Rolland and Serle
[2012] FMCAfam 1096
•19 October 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROLLAND & SERLE | [2012] FMCAfam 1096 |
| FAMILY LAW – Property settlement – valuations of real estate – assessment of contributions – future needs – wife with substantial care of child – husband suffering physical and psychological consequences of a serious assault. |
| Family Law Act 1975 ss.75(2), 79(2), 79(4) |
| Hickey v Hickey (2003) 30 Fam LR 355; (2003) FLC 93-143; [2003] FamCA 395 |
| Applicant: | MR ROLLAND |
| Respondent: | MS SERLE |
| File Number: | MLC 1785 of 2011 |
| Judgment of: | Riley FM |
| Hearing dates: | 2, 3, 15 and 16 August 2012 |
| Date of Last Submission: | 17 September 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 19 October 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Williams |
| Solicitors for the Applicant: | Pearsons Barristers & Solicitors Pty Ltd |
| Counsel for the Respondent: | Mr Davis |
| Solicitors for the Respondent: | Barbayannis Lawyers |
ORDERS BY CONSENT
In accordance with s.90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the superannuation interest of the wife in the [C] Super (Fund) where the trustee is [C] Superannuation Corporation Pty Ltd (Trustee), the husband will be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulation 2001 using the base amount of $50,000, and there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders.
This order binds the trustees of the funds and takes effect from the operative time being the fourth business day after the date of service of these orders on the trustee;
The trustees of the funds in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, shall do all such acts and things and sign all such documents as are necessary to calculate the entitlement of, and make payment to the wife in accordance with this order.
The wife be and is hereby restrained by herself, her servants and/or agents from executing a death benefit nomination in favour or any person or doing any other acts or things which would render any part of her interest in the funds a “non-splittable payment” within the meaning of regulations 12 or 13 of the Family Law (Superannuation) Regulations 2001 including executing any binding death benefit nomination in favour of any child who is an eligible beneficiary within the meaning of the rules of the said fund.
ORDERS
Within thirty days:
(a)the $219,000 held on trust on behalf of the parties from the proceeds of sale of Property A, [S] be released to the husband; and
(b)the wife pay the husband the sum of $114,849.50.
Contemporaneously with the payment of those two sums:
(a)the wife provide to the husband a withdrawal of the caveat registered by her on the property at Property D, [R];
(b)the husband provide to the wife withdrawals of caveats registered by him on the properties at Property E, Property V, [R] and Property W, [R]; and
(c)the husband do all things necessary to transfer the ownership of the Mazda 6 motor vehicle into the wife’s sole name at her expense.
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 party, to all property (including choses-in-action) in the name or possession of the party (the furniture, personal possessions and like chattels in the real property deemed to be in the possession of the husband) and indemnify the other party in relation to any liability relating to that property;
(b)each party forego any claim or claims he or she may have to any superannuation benefits belonging to or earned by the other party; and
(c)insurance policies and share portfolios remain the sole property of the owner named therein.
The parties have liberty to apply in relation to the implementation and enforcement of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Rolland & Serle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 1785 of 2011
| MR ROLLAND |
Applicant
And
| MS SERLE |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property settlement. The parties married on [in] 2005 and finally separated on 10 May 2010. The parties have one child, [X], who is now seven years old. During the trial of this matter, both parenting and property issues were in dispute. However, after the hearing, to their credit, the parents were able to resolve their parenting issues by consent.
The legislation
Section 79 of the Family Law Act1975 (“the Act”) defines the court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the court must take into account when considering what orders should be made for the alteration of the interests of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The four step approach
In Hickey v Hickey (2003) 30 Fam LR 355; (2003) FLC 93-143; [2003] FamCA 395 at [39], the Full Court of the Family Court described the preferred four step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, the court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
STEP 1: The assets and liabilities
Superannuation
The parties agreed that the wife had superannuation at the time of the marriage of $131,000, which had increased to $231,000 at separation. That is an increase during the relationship of $100,000.
The parties also agreed that the husband had superannuation at the time of the marriage of about $17,000 and his superannuation did not increase at all during the marriage.
The parties agreed that there should be a superannuation split of $50,000 from the wife’s superannuation to the husband. In the context of the other orders to be made in this case, the proposed superannuation split appears to me to be just and equitable. Procedural fairness has been afforded to the superannuation trustee. Accordingly, there will orders by consent as proposed by the parties in relation to superannuation.
