S and J - [2003] FMCAfam 46

FEDERAL MAGISTRATES COURT OF AUSTRALIA

S & J

[2003] FMCAfam 46

FAMILY LAW – Property application – need to consider when assessing parties’ entitlement either a global approach or asset by asset approach – short marriage – separate finances – asset by asset approach adopted.

Applicant:

L S

Respondent:

C J J

File No:

MLM 6579/2002

Delivered on:

25 February 2003

Delivered at:

Melbourne

Hearing date:

13 February 2003

Judgment of:

Connolly FM

REPRESENTATION

Counsel for the Applicant:

Mr Nicholson

Solicitors for the Applicant:

Kenna Croxford & Co

Counsel for the Respondent:

Mr Pinner

Solicitors for the Respondent:

David Stagg Tonkin & Co

ORDERS

That the Wife pay to the Husband the sum of $40,500.00 within 60 days of the date hereof.
That in the event that the whole of the payment has not been made in accordance with paragraph (1) herein:
(a)the real property (4 P Street, C) be forthwith sold altogether out of Court (“the sale”); and
upon completion of the sale, the proceeds of the sale be applied:
(b)first to pay all costs, commissions and expenses of the sale;
(c)secondly to discharge the mortgage and any other encumbrance affecting the real property;
(d)thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 10.1 per centum per annum adjusted monthly from the date to the Husband;
(e)fourthly the balance to the Wife.
That there be liberty to apply with respect to the terms and conditions of the sale.
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 furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the Wife);
(b)each party forgo any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named thereon;
(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; and
That otherwise all extant applications be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLM 6579 of 2002

L S

Applicant

And

C J J

Respondent

REASONS FOR JUDGMENT

The proceedings

These are competing property applications in which each party seeks orders to the effect that they retain all property and superannuation entitlements in their respective possessions save that the wife should pay the husband a specified sum of money. The wife’s application filed 18 July 2002 sought an order that she pay the husband $60,500.00 and the husband’s response filed 31 January 2003 sought an order in the sum of $150,000.00. In final addresses the parties through their counsel had amended their applications to seek payments of $20,000.00 and $100,000.00 respectively.

The documents

The wife’s application was supported by her Order 30 Affidavit and two statements of financial circumstances. The husband’s response was supported by an affidavit and a statement of financial circumstances. In addition each party gave viva voce evidence.

The background

The husband is 47 years of age and is a self employed construction site manager. In his statement of financial circumstances sworn 19 December 2002 he discloses his total income as $679.00 per week made up of $676.00 per week salary and $3.00 per week from share dividends ($35,308.00 per annum). He lives in a defacto relationship with J M in her home at 2 L Street, W. She has two children one of whom, K aged 20 lives with them. Ms M earns approximately $46,000 per annum. The husband has two children from a former relationship. He says he pays child support for R aged 18 in the sum of $43.00 per week and provides some assistance for M aged 20 who attends University. Both girls reside with their mother.
The wife is also 47 years old and she resides at 6 P Street, C with her two children of an earlier marriage, K (22 years old) and L (19 years old). K is now seeking employment and L has just completed her first year of a teaching course. The wife is a Lecturer at L T U and currently earns $66,000.00 per annum.
The parties first co-habitated on 12 March 1994, married on 1 April 1995 and finally separated on 25 December 1999. There are no children of their relationship. At the commencement of the relationship the wife was the registered proprietor of the property at

