S and P

[2007] FCWA 149

JURISDICTION: FAMILY COURT OF WESTERN AUSTRALIA

ACT:FAMILY COURT ACT 1997

LOCATION:[REGIONAL CENTRE]

CITATION:S and P [2007] FCWA 149

CORAM:THACKRAY CJ

HEARD:10 - 11 OCTOBER 2007

DELIVERED: 13 DECEMBER 2007

FILE NO/S:PT 6577 of 2006

BETWEEN: S

Applicant/Wife

AND

P
Respondent/Husband

Catchwords:

PROPERTY SETTLEMENT - De Facto relationship - 21 year relationship - greater contributions by de facto husband - disparity in superannuation and incomes - adjustment to de facto wife

Legislation:

Family Court Act 1997, s 205ZD
Family Court Act 1997, s 205ZG

Category: Not Reportable

Representation:

Counsel:

Applicant: Ms G Braddock SC

Respondent: Mr F Castiglione QC

Solicitors:

Applicant: Joe Scurria & Associates

Respondent: Slee Anderson Pidgeon

Case(s) referred to in judgment(s):

Chorn and Hopkins (2004) FLC 93-204

Gould and Gould (1996) FLC 92-657

Mallet v Mallet (1984) 156 CLR 605

Robb and Robb (1995) FLC 92-555

1I am required to determine a financial dispute arising out of the breakdown of the lengthy de facto marriage between [Ms S] and [Mr P].

Orders sought

2The orders sought by [Ms S] were contained in a Minute tendered at the trial. She proposes that each party keep the assets in their possession (apart from some minor items). She wants [Mr P] to pay her $446,000 within 60 days. If he is unable to afford that much, she proposes that he pay her $211,000 and transfer to her the property he owns [in a country town]. In addition, she seeks spousal maintenance of $500 per week from the date of separation until she receives her property settlement, less an amount of $4,600 already paid. (In her oral evidence, [Ms S] said she was really only seeking $200 per week).

3The orders sought by [Mr P] were set out in a Minute in his Papers for the Judge. He also seeks that the parties each retain the assets in their possession (save for some minor items). He is prepared to pay [Ms S] $120,000 by way of property settlement. He is opposed to paying any more maintenance and, in fact, wants [Ms S] to repay all the maintenance he has paid to date.

The parties and their relationship

4[Ms S] is 59 years of age and currently works [in a factory]. She has two adult children from a previous marriage.

5[Mr P] is 53 years of age and works as a [fitter]. He has no children.

6[Ms S] and [Mr P] commenced living together in November 1985, following the breakdown of [Ms S]’s marriage. [Ms S]’s teenage daughter lived with the parties for a few years before obtaining work. Her son initially lived with his father, but later came to stay with the parties.

7It is common ground that the parties lived in a de facto marriage relationship within the meaning of Part 5A of the Family Court Act 1997 (“the Act”). The relationship ended when [Ms S] left home in August 2006, after a few months living separately under the same roof.

Property settlement approach

8I am required to follow a four-step process in dealing with an application for property settlement pursuant to the Act. These are:

•identify and value the assets and liabilities of the parties;

•assess the parties’ contributions to the assets;

•assess a range of factors set out in s 205ZG(4)(d) to (g) of the Act; and

•consider whether the order proposed is just and equitable.

The asset pool

9I find the assets and liabilities at the date of trial to be as set out below:

DESCRIPTION	[MR P]	[MS S]
Assets	$	$
[ house]	235,000
[adjoining property]	235,000
[Farm]	330,000
Farm machinery/equipment	26,542
Livestock	3,226
Household contents	7,745	2,249
[Motor Vehicle]	31,500
[Motor Vehicle]	6,500
Proceeds of sale [of her property]	287,000
[A] shares	7,237
[MLCM] Unit Trust	14,478
Commonwealth Bank account	1,619
Home Building Society shares	4,088
StateWest account	2,421
BankWest account	1,798
AMP account	6,683
Paid legal costs added back	22,367
Total	914,714	310,739

Liabilities
Commonwealth Bank line of credit	97,100
Commonwealth Bank investment loan	100,100
Capital gains tax liability [her property]	41,592
Macquarie Leasing	45,706
Total Liabilities	242,906	41,592
Net Assets	671,808	269,147

10The parties had the following superannuation entitlements at the time of trial.

DESCRIPTION	[MR P]	[MS S]
AMP	144,210	85,151
AXA	1,547
C I Superannuation Board	210,236
TOTAL	354,446	86,698

11Most of the items in the tables above were agreed. The only matters requiring comment are these:

Campervan

12It was common ground that [Mr P] has a campervan worth $3,500. The van is registered in the name of [Mr P]’s late father, who died many years ago. The father’s estate has never been wound up, but [Mr P] readily admits he has had the use of the campervan and no other person is making any claim to it. [Ms S] submitted that in reality the van is therefore [Mr P]’s property. This may be so, but as [Ms S] has made no contribution of any kind towards the van, I have determined that it is not appropriate to include it in the pool.

Proceeds of sale of ute

13[Mr P] previously owned a [utility] which was sold shortly prior to [Ms S] leaving home. [Ms S] says this should be added back into the pool. [Mr P] maintains the proceeds of sale were applied for the joint benefit of the parties, save for some legal fees he has paid, which have been added back. I accept [Mr P]’s evidence in relation to the disbursement of the proceeds of sale of the [utility]. I can see no basis upon which it ought to be added back into the pool as the proceeds are already reflected, one way or another, in the table above.

Home Building Society shares and StateWest Credit Society account

14[Ms S] claimed in her Papers for the Judge that the funds held in a StateWest Credit Society account in her name and shares in her name in Home Building Society were held on trust for her mother.