Non-superannuation assets and liabilities
The parties’ assets and liabilities at the time of trial were as follows:
ASSETS
ANZ Bank
$219,000
Agreed
Funds previously received by the husband
$20,000
Agreed
Funds previously received by the wife
$20,000
Agreed
Property W, [R]
$610,000
(Wife’s value)
$695,000 (Husband’s value)Not agreed
Property V, [R]
$472,500
Agreed
Property D, [R]
$550,000
(Wife’s Value)
$500,000 (Husband’s Value)Not agreed
Property E
$285,000
Agreed
Property B, [R]
$475,000
(Wife’s value)
$505,000 (Husband’s value)Not agreed
Taxi Licence number [1]
$460,000
Agreed
Taxi Licence number [2] (one third share)
$153,333
Agreed
Taxi Licence in the name of [J] P/L [3]
$460,000
Agreed
Commonwealth Bank Shares (1,993 ordinary fully paid shares)
$106,645
Agreed
Monies received by wife from the Property V mortgage post separation
$52,000
Agreed
Mazda 6 motor vehicle in the name of [G] Pty Ltd
$21,000
Agreed
Toyota Hi-Ace van in husband’s name
$8,500
Agreed
Honda motorcycle in husband’s name
$10,000
Agreed
Funds received from the sale of the Mitsubishi Magna motor vehicle by the husband
$2,000
Agreed
Wife’s savings at separation
$15,000
Agreed
Husband’s prepaid legal costs
$35,000
Agreed
Wife’s prepaid legal costs
$32,000
Agreed
Total non-superannuation assets
$4,006,978 (Wife’s Value)
$4,071,978
(Husband’s Value)LIABILITIES
Mortgage in relation to Property W, [R]
$155,183
Agreed
Mortgage in relation to Property V, [R]
$65,054
Agreed
Loan in relation to Taxi Licence [1]
$39,924
Agreed
Loan in relation to Taxi Licence in the name of [J] P/L
$117,164
Agreed
Mortgage in relation to Property B, [R]
$521,094
Agreed
Capital Gains Tax in relation to
Property E
$27,394
Agreed
Total Liabilities
$925,813
Areas of dispute
The matters in dispute, as far as the assets are concerned, are the values of:
(a)Property B, [R];
(b)Property W, [R]; and
(c)Property D, [R].
In relation to the values of the real property, the parties relied on evidence given by licensed valuers. The husband relied on Mr M’s evidence, and the wife relied on Mr D’s evidence. Mr M swore an affidavit on 2 August 2012. Mr D swore an affidavit on 20 July 2012. On 14 August 2012, two days before giving evidence in this case, Mr D swore a further affidavit in which he updated his valuation of Property B. Mr D and Mr M gave evidence from the witness box together. They were ultimately unable to agree on the values of any of the properties in dispute.
a. Property B
Mr D initially valued Property B at $490,000. Mr M initially valued that property at $520,000. Mr D and Mr M met on 2 August 2012. On that day, they agreed that Property B was worth $505,000. However, that agreement was never formalised. Later, Mr D discovered some more recent sales in the area. He then revised his value down to $475,000. Mr M continued to be of the view that $505,000 was the correct value of Property B.
In cross examination, Mr D agreed that the correct approach to the valuation of real estate is:
(a) to identify recent, comparable sales;
(d)if there were none, to ascertain the land value in the area and then value the improvements to the property; and
(e)to speak to agents in the area.
Mr D denied that it was appropriate to refer to council valuations.
He said they were simply another valuer’s opinion and tended to be out of date. Mr D also denied that Property B only had value as a development site. He said the improvements on the land were worth $75,000.
Mr M said that he had looked for comparable sales in the area within 10 streets of Property B. Mr M said that the local council in 2010 had valued the property at $646,000, with no value attributed to the improvements on the land. Mr M said that he had discovered one hour before giving oral evidence that the local council had released new rates figures the previous week for values in the area as at 1 January 2012. The council said, at that time, Property B was worth $536,000, including $13,000 for the house itself.
Notwithstanding the council valuation, Mr M, and the husband, accepted the value of $505,000 that had been agreed at the meeting on
2 August 2012. Mr D stood by his revised valuation of $475,000. That is a difference of $30,000.
Mr M said that his key comparable sale was Property G. That property sold for $565,000 in April 2012. Its land area was a little larger than Property B. Based on Property G selling for $596 per square metre, plus $150 per square metre for the buildings, Mr M calculated Property B to be worth $520,000, which was reduced to $505,000 in accordance with the agreement on 2 August 2012.
In his first affidavit, Mr D referred to the sale of Property O. That property sold for $400,000 on 16 June 2012. Mr D said that, since his first affidavit, he had learned of two very recent comparable sales. The first was the sale of Property U. Mr D said it sold for $435,000 on 31 July 2012. He said he attributed $390,000 to the land value and $35,000 to the house. He said the land at Property U was of a similar size to the land at Property B, but Property U was in a slightly inferior position.