6 P Street, C. She obtained the property as part of the settlement with her former husband. It was valued at $155,000.00 and was subject to a mortgage of approximately $34,000.00. She also had an unencumbered Mazda motor vehicle and a house full of furniture. She was employed in the same position she now holds. The husband had a motor vehicle and a caravan. At the commencement of the marriage the husband was employed as a building site manager. Each party had superannuation entitlements, although the wife’s entitlement was far in excess of that of the husband.
During the marriage the wife continued in the same employment as did the husband. Although in or about 1996 he formed his own company and became self employed. The wife’s children resided with the parties and had contact with their father who paid modest child support for them. The husband’s children resided with their mother and had contact with the husband. He paid child support for them. The husband contributed a weekly amount to the wife and she was responsible for payment of the mortgage and all items of household expenditure. The amount of the husband’s weekly contribution was in issue. The husband carried out certain works to the property at P Street, C including renovations to the bathroom, kitchen, lounge, dining room and study as well as improvements to the garden. The wife’s motor vehicle was updated during the course of the marriage as was the husband’s car and caravan. The parties enjoyed some holidays together although the husband also had holidays on his own and with his children. The wife was primarily responsible for the running of the household including the cooking, cleaning and shopping for she and the husband as well as the children.
Since separation the wife has also formed a new relationship but she and her partner have no plans to live together. She has continued to care for her own children and has ongoing contact with the husband’s two children. The husband has no ongoing relationship with the wife’s children. The wife has also carried out further renovations and improvements to the P Street property.

The law

The approach to the determination of an application under section 79 of the Family Law Act 1975 is well established by authority. It involves, firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing; secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c); thirdly, evaluating the matters contained in section 75(2) insofar as they are relevant; and, fourthly, in determining what order the court should make under section 79, the court must also be satisfied that it is just and equitable to do so.
One matter that is of significance in these proceedings is whether I should assess the parties’ entitlements using a global approach or an asset by asset approach. The global approach requires an adjustment on the basis of an overall proportion of the global view of the assets. Whereas the asset by asset approach involves a determination on individual items of property. The Full Court indicated in McMahon v McMahon (1995) FLC 92-606 at P 82,043:
In our view, the particular circumstances of this case made an asset by asset approach preferable to a global approach. 51. The short duration of and the unhappy nature of the marriage, coupled with the parties' strict division of assets and their method of dealing with them lent itself to an asset by asset approach, particularly where they had separately identified another group of assets as joint. 52. We are conscious of the remarks of Mason CJ and Deane J in Norbis v Norbis (1986) 161 CLR 513 at 523; (1986) FLC 91-712 at 75,168, where their Honours indicated that in most cases the global approach is more convenient.
This approach was followed by Federal Magistrate Ryan in the matter of Hewgill and Wilkinson (2001) FMCA 57.

Conclusions and findings

There was an agreed value of the parties assets as follows:
a)The property in the wife’s name at 6 P Street, C $405,000.00 of which $30,000.00 the parties conceded was attributable to the value of the renovations completed by then during their co-habitation.
b)The wife’s superannuation entitlement of $252,000.00.
c)The husband’s superannuation entitlement of $8,000.00.
Total pool $665,000.00
In addition the wife had a motor vehicle and furniture replacing that which she had bought into the marriage and the husband a car and caravan. They otherwise had some modest amounts of saving and personal items.
The wife says that throughout the marriage she and the husband kept their finances separate. She details the amounts he paid on a weekly basis in paragraph 15 of her affidavit. The husband disagreed with the details of those payments but not to any significant effect. Indeed he says in paragraph 11 of his affidavit that he made a total payment throughout the cohabitation of $31,800.00. In cross-examination he agreed this averaged out at about $108.00 per week. While he said in cross examination that he believed it would only have cost him $40.00 or $50.00 per week for the wife to provide food for him and there would have been plenty left over to go toward the mortgage repayment. I simply do not accept that the sum of $108.00 per week would cover the wife’s costs of providing food, accommodation, electricity, gas, phone and other household expenses including health care for the husband and his two children when on contact. The husband’s case, at its best, was that in addition to that financial contribution he purchased a few take-away meals and made a financial contribution to the family holiday. Although I note that the number of family holidays is minimal compared with the holidays the husband enjoyed by himself or with his daughters.
The other financial contribution made by the husband is toward the renovations. In summary the husband’s evidence was that he and the wife shared equally the cost of the renovations and improvements and he provided the expertise and the heavy labour. He conceded that the wife assisted him. The total financial benefit of those improvements and renovations is as I have indicated, an agreed amount of $30,000.00.
The husband’s evidence in his affidavit, is that he assisted in the domestic chores and the role of home-maker and parent. Again he conceded in cross-examination that the wife was primarily responsible for these tasks. I have also formed the opinion that the husband’s claims that he assisted in the parenting of the wife’s children was exaggerated. The wife said that in effect he had little involvement with them and her evidence was more consistent with the fact that he no longer has any contact with those girls whereas the wife has continuing contact with his children.
The husband conceded in cross-examination that the parties kept their finances separate. However, his case was conducted on the basis that his current income was nearly half that of the wife’s and that this was an accurate reflection of what had occurred throughout the marriage. He was given the opportunity by his counsel to correct any inaccuracies in his affidavit or statement of financial circumstances and he did not take it. Indeed when it was put to him by Mr Nicholson that his income had been much the same as his wife’s during the marriage he denied it. He also denied that he had received other benefits that he had not disclosed and stated that he had no other disposable income.
It was only when he was confronted with irrefutable documentary records of income for the years 1996, 1997 and 2001 that he was prepared to make any concessions. The total income for those years was $74,000.00 in 1996, $52,000.00 in 1997 and $70,400.00 in 2001.