15During the course of the trial, [Ms S] conceded she had been mistaken in relation to the Home Building Society shares and accepted that these were her property. She continued to maintain, however, that the StateWest account funds were her mother’s. She said the account was originally hers but her mother had taken it over some years ago. She did acknowledge that the only regular withdrawals from this account were for her own HBF premiums. Whilst [Ms S]’s oral evidence about the StateWest account was given with apparent candour, I was not persuaded I should treat the funds as being held on trust for her mother. For reasons explained later, I consider [Ms S] has not always been frank in these proceedings. In view of the doubt created concerning her credibility, I drew an adverse inference as a result of [Ms S]’s unexplained failure to call her mother to give evidence to corroborate her claim that the funds are held on trust. In any event, even on [Ms S]’s own evidence, some of the funds deposited into the account were her own funds and there was inadequate evidence to assist me to differentiate between the portion of the funds that may have [Ms S]’s and the portion that may have been held for her mother.

16[Mr P]’s counsel submitted that the StateWest account should be included in the pool at an estimated figure of $5,000. This was the maximum amount ever invested in the account ($5,056 in April 2007). The account statement provided at trial (Exhibit 2) covered the period only up to 18 June 2007, at which time there was $2,421 in the account. [Ms S]’s counsel handed up a document (MFI “C”) suggesting that the balance had further reduced to $1,512, but this figure was not properly proven in evidence. I gave consideration to including the account at the figure of $5,056, as it seems from analysis of Exhibit 2 that the funds only began to dwindle around the time [Ms S] acquired a new home with her brother in April 2007, which property was not included in the pool. I note, for example, that $1,000 was withdrawn from the account just a few days before settlement of the purchase of the [new] property. However, [Ms S] was not challenged about the way in which these funds had been depleted and I have decided to include the amount in the account as at the last entry shown on Exhibit 2, namely, $2,421.

Legal costs added back

17[Mr P] submitted that only $16,536 of his paid legal fees of $22,367 should be added back into the pool. He said that $5,830 of his costs came from income earned after the date of separation and that this portion ought not be added back. (Chorn and Hopkins (2004) FLC 93-204). I did not consider there was adequate evidence to establish how [Mr P] had funded his legal fees. In coming to my assessment on contributions, I will take into account the income that [Mr P] has earned following the breakdown of the relationship. In these circumstances, I consider it appropriate to add back all of the paid legal costs.

18[Ms S] has not as yet been able to pay any of her legal costs. She has, of course, incurred a significant liability to her solicitors, but it is not appropriate that this debt be taken into account. Questions of costs can be considered once judgment is delivered.

Long service leave

19I have not included [Mr P]’s accumulated leave entitlements in the asset pool, as they are not an asset. As at March 2007, [Mr P] had unused annual leave to a value of about $12,000 and accumulated long service leave of about $29,000. [Mr P] said in his affidavit that he intended to take his leave entitlements as holidays at some time in the future. [Mr P] has tended to take his annual leave entitlements over the last ten years, but has taken only 38 days long service leave in the last 12 years. It is at least an option for [Mr P] to cash his leave entitlements at the time he retires and to that extent I consider it appropriate to take his unused leave entitlements into account as a financial resource: Gould and Gould (1996) FLC 92-657.

Superannuation

20The figures in the superannuation table are gross figures. Under current legislation, [Mr P] would pay no tax on receipt of his superannuation if he retired after attaining the age of 60 years. If he received his superannuation prior to attaining that age, he would have to pay 16.5% tax on the taxable amount in excess of $140,000. The [CI] Superannuation Board did not provide [Mr P] with a breakdown of the taxable/non-taxable portions of his entitlements, but for reasons explained in the affidavit of his accountant, I accept that the bulk, if not all, of those entitlements will be taxable. I therefore find that if [Mr P] were to access his superannuation prior to attaining the age of 60 years he would incur a tax liability in the region of $35,000.

Contributions

21[Ms S] submitted that contributions should be assessed as having been made in equal proportions. [Mr P] submitted that contributions should be assessed 65:35 in his favour.

22Before commencing examination of the various contributions, it is appropriate to record that it is common ground that [Mr P] and [Ms S] never acquired any property together during their 21 year relationship. Save for one Christmas Club account, which was commenced towards the end of the relationship, they never even had a joint bank account. Each regarded the property held in their name as being entirely their own and each dealt with their separate property as they saw fit. I will later in these reasons discuss the submission made on behalf of [Mr P] that the “separateness” of the parties’ financial affairs is in itself a matter to take into account in determining what might be a just and equitable division.

23In the course of his closing address, [Mr P]’s counsel suggested that an “asset-by-asset” approach to the assessment of contributions may be appropriate. He conceded, however, that it would also be open to me to adopt a “global” approach. Whilst it is true that the financial contributions to the parties’ individual property were made almost entirely by the party in whose name the property was held, I nevertheless consider it appropriate to adopt a global approach. In my view, this is the most appropriate way to ensure that the non-financial contributions in this relationship are not overlooked and given appropriate weight.

Initial contributions

24At the commencement of cohabitation, [Mr P] had an interest in two pieces of real estate in [the town], [at two different addresses]. [Mr P] had only a half interest in [one property] (which adjoined the home of [Mr P]’s parents, where [Mr P] was living at the commencement of cohabitation).