The second very recent sale referred to by Mr D was of Property Y. That property sold for $481,000 on 3 August 2012. Mr D said he attributed $390,000 to the land value and $91,000 to the house. He said that the blocks at Property Y and Property B were of a similar size, but Property Y was in a slightly inferior position. Mr D said that the brick veneer house at Property Y was slightly superior to the house at Property B.
Mr M said he knew nothing of the sales of either Property U or Property Y. He said he had not investigated them because he thought there was an agreement as to the value of Property B. He said, on 16 August 2012, that if he had seen Mr D’s updated affidavit on 14 August 2012, when it was sworn, he would have looked at the properties in question. However, he said he was only given Mr D’s updated affidavit 30 minutes before coming into court.
Nevertheless, Mr M said that the evidence of the very recent sales did not change his opinion. He said that, without knowing more about the circumstances of the sales, he could not conclude that they were in fact comparable. He said, for example, that he (and, obviously, the court) did not know whether the properties had single house covenants on them, whether the properties were sold in mortgagee sales or in other circumstances of urgency, or whether they were transfers between related parties.
Mr D was then asked to tell the court about the circumstances of the sales of Property U and Property Y. Unfortunately, Mr D did not do so, but spoke at length about the sale of Property O for $400,000 on 16 June 2012. Mr M said he had not investigated that sale, even though it was referred to in Mr D’s affidavit sworn on 20 July 2012. Mr M suggested that he had not investigated the sale of Property O because there was an urgent meeting on 2 August 2012 at which an agreement was reached as to the value of Property B. Why he had not investigated the sale of Property O prior to the meeting on 2 August 2012 was not explained.
I do not consider that the agreement reached between the valuers on
2 August 2012 as to the value of Property B is binding on the parties. It was not formalised, in the sense that the solicitors did not exchange written communications confirming the supposed agreement. Neither party argued in closing written submissions that the agreement was binding. On the contrary, the wife sought to resile from it. The husband made no specific closing submissions at all about valuations.
The evidence about the value of Property B is unsatisfactory. Mr M did not know anything about the most recent sales in the area. Mr D gave the court no information about the circumstances of the most recent comparable sales. There was no application for an adjournment to enable Mr M to investigate the most recent sales. Nor was there any objection to the evidence of the most recent sales.
All in all, I prefer the evidence of Mr D on the value of Property B. It relies on more recent sales than Mr M’s evidence. Indeed, several of the sales relied on by Mr M occurred in 2011, even though he accepted that prices in the area had declined by 9.3% in the previous 12 months.
Mr M’s estimate of about $600 per square metre was far above the more recent sales identified by Mr D, which worked out to be about $450 per square metre. I accept that the value of Property B at the time of trial was $475,000.
b. Property D
Mr M valued Property D at $500,000 and Mr D valued it at $550,000. Mr M considered that the house on the property would probably be demolished and the site used for redevelopment. Mr D considered that the most probable purchaser would buy the property as a family home.
Mr M relied predominantly on the recent sale of Property H. He said that the land size of Property D was identical to Property H, which had sold for $500,000 on 20 July 2012. Property H is only 20 houses away from Property D.
Mr D accepted that the land sizes were virtually identical but said the houses on the two properties were vastly different. He said that the house at Property H had the original kitchen and bathroom and the ceilings were smoke stained. He said the house at Property D had been extended in the 1980s and offered a much higher standard of accommodation.
Mr M confirmed that the house at Property H was in original condition, but he said it was not dilapidated. It was a little larger than the house at Property D. Mr M said that the property at Property D was a development site, so the house only had value as a short term rental property while permits were being obtained.
Mr M said that the land value of Property H was $476,500 ($572 per square metre times 836 square metres) and the house was worth $23,500, making the total of $500,000 for which the property recently sold. Mr D said that the land value of Property H was $460,000 ($550 per square metre times 836 square metres) and the house was worth $40,000, making the total of $500,000 for which the property recently sold.
Both experts used the land values that they had calculated for Property H in calculating the value of Property D. Mr M said that the land at Property D was worth $478,000, ($572 per square metre times 836 square metres) and the house was worth $22,000, making a total of $500,000. Mr D said the land at Property D was worth $460,000 ($550 per square metre times 836 square metres) and the house was worth $90,000, making a total of $550,000.
I find it difficult to accept that the house and other improvements at Property D could be worth $90,000. I note in this regard that Mr M’s report records that the last council valuation, from 1 January 2010, said that the value of the improvements on the property at Property D was nil. There was no suggestion that anything had been done to the property since that time to increase the value of the improvements on the property. Mr M’s report also records that the Victorian Civil and Administrative Tribunal had determined that the site could be redeveloped, with a maximum of three units.
I accept that the house at Property D is significantly better than the house at Property H. However, I also accept Mr M’s evidence that the site is likely to be purchased for redevelopment. Consequently, the value of the existing house is confined to its potential as a short term rental property.