I draw the conclusion that he has been deliberately deceitful with respect to these matters.
I am satisfied that his income in the past has been at least equal to that of the wife, if not greater. I am suspicious that the situation for the year ending 30 June 2002 is likely to have been a very good one, given that the husband had nearly 8 months to have his accountant prepare such documents and has elected not to do so.
What the husband otherwise did with the balance of his income is not clear, but what is undisputed is that he did not share it with his wife.

I am further satisfied that there is nothing to suggest that he cannot continue to earn at that level.
This is a short marriage in which the parties have kept their finances separate. The husband has made minimal contributions to his and his daughters’ upkeep, although he has provided a clearly defined contribution to one asset of the parties by virtue of the renovations to the P Street property. I am satisfied that it is therefore appropriate to adopt the asset by asset approach rather than a global approach.
While the wife has a significantly greater entitlement to superannuation than the husband, in the circumstances of this case I am satisfied that there has been no contribution whatsoever to it by the husband. Given the financial support that the wife provided to the husband there may be some argument that she has contributed to the husband’s entitlement but given the modest nature of his superannuation benefit, I do not propose to make any adjustments to the parties’ property on that basis.
In so far as the section 75(2) factors are concerned I am satisfied that there is nothing to distinguish the parties. As I have said they have a very similar income and earning capacity. They are both aged 47 and both in good health. The wife has the security of a greater superannuation entitlement but she has also the ongoing responsibility for an adult child who resides with her, whereas the husband is again being provided with accommodation by his current partner who earns $46,000.00 per annum. He makes a very modest contribution to Ms M towards his living expenses by way of payments of $105.00 per week.
Counsel for the wife says that I ought to contain any adjustment on the P Street property to that $30,000.00 which is attributable to the renovations. The husband has clearly made a contribution to the property by way of the renovations. However, I am of the view that that approach would ignore the husband’s modest role in assisting with the domestic chores, maintenance of the property and the children.
I must also bear in mind the wife’s far greater initial contribution in bringing the property into the marriage and the post separation contributions to the renovations of it. (See Peirce and Peirce (1999) FLC 92-844 where the Full Court held that the trial judge failed to attach sufficient weight to the husband’s greater initial contributions and his post separation contributions.) I am satisfied in all the circumstances that the contributions of the parties to the P Street property are 90% in favour of the wife and 10% in favour of the husband.
Given what I have already said about the section 75(2) factors I am satisfied that it is not appropriate to make any further adjustment. Accordingly I propose to order that the wife pay to the husband the sum of $40,500.00 within 60 days of the date hereof and I am satisfied that in balancing all of the relevant factors that these orders reflect a just and equitable outcome for the parties in the circumstances of this case.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Connolly FM

Associate:

Date: 25 February 2003