25[Mr P] had purchased a small house in [the town] at a cost of $29,500 in 1982 (i.e. about three years prior to the commencement of cohabitation). He had borrowed $22,000 from the bank. After purchasing the property, [Mr P] paid for some (unspecified) renovations. The parties commenced their relationship within a few weeks of [Ms S] taking up residence in the home as [Mr P]’s tenant. [Mr P] sold [the first house] in October 1988 (about three years after commencement of cohabitation) for $44,000. There was no evidence of the value of the [the first property] at the commencement of cohabitation. Nor was there any evidence of the amount outstanding on the mortgage at the commencement of cohabitation or at the time the property was sold. The equity in the property at the time of purchase was $7,500 and it would be reasonable to infer that this had increased by at least a few thousand dollars by the time the parties commenced cohabitation.

26[Mr P] had purchased [the next house] jointly with his father. It cost $36,500 in December 1984, which was about a year prior to the commencement of cohabitation. [Mr P] borrowed $18,000 from the bank by way of personal loan to assist him to complete the purchase – i.e. almost all of his contribution to the property was borrowed. Although [Mr P] originally had only a half interest in the property, by the time of trial he owned the entire property. There was no reference in any of the evidence as to how he became the owner of his father’s half share in the property, but there was no suggestion he paid anything to his father for his interest in the property. I therefore consider it appropriate to proceed on the basis that [Mr P] contributed the entire property and that the equity at the time of commencement of cohabitation would have been a little in excess of $18,500. The house was let to tenants and [Mr P] continued to live with his parents until he and [Ms S] started living together in the [first] property.

27Apart from his interest in the two pieces of real estate, at commencement of cohabitation [Mr P] owned the furniture in the [first] property, a utility and [another] vehicle. There was no evidence of the value of any of these items. [Mr P] also says he had a term deposit but he did not give any evidence of how much money was in the term deposit. Even if [Mr P] had a term deposit at the time (about which I was not persuaded in any event), I could not take it into account when no attempt was made to quantify the amount involved.

28At the commencement of cohabitation, [Ms S] had a [small motor vehicle] of unspecified value, free of debt. Over the next few years, she pursued a claim for property settlement against her former husband, the result of which was she received a payment of $34,000. She had legal fees to meet from her settlement. She said she was unable to recall the amount but [Mr P] gave evidence that the fees were in the region of $14,000. During the course of closing addresses, [Ms S]’s counsel indicated that her understanding was that $34,000 was the net figure received by [Ms S] after payment of her legal costs. Having considered the contents of paragraphs 17 and 18 of [Ms S]’s trial affidavit, I find that the legal fees were, in fact, deducted from the amount of approximately $34,000 received by [Ms S]. I therefore find that she received around $20,000 net. Although the funds were not received until some time into the relationship, [Ms S]’s entitlement to a settlement from her former husband existed at the time of commencement of cohabitation. I therefore propose to treat the ultimate net payment as if it were an initial contribution by [Ms S]. [Mr P]’s counsel agreed in his closing address that this was the appropriate way to proceed.

29Given that [Mr P] had equity in excess of $18,500 in [the second property] and equity in [the first property] exceeding $7,500, I find that he brought into the relationship more assets than [Ms S] did. It is not possible to quantify precisely the differential in contributions, but I find it exceeded $6,000.

Financial contributions during and after relationship

30[Mr P] was employed as a [fitter] on a full-time basis with [a major company] at the commencement of cohabitation. He was earning $35,000 per year when he first commenced work there in about 1981. He has remained working there ever since, always earning an above average income. In 2005/06 [Mr P] earned in excess of $91,000.

31[Ms S] was working full-time [at the local hospital] at the commencement of cohabitation. She remained there in that capacity until the middle of 2002 when her position became redundant. Although she did not mention it in her affidavit, [Ms S] was offered alternative, full-time employment working in [another section] at the hospital, but she declined the offer. Instead, she was offered and accepted a redundancy payment. After only a few weeks off work, [Ms S] obtained a position as a crosswalk attendant with the Police Department. This involved working two hours each weekday during school terms. When she was working she was paid about $155 gross per week. [Ms S] admits that [Mr P] protested about her not taking on full-time work at this time.

32There was no evidence of how much [Ms S] received for her redundancy payment. In his trial affidavit, [Mr P] said she drew on the redundancy money until it ran out and she then obtained the job as a crosswalk attendant. This would suggest the payment was a very modest one, since she took up the job on the crosswalk within a few weeks of leaving the job at the hospital. On the other hand, in cross-examination, when asked to explain why he thought it was unreasonable for [Ms S] not to have taken on full-time work after leaving the hospital he said, “I tried to explain to her that the redundancy was not going to be enough to retire on – it would be gone in 3 or 4 years and I said what are you going to do from there?” This response would suggest that the payment was a fairly significant one. Ultimately, I do not consider I should speculate on the size of the redundancy payment. It is feasible that the payment was not particularly large, given that [Ms S] was offered alternative work in the same institution. It was [Ms S]’s obligation to provide evidence of the amount she received and she failed to do so.

33[Ms S] was able to obtain full-time work after separation. She took up a full-time position [in a factory at a local] firm on 31 October 2006. The precise basis on which she was employed will be discussed later, but she was earning on average around $675 per week gross.

34No evidence was provided concerning the full extent of the income earned by each party during the course of the relationship. It is common ground, however, that [Mr P]’s income significantly exceeded [Ms S]’s. Indeed, at one stage, [Mr P] was cross-examined by [Ms S]’s counsel on the basis that his income was five times that of [Ms S]. Whilst I consider that this may have been a somewhat inflated estimate, I do find that [Mr P]’s income would always have significantly exceeded average weekly earnings and that [Ms S]’s income would always have been well below average weekly earnings. It is impossible to be precise, but given what little evidence there was and the nature of their respective occupations, it seems likely that when they were both working on a full-time basis, [Mr P] probably had an income at least three times that enjoyed by [Ms S]. The differential significantly increased during those years when [Ms S] was working only part-time.