Overall, I prefer Mr M’s evidence in relation to Property D. Consequently, I find that Property D is worth $500,000.
c. Property W
Mr M valued Property W at $695,000. Mr D valued that property at $610,000. The house on the property was built in 2007. The land is 673 square metres. The house is 280 square metres. It has three bedrooms plus a study. The valuers agreed that there were no comparable, recent sales in the immediate area. The house backs on to [street omitted], which is a major road, with three lanes in each direction. It carries “constant”[1] truck traffic. The living areas of the house at Property W are at the back of the house, closest to [street omitted]. The house is also not far from the interchange between the [streets omitted].
[1] Transcript page 238 line 12.
A significant point of difference between Mr M and Mr D was how much traffic noise could be heard on the property. Mr M said in his report that he had discounted the land value per square metre because the property backs on to “the busily trafficked [street omitted]!” He did not specify the amount of the discount in his written report. He also said in oral evidence that the noise was not audible when he was inspecting the property, even though he had gone into the backyard. Mr D said that the noise was “very loud” to the point that he could not enjoy sitting outside, and it was “quite loud” inside the house with the doors and windows shut[2]. When pressed, Mr M said in oral evidence that his discount for noise was $25 per square metre.
[2] Transcript page 238 lines 42 to 46.
Mr M said the improvements on the property were worth $325,000, even though the house cost only $225,000 to build five years ago. Mr M valued the improvements at $1,160 per square metre and Mr D valued them at $900 per square metre. Mr D said that the cost to rebuild the house would be a maximum of $1,200 per square metre, but he discounted that to a value of $900 per square metre because the existing improvements are now five years old.
Mr M’s report relied on a number of properties that were in much quieter neighbourhoods, had houses of a very different character or were much smaller allotments. They were of little assistance.
Mr D relied on only one recent sale, being Property L. That property sold for $691,000 on 5 May 2012. It was a two storey house with four bedrooms and a study in a much more sought after part of [R] than Property W. Mr D said that Property L was a much more valuable property than Property W.
I accept that evidence. I do not see how Property W could be worth more than Property L. Additionally, I was not impressed by Mr M’s denial that he heard any traffic noise at Property W. That evidence beggars belief, in circumstances where the map clearly shows that Property W backs on to a major road with three lanes in each direction and which, by Mr M’s own admission, carries “constant” truck traffic. I was also not persuaded by Mr M’s evidence about the value of the improvements on the property. It does not seem to me to be realistic to value the improvements at their replacement cost, and not allow for the value of the actual improvements on the property to have declined with age.
In all of the circumstances, I prefer Mr D’s evidence about the value of Property W. Consequently, I accept that Property W is worth $610,000.
Conclusions on assets and liabilities
Therefore, the values of the parties’ assets and liabilities at the time of trial were as follows:
Assets
ANZ Bank
$219,000
Funds previously received by the husband
$20,000
Funds previously received by the wife
$20,000
Property W, [R]
$610,000
Property V, [R]
$472,500
Property D, [R]
$500,000
Property E
$285,000
Property B, [R]
$475,000
Taxi Licence number [1]
$460,000
Taxi Licence number [2]
(one third share)
$153,333
Taxi Licence in the name of [J] P/L [3]
$460,000
Commonwealth Bank Shares
(1,993 ordinary fully paid shares)
$106,645
Monies received by wife from the Property V mortgage post separation
$52,000
Mazda 6 motor vehicle in the name of [G] Pty Ltd
$21,000
Toyota Hi-Ace van in husband’s name
$8,500
Honda motorcycle in husband’s name
$10,000
Funds received from the sale of the Mitsubishi Magna motor vehicle by the husband
$2,000
Wife’s savings at separation
$15,000
Husband’s prepaid legal costs
$35,000
Wife’s prepaid legal costs
$32,000
Total non-superannuation assets
$3,956,978
LIABILITIES
Mortgage over Property W, [R]
$155,183
Mortgage over Property V, [R]
$65,054
Loan for Taxi Licence [1]
$39,924
Loan for Taxi Licence in the name of [J] P/L
$117,164
Mortgage over Property B, [R]
$521,094
Capital Gains Tax in relation to
Property E
$27,394
Total liabilities
$925,813
Total non superannuation assets less liabilities
$3,031,165
The net asset pool
The non-superannuation assets less liabilities amount to $3,031,165.
Financial resources of the parties
It was not suggested that the parties have any financial resources other than their assets and incomes.
