work after her retirement, the wife's evidence was that her earnings from this casual employment were insufficient to warrant her filing any tax returns after 1975.
The clear conclusion to be reached from the evidence of both of the parties in relation to financial contribution is that while the wife's initial contribution was superior, as represented by the greater value of her home, the financial contribution of the husband during the course of the marriage exceeded that of the wife.
There is little before me in relation to the question of non-financial contribution and I make no assessment of what the parties' respective contributions were in relation to that issue.
There was cross-examination of each of the parties in relation to their contribution in the home-maker category, and the evidence of both of the parties that emerged is conflicting. The husband gave clear evidence that he had attended to certain tasks, including repair and renovations to the property. Indeed it may be that if his evidence was accepted in its entirety that he also undertook some significant non-financial contributions to the enhancement of at least one of the properties.
For her part the wife did not concede that these contributions were made. On the one hand she did confirm that the husband was a good tradesman, but her evidence was qualified by her comment that he was not, in fact, qualified. The wife did not concede that the husband assisted around the home or that he did much or anything in the way of gardening and other household duties. On reading her evidence it would appear that her recollection of the circumstances in which the parties co-habited was that the husband did little, if anything, for her.
The difficulty I have with this conflict in the evidence is that it is clear from reading the transcript that the wife's evidence may well be clouded by the passage of time. The answers given by her in relation to her cross-examination on this issue are quite inconsistent. It is not possible for me to determine whether that is because she did not understand the question, whether she was having difficulty with the question, whether she did not hear the question, or whether she simply did not accept the proposition which was put to her.
It is clear from reading the transcript that the wife did, from time to time, have difficulties with the Court process, which of course took place with her not present in the courtroom. She remained throughout at her nursing home and was cross-examined and otherwise heard evidence by telephone alone. Late on the first day of the hearing itself she appears to have been in some considerable distress, although when the issue of that was considered by the learned Federal Magistrate and both counsel, the wife, after some short period of time, volunteered a willingness to continue with the proceedings on that day.
Standing back from the factual dispute between the parties and the difficulty of establishing which of them is correct in their recollection about the type of contributions of a non-financial nature, whether in relation to the property or in the category of home-maker, it is clear that the parties were together for a long period of time, notwithstanding some disruptions to their cohabitation.
It is also clear that during the period in which they remained together they pooled assets including monies received by them such as pension monies and the like. Those monies went into a joint account. I find it is open to me to conclude that the wife did not have significant complaint about the husband's lack of discharge of any household duties, because no steps were taken by her in relation to any legal redress or demands in relation to those. Indeed, these proceedings were commenced not by her but by the husband.
Having regard to the authorities of Pearce and Pearce (1998) 24 FamLR 377, and more specifically Williams & Williams [2007] FamCA 313, to which I was taken by the husband's counsel, it seems to me that a proper assessment of the parties' respective contributions, having regard to the difficulties occasioned by the age of the parties and the period of time over which their life together was considered is as follows: I assess the contributions as initially favouring the wife, and during the course of the parties' time together, favouring the husband.
This assessment is based on the clear evidence of the initial superior contributions of the wife, the continuing superior financial contributions of the husband, and my conclusion that the most appropriate assessment of the parties' other contributions is to conclude that they were effectively balanced as against each other. My overall conclusion then as to contributions in the circumstances of this case is that the parties' respective contributions were equivalent.
Section 75(2) adjustments
The next issue for me to determine is whether there ought to be any adjustment for 75(2) factors. For his part the husband asks that no such adjustment be made, although he readily concedes that both parties are in circumstances where they need assistance with their current living arrangements. The husband's counsel reminds me that there is no evidence before me in relation to the life expectancy of either of the parties. While it is readily conceded that the wife's situation does now require her to have assistance and that it is unlikely that her prognosis will improve, that there is no proper basis on which I can take this into account.
For her part the wife's counsel contends that I ought to make an adjustment of a further 10 per cent in favour of the wife. The basis for this assertion is that the wife currently expends $3000 per month in relation to her nursing home expenses, and accordingly over a period of some time her entire asset entitlement from these proceedings will be extinguished. I am sympathetic to the argument that there ought to be an adjustment in the wife's favour and I think it is appropriate to make such an adjustment.
The difficulty I have, though, is in accepting that that adjustment ought to be as high as 10 per cent in the circumstances of this case. The wife's current condition is one which suggests that she is quite frail. There is certainly no evidence that she is likely to have her health improved to any extent that would enable her to live independently of the nursing home. Accordingly I accept that she will have to remain in such accommodation with the necessary expenses, and these expenses do exceed those of the husband in providing for his current living arrangements. This warrants the making of an adjustment in the wife's favour.
However, it is not appropriate, in my view, to adjust by as much as 10 per cent. The argument that if I do not take such a step the wife's pool of assets will ultimately be extinguished, is not one which I find has any merit. Rather this is a balancing exercise where I consider the respective positions of each of the parties and weigh up their health and frailty. It may be that the wife, who was not present in Court before me at all, may outlive the husband. It may also be that she does not. There is no evidence to assist me in relation to assessment of these matters which would, in the context of a s.75(2) argument, have been most helpful.
In all the circumstances, as I have already found that both parties will need to continue to live in assisted living accommodation and that that may not, in the husband's case, mean that he can remain residing with the daughter, it seems to me that a proper exercise of my discretion would be to adjust the contributions a further 7.5 per cent in the wife's favour.
Conclusion
Accordingly, the order that I make is that the property of the parties which I have identified, $653,717, be distributed 57.5 per cent in the wife's favour, making a total payment to her of $375,887.27. As the wife already has in her possession the sum of $342,359, that means properly she would be receiving $33,528.27. A portion of those monies would come from the parties’ joint bank account. Accordingly the payment to the wife ought be $30,324, rounding down to the nearest dollar.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Housego FM
Associate: Maryrose Portelli
Date: 16 October 2007
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