35[Ms S] used her income to meet her personal needs. Until the time she left the [local hospital], she also purchased the great bulk of the groceries for the household. [Mr P] used his income to meet his personal needs and he also paid the utilities on the homes in which they lived. From time to time, when [Ms S] was short of money, [Mr P] would “top up” her finances to cover expenses she could not afford from her income. [Mr P]’s income also funded the many holidays taken by the parties. He estimated the cost of these was in the region of $5-6,000 per annum and I had no reason to doubt that estimate. After [Ms S] left her job at the hospital, the financial arrangements in the home changed. Thereafter, [Mr P] also took on responsibility for most of the cost of groceries.

36There was no attempt made to establish the relativities between the expenditure on groceries and the expenditure on utilities. [Mr P] did not dispute [Ms S]’s claim in her affidavit that the groceries cost more than the utilities, which in my view would be expected. This would be likely to be so, even though for much of the time there was only [Ms S] and [Mr P] living in the home and even though they seemed to have enjoyed a fairly modest standard of living.

37[Ms S]’s daughter lived with the parties for only the first few years of the relationship, although thereafter she used to come home during her days off work. [Ms S] received no child support for her daughter, who spent very little time with her father. [Ms S]’s son, who was a couple years older, stayed with the parties for a couple of years when he was a young adult. He was working full-time but was supported by [Mr P] and [Ms S] and did not pay board, although he paid [Ms S] about $50 a fortnight for doing his washing. He saved money for a deposit on his home and when he moved out, [Ms S] purchased furniture for his new house. [Mr P] had no legal obligation to provide support for either of [Ms S]’s children.

38In July 1988, about three years after commencement of cohabitation, [Mr P] purchased a block at [the beach] at a cost of $12,000. He borrowed $7,000 on a personal loan and provided the balance from his own funds. In 1993, [Mr P] sold the [beach] property for $27,750 and after expenses received $25,620. There was no evidence to indicate whether he still owed any money on the loan obtained to acquire the block. He had held the land for five years and as the loan was a personal loan, I consider it was more likely than not that the debt had been discharged by that stage.

39A few months after [Mr P] purchased [the beach block], [Ms S] purchased an investment property in [a suburb] at a cost of $60,000. She paid a deposit of $5,900 and stamp duty of $997 from the proceeds of her property settlement. It is unclear how much [Ms S] borrowed in order to complete the purchase of the block, but she did borrow some money. In August 1991 she still owed $34,050 and I consider it likely she borrowed a little more than that amount when the property was acquired three years earlier. The property was let and the rent was used to meet the mortgage payments.

40In the year prior to [Mr P] selling his [beach] property, [Ms S] sold her [investment property] for $88,000. She received approximately $51,000 net after expenses and discharge of the mortgage. She used $10,000 of this money to buy furniture for her son and she used some of the rest in 1992 to purchase an acre of bushland in [another suburb] at a cost of $32,000. This property was sold in March 2007 for $300,000. She cleared about $285,000 after expenses. (She has since used the proceeds to purchase an interest in a home owned jointly with her brother but the parties have chosen to conduct the proceedings on the basis of the pool reflecting the proceeds of sale of [the bush block], less the capital gains tax payable on the property.)

41Following the sale of [the first house] in October 1988, [Mr P] and [Ms S] moved into the property at [the next property]. [Mr P] held onto the proceeds of sale of [the first house] until May 1990 when he purchased [a farm] for $70,000. [Mr P] did not give evidence about precisely how he funded the acquisition of this property, other than to say that he used the proceeds of sale of [the first house]. These amounted to only $44,000. It is possible [Mr P] had saved the balance of the money needed, since the offer was a cash one.

42The [farm] was just 36 acres. It was intended only to be a hobby farm and has been used as such. The parties had a few cows, ponies and pets. They obtained a caravan in which to stay when they went out to the property together. [Mr P] later purchased a transportable home (cost unspecified) with the intention that it be erected on the property. In order to obtain the necessary permissions, [Mr P] paid the local shire a surety of $5,000. [Ms S] lent him the money for the surety pending him receiving funds from his bank. The loan was repaid within a matter of weeks. ([Ms S] gave evidence in paragraphs 96 to 99 of her trial affidavit of various other payments she had made to [Mr P] or in relation to properties he owned. I was inclined to accept [Mr P]’s evidence that his invariable practice in relation to any such payments was to repay them.)

43[Mr P] acquired his parents’ home [adjoining his own property] at a cost of $90,000 in late 2004. Although no specific evidence was given concerning the way in which the purchase was arranged, the extent of the current liability relating to this property would suggest that almost all, if not all, of the purchase price was borrowed.

44Neither party used any of their income to meet mortgage or loan payments on property acquired by the other party. Accordingly, all such payments came either from the salary/wages earned by the owner of the property or from rentals received for the property. [Mr P] also paid all of the outgoings on properties owned by him. [Ms S] paid some of the outgoings on the properties owned by her but she was often unable to afford to meet these and [Mr P] would meet them on her behalf. This was especially the case after [Ms S] left the [local hospital] in 2002, as thereafter she did not have sufficient funds with which to meet anything other than some of the household expenses.

45It should be noted in considering the respective financial contributions of the parties that at all times they lived in accommodation owned by [Mr P]. As a consequence, he had to forego any rental he might otherwise have been able to earn from that property, whereas [Ms S] was able to retain the rents during those periods when she owned a property that was let to tenants.