STEP 2: Contributions
Initial contributions
Both parties brought substantial assets to the relationship. It was agreed that the husband brought to the relationship the following assets with the following values:
(a) Property A, [S] $160,000
(b) unit – [K] Queensland $85,000
(c) cash Westpac approximately $172,000
(d) cash Westpac approximately $27,000
(e) Magna $14,000
(f) Toyota Hiace Van $20,000
TOTAL: $478,000
In addition, the husband claimed to have a motorbike worth $13,000. He was not cross examined on that claim and the wife did not mention it in her closing submissions. In the circumstances, I accept the husband’s evidence that he had a motorbike worth $13,000 at the commencement of the relationship. That means that, in total, the husband brought assets of $491,000 to the relationship.
The parties agreed that the wife brought to the relationship the following assets with the following values:
(a)Property W $197,000
(b) Property V, [R] $134,000
(c) Property E $175,000
(d) Taxi [3] [J] $157,000
(e) Taxi [1] $309,000
(f) Taxi 1/3rd $89,666
(g) Shares $55,000
TOTAL: $1,116,666
Contributions during the marriage
The wife initially claimed that her father had lent her about $220,000 during the course of the relationship and that sum should be returned to him. However, eventually, the wife accepted that the sum of $220,000 should be treated as a contribution on her behalf. The husband accepted the figure of $220,000, but said that it should be discounted by 33%, in view of the other contributions made by or on behalf of the parties. The wife said that the aforementioned contributions should result in an assessment of contributions at 80:20 in her favour. However, it is necessary to consider all of the contributions of the parties before arriving at a percentage for contributions.
The husband worked as an [omitted] during the marriage. However, he took nine months off to build a new family home on the wife’s property at Property W. The husband’s father provided almost full time assistance with the building and various other tradesmen were used. The husband said that it cost the parties $225,000 to build, but they had been quoted $360,000 for the house to be constructed by a builder. The husband said that he saved the parties about $140,000 by building the house himself. The wife disputed that claim but did not explain why. I accept the husband’s evidence on this matter.
The husband, through his company, [G] Pty Ltd, undertook a number of other property developments in [S]. The wife conceded that these developments resulted in a profit of $287,000. The husband denied that the wife made any contribution to these developments. She claimed that her parents helped a lot, especially with the clean up. I accept that evidence. However, from the evidence overall, it seems to me that the husband was very substantially responsible for these developments.
The wife worked during the marriage as a [occupation omitted]. In the 2011 income year, she earned about $90,000 in that capacity. I understand her salary during the relationship to have been of about the same order. In addition, in the 2011 income year, the wife had income from her taxi licences, rental properties and shares of about $45,000. I understand that the wife’s income from those sources was about the same during the relationship.
The husband’s tax returns show that his taxable income for the year ended 30 June 2007 was $5,273, for the year ended 30 June 2008 was $45,189, for the year ended 30 June 2009 was $4,483 and for the year ended 30 June 2010 was $60,585. It seems that the husband’s income varied a lot depending on how much work he was doing on property developments. The husband claimed to have earned $70,000 to $90,000 per year prior to separation. However, his tax returns do not support that claim.
After [X] was born, [in] 2005, the wife took one year off work.
The husband had a period of depression from about January to April 2007. The husband was in receipt of insurance payments during that time.
The parties separated temporarily on [date omitted] 2005, when [X] was 11 days old. They reconciled after about nine months in 2006. When the wife returned to work, both sets of grandparents cared for [X] more or less equally. The parties again separated temporarily between November 2007 and April 2008.
Overall, the marriage lasted from 26 February 2005 until 10 May 2010, with separations totalling about 15 months. In other words, the parties were married and together for about four years.
Contributions post separation
Two weeks after separation, the husband suffered serious injuries in an assault. The husband was hit with a sledge hammer and a taser. He suffered fractures in his leg (tibia and fibula), his jaw (mandible) and a rib. The husband also had a subdural haematoma (in his brain). The husband had pre-existing damage to his cervical and lumbar spine.
The wife’s brother has been charged with the assault. The brother’s trial is scheduled for February 2013. He has denied the allegations.
As a result of his injuries, the husband had a reduced capacity for work. He was in receipt of Centrelink benefits for about seven or eight months until he was able to resume light duties. He has also used the sum of $113,000 that was in his business accounts at separation to discharge debts and meet living expenses. Initially, the wife argued that the sum of $113,000 should be added back. However, ultimately, the wife accepted that the husband had reasonably used that money to repay business debts and supplement his benefits for ordinary living expenses.
The husband said that, after returning to work in about February 2011, he began and has continued to earn about $20,000 to $25,000 per year as an [omitted]. That claim was not challenged in cross-examination so I accept it. The wife is continuing to earn about $135,000 per year from her salary and investments.
Post separation, the wife has provided the vast bulk of the care for [X] and has borne the vast bulk of the financial burden of caring for [X].