Non-financial contributions

46There was a very clear demarcation between the respective roles of [Mr P] and [Ms S] in the relationship. [Ms S] was almost entirely responsible for the domestic duties, including all of the cooking, cleaning and laundry. Even when she was working on a full-time basis, she would get up in the morning before [Mr P]. If he was working an early shift, she would make his breakfast; put together his “crib” for work and in the evening she would make his evening meal and serve it to him in front of the television. She would then do the cleaning up afterwards. She also periodically cleaned his boots, chopped the firewood, did some gardening and bought presents for his family (with money he provided).

47[Mr P] was responsible for maintenance of the homes in which they lived. He would mow the front and sometimes the back lawn ([Ms S] took on this task if it had been neglected). [Mr P] also undertook all of the maintenance required on [Ms S]’s [investment property] between 1988 and 1992.

48The main controversy between the parties concerning non-financial contributions related to work done around the [farm]. In his affidavit evidence, [Mr P] gave [Ms S] almost no credit for work done on the property. I am satisfied that the account given by [Mr P] in his oral evidence to the effect that work was done by both parties came closest to the truth. I formed the view that [Ms S]’s evidence tended to overstate the importance of the duties she carried out. In any event, both parties conceded in their oral evidence that the farm was nothing more than a hobby, which both of them enjoyed. There was no evidence to indicate that the work done made any real difference to the value of the property and the income earned from the property was at best nominal. I find that whilst [Mr P] did much more of the work than [Ms S], no weight should be placed on this in the assessment of contributions since the activity was simply an enjoyable pastime which had no economic consequence of any significance.

49I consider the most significant non-financial contribution was the solo effort undertaken by [Ms S] in managing the home, which I am satisfied was of a far more onerous nature than the maintenance and gardening carried out by [Mr P]. Whilst [Mr P] was more than capable of doing his regular job without support from [Ms S], her efforts around the home made life for him very much more comfortable than would otherwise have been the case. Her efforts would, in particular, have made [Mr P]’s life easier during the time he was convalescing from injuries he sustained at work. It is the case, however, that the relationship began to deteriorate quite badly in the last few years. Whilst [Ms S] continued to undertake the domestic work, she certainly was not prepared to go out of her way to assist [Mr P] in those latter years. For example, she admitted in cross-examination that she had “other things to do” when [Mr P] asked for help in getting [second property] ready to be rented at a time when he had an injury to his arm.

Assessment of contributions

50It is undoubtedly the case that the parties maintained a very strict separation of their financial affairs. Indeed, I cannot recall a case in which there has been such a marked degree of separation. But does this matter? [Mr P]’s counsel submitted that it did, whereas [Ms S]’s counsel argued that regardless of how property is held, it is necessary for the court to carry out an evaluation of the respective contributions of the parties. [Mr P]’s counsel did, however, properly acknowledge that in this case there was an association between the contributions and the separateness of the parties’ affairs. I accept the submissions of counsel for the wife. The High Court has made clear in dealing with the equivalent federal legislation that the Act imposes an obligation on the Court to evaluate each of the relevant contribution factors. Mallet v Mallet(1984) 156 CLR 605. In my view that obligation must be discharged regardless of the way in which the parties have chosen to order their affairs.

51I should record that there was no suggestion by [Ms S] that regard should be had to the different rates of capital appreciation on the various properties the parties have owned. In this regard, I do note that [Ms S]’s investment at [the bush block] was fairly spectacular. The bushland, which overlooks [a water way] was purchased for $32,000 in 1992 and was sold for $300,000 in 2007. This can be contrasted with the farm, which was purchased by [Mr P] in 1990 for $70,000 and is now worth $330,000. I presume no emphasis was placed on this, inter alia, because [Ms S] acknowledged that it was [Mr P] who encouraged her to buy the block.

52I have found that [Mr P] made a somewhat greater initial contribution than [Ms S]. I have also found that during the course of the relationship (and after separation), [Mr P] made a very much greater financial contribution than [Ms S] because his income far outstripped hers. Finally, I have found that the non-financial contributions made by [Ms S] were of a much greater magnitude than those made by [Mr P].

53The significance of the disparity in the parties’ financial contributions in this case is increased because portion of [Ms S]’s income and resources was expended on her children, for whom [Mr P] had no legal responsibility. Robb and Robb (1995) FLC 92-555.

54Ultimately, I did not consider it was necessary to make any attempt to quantify the difference (if any) between the parties’ respective day-to-day financial contributions made for the benefit of the other. Although the groceries cost more than the utilities, [Mr P] paid for the holidays and helped [Ms S] out financially when she was struggling. In the absence of any evidence that either party was wasteful with their money, I consider each should receive credit for the income they earned, rather than for the manner in which they expended it.

55The legislation confers on the Court a very wide discretion in assessing the respective weight to be given to the relevant factors, including those factors that cannot be easily measured in monetary terms. In attempting to arrive at a fair assessment it is important that the contributions [Ms S] made as homemaker are recognised in a substantial and nor merely in a token way. (Mallet v Mallet supra at 609, 623 and 636.) I do place significant weight on those domestic contributions but, overall, I consider that the disparity in initial contributions and the very great disparity in the parties’ incomes (in particular after 2002) were such that [Mr P]’s aggregate contribution should be regarded as exceeding [Ms S]’s. In the exercise of wide discretion afforded to me, I have determined that contributions should be assessed at 57.5% to [Mr P] and 42.5% to [Ms S]. Based on contributions alone, therefore, [Mr P] would receive assets to a value of $541,049 and [Ms S] would receive assets to a value of $399,906.