Contribution based entitlements
Leaving aside superannuation, which has been dealt with by consent, the husband said that the contribution based split should be 72:28 in the wife’s favour. The wife said that the contribution based split should be 85% in her favour (or less if the future factors brought her share up to 85%)
The wife’s initial contributions were worth $1,116,666 and the husband’s were worth $491,000. That totals $1,607,666. Therefore, the husband contributed about 30% of the pool at the commencement of the relationship and the wife contributed about 70%.
Additionally, during the relationship, the wife’s father contributed about $220,000. Adding that to the wife’s initial contributions means that the wife contributed about $1,336,666 out of $1,827,666, or about 73%.
Apart from the wife’s father’s gift, the contributions during the marriage were more or less equal. There was no clear argument to the contrary. The wife seems to have had a higher income from salary and investments than the husband, but the husband contributed his wages and contributed through his property development and building the family home in Property W.
Similarly, there was no clear argument about post-separation contributions. I would also assess them as being equal.
In a short relationship, as the parties in this case had, it is proper to give very considerable weight to initial contributions, and large gifts from family members. Nevertheless, the husband argued that the wife’s contributions should be discounted by 33%, because of the husband’s efforts, assisted by his father, in property development. However, the husband’s property development was to some extent at the expense of his usual earnings as an [omitted]. Overall, as indicated above, the contributions during the marriage were more or less equal.
In all of the circumstances of this case, I consider that the contributions should be assessed at 73:27 in the wife’s favour.
STEP 3: the s.79(4)(d), (e), (f) and (g) and the s.75(2) factors
The husband is 43 years old. The wife is also 43 years old.
The wife is in good health. The husband has a number of health issues. He provided evidence from a number of experts.
Dr G is a dentist. He provided a report dated 27 July 2012. It said, among other things:
Dr L, gave a comprehensive report on [the husband’s] condition. He had the evidence of the Neuroma pain/discomfort affecting the region below his lower lip and the right of the midline which when touched caused Parasthesia to radiate to the corresponding part of his lip due to the partial injury to the superficial nerves, with still some evidence of the sensations intact. In the gums just right to the midline, he had a couple of trigger points distributed regionally. These trigger points were connected to some other points in his neck area additionally contributing to his pain more.
…
Over this period of time as a result of the injury his Dental and psychological condition has gone worse. The teeth in the bottom midline have shifted and they don’t have any sensation. Due to the surgery in the jaw the top front teeth have lost some enamel from the necks of the teeth. The dental condition can get worse due to the past trauma and the overlying psychological issues.
Based on the past Treatment results from the various specialists and the existing condition I have recommended treatment plan to control/slow down the deterioration of his dental condition. He is showing absolute signs of deterioration of the Oral health and the symptoms of Nerve damage are taking toll on him.
Dr G was not cross-examined. I accept his evidence.
Dr R is a general practitioner. He gave two reports about the husband, the first dated 14 December 2010 and the second dated 14 July 2011.
Dr R said that the husband had both significant physical injuries and significant psychological injuries. In his second report, Dr R said:
[The husband] has reduced ability to work as a result of his assault injuries and also those which pre-existed. He has been left with permanent impairment which is likely only to deteriorate with the further onset of degenerative arthritis.
This leaves him with significant neck pain weakness restriction with movement, leg pains (“sciatica”). He is unable to lift, bend, carry or drive for long as a result of this. These problems will only worsen in time as degeneration problems worsen.
Dr R was cross-examined. He said that he had seen the husband once or twice a month since July 2011, except for a hiatus in January 2012. Dr R said that he predominantly dealt with the husband’s physical problems but was also his treating doctor for depression. Dr R said that he last gave a referral for the husband to see a psychologist in December 2010. Dr R said that he thought the husband was still seeing a psychologist. However, if he was not, Dr R thought that would be because the husband did not find a benefit in continuing therapy of that sort. Dr R said everyone tries to do their best but treating professionals are not gods.
Dr R also said that the husband suffers chronic pain, for which
Dr R referred him to a pain specialist. However, Dr R did not think that any intervention by such a specialist was likely to be successful.
Dr R said that the husband had been on half a tablet a day of Avanza, an anti-depressant, from May to December 2011 but then went on to a full tablet. Dr R said that was a medium dose.
I accept Dr R’s evidence. There was no submission to the contrary in closing submissions. There was no challenge to Dr R’s basic evidence that the husband has a reduced ability to work, which is likely to worsen with time. The main attack on Dr R’s evidence concerned the husband not attending a psychologist for 12 months. However, Dr R explained that as being the result of the husband gaining little benefit from that type of therapy.
The husband relied on a report dated 11 July 2011 prepared by Mr H, a psychologist. Mr H said:
With his physical and emotional disablement, it is most likely that he will never be able to resume full-time duties in his trade as an [omitted], and will have to seek an alternative that will most likely involve re-education and re-training for low demand physical work ... [h]is anxiety about his future capacity to provide adequately for himself remains quite high.