Adjustment for s 205ZD(3) and other factors

56[Ms S] originally submitted that there should be a 10% adjustment in her favour on account of the s 205ZD(3) factors. At the time she was advocating this position, she was also proposing that the parties’ superannuation entitlements should be included in the pool of assets. At trial, [Ms S]’s counsel properly conceded that the superannuation ought not be included in the asset pool. In view of the significant disparity between the parties’ superannuation entitlements, [Ms S] submitted at trial that there should be a 25% adjustment in her favour on account of s 205ZD(3) factors.

57[Mr P] submitted that if contributions were found to have been made 65:35 in his favour, as he proposed, then there should be an adjustment of 10% in favour of [Ms S] on account of the s 205ZD(3) factors. If, however, contributions were assessed at only 55:45 in his favour, he submitted there should be no adjustment on account of the s 205ZD(3) factors.

58[Ms S] is 59 years of age. She appears to enjoy generally good health. She works in a job that is physically demanding. Whilst in her affidavit evidence she indicated an intention to retire as soon as she received her property settlement, in the course of her oral evidence she indicated an intention to continue to work for some time to come. It is the case, however, that she has a relatively limited time left in the workforce.

59[Mr P] is 6 years younger than [Ms S]. He has had fairly serious back and elbow problems arising from two accidents at work, the first of which occurred in 1996. He has had surgery and periods of hospitalisation arising out the injuries and he has also suffered from depression for some time. [Mr P] has worked for the same employer for a very long time and his employer and workmates have been very accommodating in allowing him to undertake lighter duties. It seems likely this will continue to be the case in the future. The unchallenged medical evidence indicates there is a prospect that [Mr P] will suffer a further decline in his physical health, which could necessitate him giving up his employment. However, it was common ground that [Mr P] is not a “malingerer”. Given the understanding demonstrated by his employer and by his workmates, I consider the more likely outcome is that [Mr P] will continue to work for the next two or three years. There is a possibility he will continue to work past that time but, in my view, the greater likelihood is that he will retire at around the age of 55 or 56 years, which is the time he has always had in mind. [Ms S]’s counsel properly conceded that the evidence suggested that [Mr P] would not continue to work until age 60.

60The property and financial resources of both parties have been detailed above. As a result of my assessment of contributions, in the absence of any adjustment for s 205ZD(3) factors, there would be a disparity of about $141,000 between the net financial worth of the parties. There is also a significant disparity in their superannuation entitlements, with [Mr P] currently having nearly $268,000 more in superannuation than [Ms S]. Only a small proportion of this was accumulated prior to the commencement of cohabitation. If he retires when I expect he will, [Mr P] is likely to pay around $35,000 in tax on his superannuation payout. I have also noted previously that [Mr P] has a resource in the form of his untaken leave entitlements.

61Apart from the disparity in property and financial resources, there is a very significant disparity in the parties’ incomes. [Mr P] earns in excess of $90,000 per annum and is likely to earn at that rate until he retires. [Ms S] is earning about $30,000 per annum and she too is likely to continue to earn at around that rate until she retires. Neither of them is likely to keep working for more than a few years and this important disparity must therefore be kept in perspective.

62The relationship lasted for 21 years. It has had no impact on the earning capacity of either party. [Mr P] was working in his current employment prior to meeting [Ms S] and it could not be suggested that she has contributed to his earning capacity, nor has [Mr P] contributed to [Ms S]’s earning capacity. Each of them has contributed to their property and financial resources in the manner outlined above.

63Neither party has responsibility for children and neither has any dependants. Both have the normal commitments associated with supporting themselves. [Ms S] is living with her brother in the home they have purchased together at a cost of $676,000. She proposes to continue to share accommodation with her brother.

64Whilst [Mr P] has regular medical treatment, he indicated in his Statement of Financial Circumstances that he has no medical expenses. I assume therefore that these are either bulkbilled or reimbursed by his employer as part of his worker’s compensation entitlements. Neither party currently has any entitlement to social security. Depending upon how they arrange their affairs, they may have some social security entitlements in the future.

65The parties enjoyed what would appear to be a relatively modest standard of living during the course of their relationship, although they did have many holidays, often overseas.

66I consider the most important factor to take into account pursuant to s 205ZD(3) is the significant disparity in the incomes and property/superannuation entitlements of the parties. Although [Mr P] will probably only work for a few more years, during that time he will have further opportunity to put funds aside and to increase his superannuation entitlements. This will lead to further disparity in the position of the parties, as [Ms S] will earn only enough to maintain herself. It is true that [Mr P] is some years younger than [Ms S] but given the disparity in life expectancy of men and women and given the difference in the state of health of each of the parties, there is no reason to conclude that [Mr P] will require support for any longer period in the future than will [Ms S].

67It is also important to remember that this was a lengthy relationship. I consider it reasonable for both parties to have at least a moderately comfortable standard of living in the future given the size of the assets and financial resources available to them. In this regard, I have in mind the remarks made by the Full Court of the Family Court of Australia in Dickson and Dickson (1999) FLC 92-843 where Lindenmayer, Kay and Warnick JJ said.

47.Moss J observed that the primary function of s 75 is to enumerate factors, which must be taken into account when the Court exercises jurisdiction under s 74 in proceedings with respect to spousal maintenance. It is, by express incorporation into s 79, also a repository of matters to be taken into account in s 79 proceedings, in so far as the matters therein set out are relevant. Whilst it may, as a matter of individual circumstance, be correct to say that the mere existence of disparity of wealth ought not of itself justify a settlement of property to one party at the expense of the other, it may often, in the overall circumstances of a case, call for further adjustment beyond that assessed on contributions alone, so that the final order is just and equitable. In this case, after the contribution issues were determined, not only was there a huge disparity in respect of capital, and a significant disparity in respect of income, but this was a marriage that had lasted 26 years and, in the circumstances, the reasonable standard of living that might be expected by each of the spouses at the end of a very long marriage, and towards the end of their working lives, might be said to be one where each could enjoy a not dissimilar standard.