Mr H was cross-examined. He conceded that he had no medical expertise. He said that his conclusion that the husband will never be able to resume full time work as an [omitted] was based on both his physical and psychological injuries, even though Mr H had no expertise in relation to the husband’s physical injuries. Mr H said that he relied on the medical evidence to reach his conclusions. He said that the husband’s psychological injuries alone would not prevent him from working, but the combination of his physical and psychological injuries did reduce his working capacity.
Mr H said that he last saw the husband in August 2011. At that stage, the husband had exhausted the counselling services available under the victims of crime program. Mr H conceded that the husband could have had further counselling sessions under a mental health plan prepared by his general practitioner. However, Mr H thought that the husband’s attendance on a pain management specialist, and the various other medical and psychological interventions he had undergone had perhaps led the husband to feel that he had done enough.
Mr H said that he had provided the husband with a relaxation program on compact disc and advice about exposure therapy and positive thinking. Mr H thought that he would have been more optimistic about the husband’s ability to return to full-time work if the husband had attended upon a psychologist specifically about returning to work.
In re-examination, Mr H was referred to the unchallenged evidence of Dr R quoted above. Mr H said that, in view of that evidence, the husband might be able to pursue some alternative employment, which might not generate as much income but which might improve his morale. However, Mr H said this would be “a very difficult journey … from a psychological viewpoint.”[3]
[3] Transcript page 87 lines 43 to 44.
The husband also relied on two reports by Dr S, a psychiatrist. Dr S was cross examined. Dr S said in his report dated 9 October 2011:
22.Mr Rolland stated that he had ongoing neuropathic pain in the area under his lip and described excessively sensitive sensation (hyperalgesia) and an unpleasant and unusual pain (allodynia). He reported that he had had the surgical plates removed which had been inserted by the maxillofacial surgeon but the pain had persisted. He had consulted an oral medicine specialist, Dr T, and had been referred to a pain specialist Dr L. He described that he also had a throbbing pain in his leg which was sensitive to weather fluctuations. He had seen a surgeon, Mr B, at the [omitted] Hospital for orthopaedic follow-up.
…
24.Since the assault he reported limited happiness in his life and did not look forward to the future. He reported that generally his mood was stable but when in pain his mood deteriorated. He described frequent tearfulness. He had consulted a psychologist, Mr H and continued to see him. He reported that he had become socially avoidant and anxious as he had nothing to say apart from to complain about his pain. He felt that he was “not up to talking” or meeting people.
…
46.Mr Rolland was seriously assaulted in May 2010, allegedly by his wife’s brother and another man. He sustained significant injuries including a period of unconsciousness, and fractured ribs leg, and jaw requiring surgical intervention. He has ongoing psychological consequences from this assault and his ability to work is currently and likely permanently impaired. He would satisfy a diagnosis of post-traumatic stress disorder (PTSD) which is mild-moderate in severity.
47.He would also fulfil a diagnosis of adjustment disorder with depressed and anxious mood, and this is attributable to the assault and its consequences. Mr Rolland has ongoing psychological difficulties which I would categorize as moderate to severe; and an impairment of his work capacity which is consistent with this, as well as ongoing pain, and is significant. While it is not alleged that his ex-wife was involved in organizing this assault, it is concerning that she is described as having told the supervisor of access to the children that he was the instigator of the assault.
…
51.He should remain under medical care and will likely benefit from ongoing psychological interventions to assist him in coming to terms with chronic pain and psychological sequelae of his assault.
In his report dated 13 December 2011, Dr S said:
17.Mr Rolland is mildly depressed but significantly anxious. His anxiety is manifest in poor self-esteem and indecisiveness. He struggles to assert himself and is worried about upsetting others. These issues seem to be causally associated with having been assaulted and reflect that a traumatic event can result in longstanding distress manifest in multiple domains.
18.The diagnoses remain unchanged; post traumatic stress disorder (PTSD), mild-moderate in severity; and adjustment disorder with depressed and anxious mood.
19.He is on appropriate treatment but may warrant higher doses of medication to reduce his anxiety symptoms.
Mr Rolland would also benefit from psychological support particularly focussed on his return to work.
Under cross examination, Dr S was asked questions that were, it seems, directed to parenting issues. There was no challenge to any aspect of
Dr S’s evidence that is set out above. There were no closing submissions in relation to Dr S’s evidence. Consequently, I accept Dr S’s evidence as set out above.
The husband is presently earning about $20,000 to $25,000 per year. He conceded that, with retraining, he may be able to earn more in the future. He said that he would be able to look into options for retraining once the stress of this case is over.
The wife is earning about $135,000 per year from salary and investments. If she retains most of the assets that produce income for her, she will presumably retain approximately the same level of income in the future.
The property of the husband and wife is to be determined in this judgment. It was not suggested that they have financial resources other than their income and assets. As discussed above, the wife has the physical and mental capacity to earn a substantial income. The husband’s physical and mental capacity to earn an income has been seriously compromised by the assault on him.
The parents have agreed to orders whereby they will share parental responsibility for [X], he will live with his mother and he will spend four nights a fortnight with his father and a substantial amount of time with his father during school holidays, building up to half school holidays next year.
It was not suggested that either party has any particular commitments that are necessary to enable the party to support himself or herself or a child or other person that he or she has a duty to maintain, or any responsibility to support anyone other than [X].
Neither party appears to be presently eligible for a pension, allowance or other benefit.
The standard of living that would be reasonable for the parties in all of the circumstances of this case would be towards the higher end of a moderate standard.
A larger share of the property pool in this case could be expected to assist the husband to undertake retraining to assist him to obtain an adequate income.
It was not suggested that there are any relevant creditors in this case.
Except as discussed above in relation to contributions, it was not suggested that either party has contributed to the income, earning capacity, property or financial resources of the other party. More particularly, it was not suggested that the wife was responsible in any way for the assault on the husband which has seriously compromised his earning capacity.
The marriage was short. It was not suggested that it has affected the earning capacity of either party.
Both parties wish to continue their roles as a parent. The wife intends to continue working full time. The husband intends to work as much as he is able.
It was not suggested that either party is cohabiting with another person.
Apart from the orders to be made in this proceeding, it was not suggested that there are any other relevant orders.
The husband conceded that he had not paid any child support for [X] except for $1,500, being one term’s school fees, and some money for uniforms. The husband accepted that the bulk of the cost of caring for [X] in the future will fall to the wife.
It was not suggested that there is any relevant financial agreement to which the husband or wife is a party.
There are no other relevant facts or circumstances. However, I would mention at this point that a large part of the wife’s cross-examination of the husband was directed to numerous voice messages that the husband left on the wife’s brother’s telephone shortly prior to the assault on the husband. The messages were obscene and abusive. The thrust of that part of the cross-examination seemed to be that the husband had brought the assault on himself. However, there were no closing submissions to that effect. For present purposes, it is sufficient to note that the husband does in fact have a diminished earning capacity because of the assault.
The husband submitted that it was appropriate that there be a 10% adjustment in the husband’s favour for future factors, predominantly, the disparity in earning capacity. The wife submitted that, absent the husband’s health issues, a 10% adjustment in her favour would be made for her greater share of the financial cost of the care of [X]. However, in view of the husband’s health issues, the wife submitted that a 5% adjustment in her favour should be made.
I accept that, if the earning capacity of each party was more or less comparable, there would be a 10% adjustment in favour of the wife for her greater share of the financial burden of caring for [X]. It seems unlikely that the husband will pay very much in the future by way of child support.
On the other hand, the huge disparity in the parties’ earning capacity, which has been exacerbated by the very serious assault on the husband, and the serious, long-term physical and psychological consequences of the assault, requires a substantial adjustment in the husband’s favour.
In my view, taking into account all the relevant matters, the net result of the significant factors going each way is that there should be an adjustment in favour of the husband of 3%.
STEP 4: What order is just and equitable
The husband seeks a property settlement of 60% to 65% in the wife’s favour on non-superannuation assets. The wife argued for an 85:15 split in her favour of non-superannuation assets. However, in closing submissions, under step four, the wife said that it would be just and equitable to order an 80:20 split.
The analysis set out above would result in a 70:30 split in the wife’s favour. I consider such an outcome, in all of the circumstances of this case, to be just and equitable. In particular, that outcome allows for the wife’s greater contributions and her ongoing greater financial support of [X], as well as the husband’s lesser earning capacity, particularly as a result of the assault on him.
The total asset pool is $3,031,165. Thirty percent of that is $909,349.50. That is how much the husband should receive in total.
There was agreement on the majority of the assets each party would retain. Under that agreement, the husband will retain:
(f)Property D: $500,000;
(g)Honda motorcycle: $10,000;
(h)Toyota Hi-Ace van: $8,500;
(i)proceeds of sale of Mitsubishi Magna motor vehicle: $2,000;
(j)husband’s prepaid legal costs: $35,000;
(k)funds already received: $20,000.
That totals $575,500. Consequently, the husband should receive an additional $333,849.50. There is $219,000 held on behalf of the parties in the ANZ Bank. All of that money should be released to the husband. That leaves a further $114,849.50 that the wife will need to pay the husband. The wife should retain the remaining assets. There will be orders accordingly.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of Riley FM
Date: 19 October 2012
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