68I recognise that these remarks were made in the context of a marriage, whereas the parties here were never married. It is apparent, however, that the legislature intended that as far as practicable the rights of parties to a de facto marriage relationship would be identical to those in a legal marriage. I therefore consider that the dicta of the Full Court have similar application to the state legislation as they do to its federal counterpart.

69I have assessed contributions at 57.5% to [Mr P] and 42.5% to [Ms S]. In the exercise of the wide discretion afforded to me, and placing particular significance on the disparity in the parties’ financial positions at the end of a long relationship, I consider that a further adjustment of 15% of the asset pool in favour of [Ms S] would be warranted. The assets will therefore be divided in proportions of 57.5% to [Ms S] and 42.5% to [Mr P].

Just and equitable

70The final step in the process of property adjustment requires me to step back and consider whether or not the outcome based upon assessments of contributions and the adjustment on account of the s 205ZD(3) factors, brings about a result that is just and equitable.

71In determining whether or not the outcome is, in fact, just and equitable it is important to note the impact of the s 205ZD(3) assessment in dollar terms, rather than in purely percentage terms. The effect of the 15% adjustment in dollar terms is just over $141,000, but changes the disparity between the parties by double that amount. In my view, it is also important (especially given that both parties are close to retirement) to consider the distribution of the parties’ wealth by assuming – for the sake of this exercise only – that their superannuation entitlements are an asset available for distribution. If the superannuation resources were notionally brought into the asset pool, the overall distribution of assets would be $627,747 to [Ms S] and $719,351 to [Mr P] (after notionally allowing for the tax effect on the superannuation entitlement being paid prior to age 60 years). This would result in [Ms S] receiving about 46.6% of the “pool” and [Mr P] receiving about 53.4%.

72The overall result leaves both parties sufficient capital with which to obtain/retain appropriate accommodation. It is not sufficient to provide either of them with what they might reasonably have hoped to have available for their retirement but, regrettably, such is the outcome of relationship breakdown. Each of them retains some capacity to work for at least a short period of time and, in due course, depending on how they arrange their affairs, they will be able to receive social security. In my view, the outcome is just and equitable.

Spousal maintenance

73As noted at the commencement of these reasons, [Ms S] is seeking payment of spousal maintenance at the rate of $200 per week from the date of separation until the date on which she receives her property settlement, less the amount of maintenance already paid pursuant to an arrangement between the parties. [Mr P] opposes the making of this order and seeks an order that [Ms S] refund to him the $4,600 he has already paid by way of spousal maintenance.

74[Ms S] raised the payment of spousal maintenance in the first letter her solicitor wrote to [Mr P] on 4 September 2006. At that stage, the parties were still residing together under the same roof. The correspondence from [Ms S]’s solicitor noted that [Ms S] anticipated that it would cost her $300 per week to rent a suitable property in Bunbury and that she anticipated she would need approximately $200 per week on which to live after taking account of the “$100 gross per week” ^(sic) received from her employment as a crosswalk attendant. Accordingly, [Ms S]’s solicitor asked [Mr P] to agree to pay maintenance of $500 per week until the final settlement was arranged. [Mr P] agreed to commence making payments at the rate of $200 per week.

75[Ms S] then obtained work at a [local firm] on 31 October 2006. The evidence she gave concerning the nature of this employment was extremely confused, as she incorrectly used the terms “full-time”, “part-time”, “casual” and “permanent” when describing her employment. Whilst [Ms S] denied in her evidence that she had “full-time employment”, she was in fact employed on a full-time basis. Initially, she was employed on a casual basis only but the employment became permanent in February 2007.

76Whatever may have been the nature of her employment, [Ms S] did not inform [Mr P] or his solicitors about it. On the contrary, her solicitors wrote to [Mr P]’s solicitors on 28 November 2006 asking them to ensure that he continued to the payments of $200 per week. After indicating in their letter that [Ms S] was not prepared to attend mediation, her solicitors went on to say:

“Because of the urgency for our client to obtain spousal maintenance and property settlement, she has instructed us to file documents with the Court seeking property settlement and spousal maintenance”.

The letter concluded:

“This situation is urgent because our client is not receiving Centrelink benefits, she has no income apart from the $200.00 spousal maintenance which is being paid by your client. That is clearly not sufficient for her to meet her ongoing living expenses”.

77[Ms S] did, as threatened, commence proceedings for property settlement and spousal maintenance at the rate of $500 per week. The application was filed on 1 December 2006. [Ms S]’s documents filed in support of her application indicated that she was unemployed and claimed that her income was “nil”.

78On 7 December 2006, [Mr P]’s solicitors wrote to [Ms S]’s solicitors asking them to provide “any documents which are relevant to her current income or earning capacity”. [Ms S] claimed in her oral evidence that in response to the correspondence of 7 December 2006, she showed her solicitor her passbook into which her regular income from the [firm] was being paid. She was unable to explain why her solicitors did not show this to [Mr P]’s solicitors. She did, however, in late January 2007, provide an amended list of discoverable documents in which she disclosed one payslip for 5 January 2007. [Ms S] did not challenge the claim made by [Mr P] in his trial affidavit that the payslip that was provided was for an amount $100 per week less than her average weekly pay at the time. Nor did she deny his allegation that, despite requests from his solicitors, she had “refused to provide a copy of her employment agreement, documents showing terms of her employment, superannuation and when she started”.

79[Mr P] says he reduced the payments of spousal maintenance to $100 per week after finding out [Ms S] had a job, but he said he did not realise that she was earning more than disclosed in the payslip. Eventually, after the parties had attended a conciliation conference, [Mr P] stopped making payments altogether. [Ms S]’s solicitors then wrote to [Mr P]’s solicitors on 8 June 2007 noting that the payments had ceased and requiring immediate reinstatement with back-pay.

80[Ms S] failed in cross-examination to provide an adequate explanation for her abject failure to make a full and frank disclosure, as required, to [Mr P] or his solicitors concerning the terms of her employment. She claimed that her solicitors were aware that she was working but was unable to explain why this information had not been conveyed to [Mr P]’s solicitors. Nor was she able to provide any adequate explanation for the false claim made in her Statement of Financial Circumstances filed in December 2006 that she was unemployed and had no income. At one stage in her cross-examination, she asserted that it was “none of his business” whether she was working or not. It was, of course, very much [Mr P]’s business, as she was asking him to pay spousal maintenance in order to meet an alleged shortfall between her income and her expenses.

81[Ms S]’s conduct in relation to claiming spousal maintenance cast a serious doubt over her credibility generally. The best her counsel could do to attempt to salvage something out of the dilemma facing [Ms S] at trial was to say that [Ms S] may have been entitled to maintenance of $200 per week even taking into account the fact that she was in full-time employment. I was not persuaded that this was the case. Although [Ms S] was not earning a large income, in my view she was earning sufficient to maintain herself, particularly taking into account the fact that she was sharing accommodation with her brother. The maintenance was obtained under false pretences and [Mr P] was, in my view, justified in seeking some redress.

82Notwithstanding that I accept the foundation for [Mr P]’s discontent relating to maintenance issues, I do not consider that it would be appropriate to require [Ms S] to refund the spousal maintenance received. In the absence of any evidence indicating inappropriate levels of expenditure by [Ms S] since separation, if she had not received the spousal maintenance paid by [Mr P], he would have $4,600 more assets on his side of the ledger and [Ms S] would have $4,600 less assets or increased liabilities on her side of the ledger. I therefore do not oppose ordering [Ms S] to repay the maintenance she has received. On the other hand, I can see no basis for ordering any ongoing spousal maintenance, given that [Ms S] remains in full-time employment and in due course will receive a significant settlement of property.

83In making the observations above concerning [Ms S]’s credibility, I have not overlooked the fact that cross-examination disclosed not only that in his affidavit evidence [Mr P] under estimated the extent of [Ms S]’s work around the farming property, but he also gave incorrect evidence concerning the extent of his own income. The latter, however, simply related to the incorrect characterisation of expenses said to have been paid by [Mr P]’s employer when, in fact, they were expenses that he paid from the income he received from his employer. There was, in my view, no attempt to mislead either the Court or [Ms S] by the way in which the evidence was given. (Similarly, I was prepared to accept that [Ms S] did not intend to mislead when she failed to disclose in her Statement of Financial Circumstances the modest superannuation entitlements she had built up whilst working as a crosswalk attendant).

Chattels

84As I have mentioned previously, both parties wanted the return of some minor items of chattel property. The list [Ms S] wanted was contained in paragraph 5 of the Minute of Orders marked “MFI A”. [Mr P] indicated in evidence that he was prepared to allow her to have the items mentioned at paragraphs 5(a) and (c). He said he knew nothing about the item at paragraph 5(d) and there was insufficient evidence to allow me to make any order in relation to that item. There was no mention of the item at paragraph 5(b) of the Minute. Accordingly, I propose making orders in terms of paragraph 5(a) and (c) of the [Ms S]’s Minute.

85The items of chattel property sought by [Mr P] were set out in paragraph 2 of the Minute of Proposed Orders contained in his Papers for the Judge. [Ms S] was agreeable to [Mr P] having the items at paragraphs 2(a)(i) and (ii). She knew nothing of the item referred to at paragraph 2(a)(iii) and said she did not have the item at para 2(a)(v) – even after [Mr P] attempted to explain the item to which he referred. She was opposed to him having the item at para 2(a)(iv), namely the antique sewing machine, to which reference is made below. Accordingly, I propose making orders for the return of the items at para 2(a)(i) and (ii) of [Mr P]’s Minute of Proposed Orders but do not consider there was sufficient evidence to make any order in relation to the items at para 2(a)(iii) and (v). This leaves only the antique sewing machine for consideration.

86The parties gave conflicting evidence concerning the sewing machine, with one of the only things on which they agreed being the fact that it had been restored during the course of the relationship. [Mr P] originally claimed that he had renovated the machine himself but it became common ground that a tradesman had undertaken the work. [Ms S] claimed that she had paid the tradesman $400 for the work and that at that time [Mr P] had not wanted the sewing machine. [Mr P] denied that [Ms S] had paid for it and said that it was paid for along with the cost of the renovation of the bathroom which was being undertaken by the same tradesman. [Mr P] claimed that he had originally purchased the sewing machine from a neighbour but admitted that [Ms S] was the one who had instigated the renovation. On the evidence, I could not determine that either party had any greater claim to the sewing machine than the other party. Whilst possession is not necessarily “nine-tenths of the law”, I do not propose making any order for the return of the sewing machine to [Mr P].

Orders

87Counsel for [Mr P] asked for leave to make submissions after the delivery of judgment as to the manner in which the settlement was to be effected. In my view that is appropriate. I therefore do not propose to provide draft orders for consideration by the parties. Given the eminence of counsel for both parties, I would anticipate that they would in due course present me with a Minute of Orders to give effect to my judgment. I would then make orders in chambers.

I certify that the preceding [87] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate