S and S - [2002] FMCAfam 219

FEDERAL MAGISTRATES COURT OF AUSTRALIA

S & S

[2002] FMCAfam 219

FAMILY LAW – Application for property proceedings – ascertaining the size of the asset pool – contribution – damages award – premature contribution – subsection 75(2) factors – reduced working life.

Family Law Act 1975, ss.75(2), 79

Ferraro and Ferraro (1993)FLC 92-335; McLay and McLay (1996) FLC 92-667; Aleksovski v Aleksovski (1996) FLC 92-705; Williams and Williams (1985) FLC 91-628; Townsend and Townsend (1995) FLC 92-569.

Applicant:

K E S

Respondent:

J S

File No:

PAM25 of 2002

Delivered on:

23 April 2002

Delivered at:

Parramatta

Hearing Date:

3 April 2002

Judgment of:

Scarlett FM

REPRESENTATION

Solicitors for the Applicant:

Mr Zarb, Vaughan Zarb & Co
DX 25064
FAIRFIELD

Solicitors for the Respondent:

Mr Sommerville
Simpson and Harrison
5/20 Montgomery Street
KOGARAH NSW

ORDERS

Within one month from the date of this Order, the husband is to pay to the wife the sum of $22,837.54 and, simultaneous with that payment, the wife is to deliver to the husband a transfer to him of the whole of her right, title and interest in the former matrimonial home situate at and known as 4/40-42 Q Street, B in the State of New South Wales and the husband is to indemnify the wife absolutely and forever in respect of the mortgage debt to RAMS Mortgage Corporation Limited and the husband is to discharge the said mortgage debt simultaneously with the payment of monies and delivery referred to above.
Within one month from the date of this Order, the husband is to pay to the wife’s mother M E S the sum of $20,000.00.
That in the event that the husband fails, refuses or neglects to pay to the wife the monies described in Order 1 above or to pay to the wife’s mother the sum of $20,000.00 described in Order 2 above, or discharge the said mortgage debt then the husband and the wife must forthwith join in and do all things necessary to sell the former matrimonial home at the earliest possible date; and
(a)the parties agree on the real estate agent to be appointed for the sale of the said former matrimonial home and, failing agreement within 7 days of the expiration of the said period of one month, either party is to be at liberty to appoint a real estate agent conducting his or her business in the approximate locality of the former matrimonial home; and
(b)the price for sale is to be a price mutually agreed between the parties or, failing such agreement, to be the value ascertained by a registered valuer appointed by the President of the Australian Institute of Valuers and Land Administrators (Inc.) New South Wales and the parties are to pay the cost of that valuation in equal shares; and
(c)the former matrimonial home is to be initially offered for sale by private treaty and, if not sold within 2 months of the date of being first listed for sale, or such extension thereof as the parties shall mutually agree, then it is to be submitted to public auction within a period of 6 weeks of the expiration of the said 2 month period or agreed extension thereof.
Upon the sale of the former matrimonial home, the proceeds of sale are to be distributed in the following order, manner and priority:
(a)in payment of real estate agent’s commission and auction expenses (if any) and the legal costs and disbursements of the sale;
(b)in discharge of the RAMS Mortgage Corporation Limited mortgage;
(c)in payment to the wife’s mother M E S the sum of $20,000.00;
(d)in payment to the wife of the said sum of $22,837.54 together with interest on that sum at the rate prescribed from time to time by Part 22 of the Federal Magistrates Court Rules 2001 calculated from the date upon which payment should have been made by the husband; and
(e)in payment to the husband of the balance of the proceeds of sale.
Pending payment to the wife of the amount provided by Order 1 above or sale of the former matrimonial home as referred to in Order 3 above:
(a)the husband is to continue to pay, as they fall due, all regular instalments in respect of the mortgage, all council rates, water rates and household insurance in respect of the former matrimonial home and indemnify the wife in respect of such liability;
(b)neither party is to re-draw any part of the repaid housing mortgage loan from RAMS Mortgage Corporation or encumber the real property without the written consent of the other party; and
(c)the parties are to hold their respective interests in the former matrimonial home upon trust pursuant to these Orders.
The husband is declared the sole and beneficial owner of Holden Vector motor car registered number W.. 398.
The wife is declared the sole and beneficial owner of Nissan Pulsar motor car registered number W.. 206.
The husband is declared to be the sole legal and beneficial owner of the following chattels:
(a)barbeque;
(b)dishwasher;
(c)clothes dryer.
The wife is declared to be the sole legal and beneficial owner of the following chattels currently in the husband’s possession:
(a)two makeup tables with mirror and chair;
(b)stereo player;
(c)vacuum cleaner;
(d)wife’s clothing;
(e)washing machine;
(f)board games;
(g)two lounge suites (one three-seater, one 2.5 seater);
(h)bookshelf;
(i)one half of the jointly owned pots and pans;
(j)one crystal waterfall;
(k)one half of white crockery set,

and the husband is to deliver these items in good repair to the wife’s residence or as she otherwise directs within 14 days from the date of these orders.

Except as otherwise provided in these Orders, each party is declared to be the sole legal and beneficial owner of all superannuation entitlements and monies in banks and other financial institutions in their respective names, and all other items of furniture and furnishings and other chattels currently in their respective possession.
In the event that either party refuses or neglects to sign or execute any deed or instrument within 7 days of being required to do so, then the Registrar of the Federal Magistrates Court shall be appointed pursuant to section 106A of the Family Law Act to sign or execute such deed or instrument in the name of such party and do all acts things necessary to give operation to the said deed or instrument.
All exhibits are to be returned after the expiry of one month from the date of these Orders.
With the exception of exhibits, all documents produced in answer to any subpoena are to be returned forthwith.
The matter is removed from the Pending Cases list.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

PAM 25 of 2002

K E S

Applicant

And

J S

Respondent

REASONS FOR JUDGMENT

This is an Application by the wife for orders for a settlement of property matters between the parties. In her Application, filed in the Family Court of Australia at Sydney on 23 April 2001, the wife seeks orders to the following effect:
a)
that the parties sell the former matrimonial home at 4/40–42

Q Street, B by private treaty;
b)that the net proceeds of sale be divided as follows:
i)by repaying a loan of $20,000 from the wife’s mother;
ii)as to 70% of the balance, to the wife; and
iii)the remaining 30% to the husband.
c)that the husband continues to pay mortgage instalments, rates and strata levies on the home until sale;
d)that the husband retain his interest in the following:
i)money in banks or other financial institutions;
ii)a list of furniture, furnishings and other chattels;
iii)his superannuation and life assurance entitlements; and
iv)his interest in real property in C, Q.
e)that the wife retain her interest in:
i)money in banks or other financial institutions;
ii)a list of furniture, furnishings and other chattels; and
iii)her superannuation and life assurance entitlements.
In his Response, filed in the Family Court on 8 June 2001, the husband seeks orders whereby:
a)the wife transfers her interest in the former matrimonial home to him in return for a payment of $5,000.00 (The husband was given leave to amend his Response by deleting the figure of $5,000.00 and replacing it with the figure of $20,000.00);
b)if he fails to pay the money, the property is to be sold and the wife is to receive the sum of $5,000.00 (read $20,000.00);
c)pending sale or payment,
i)the husband continue to pay the mortgage payments, rates and insurances relating to the home;
ii)neither party is to re-draw any amount of the mortgage loan; and
iii)the parties hold their property interests on trust;
d)the husband is to be declared the sole owner of the Holden motor car W.. 398;
e)the husband be declared the owner of certain items held at the wife’s mother’s premises;
f)each party is to be declared to be the sole owner of all superannuation entitlements, money in banks or financial institutions, and furniture, furnishings and chattels which they presently hold, with the exception of items in two lists, headed “List 1” and “List 2”;
g)that each party divide up the furniture and other chattels in dispute by selecting the items in one or other list;
h)the Registrar of the Court to be appointed to execute deeds or documents in the name of a party who refuses to do so pursuant to Section 84 of the Family Law Act[i]; and
i)liberty to restore on 7 days notice in respect of implementation.
A conciliation conference was held on 6 September 2001. On

13 December 2001, the parties consented to transfer the proceedings to the Federal Magistrates Court at Parramatta.
The matter came before this Court for the first time on 11 February 2002 and was listed for final hearing on 3 April 2002.

Background

The husband was born on 21 November 1968. The wife was born on 15 November 1971. They are, therefore, aged 33 and 30 years respectively. They commenced cohabiting about the middle of the year 1998, and they were married on 1 August 1999.
The parties have one child, J, who was born on 23 February 2000. They purchased the matrimonial home at B in June 2000, and they resided there until separation. The wife left the husband on

15 October 2000, and commenced residing with her mother. The child J has resided with her since separation. The husband continues to reside in the former matrimonial home.

Issues

The issues between the parties are:
a)what are the assets that comprise the pool of matrimonial assets available for distribution?
b)Did the wife’s mother lend or give the parties the sum of $20,000.00?
c)What proportion of the assets did each party contribute?
d)What adjustments should be made (if any) as a result of consideration of the factors contained in section 75(2) of the Family Law Act?

Evidence

The wife provided affidavits by herself and her mother, M S. Both the wife and her mother were cross-examined by the husband’s solicitor, Mr Sommerville.
The wife gave evidence that she was a nursing student when she started living with the husband in 1998. Her assets amounted to some $18,000.00 all up, being $12,000.00 in savings, a car worth $2,000.00, furniture and household effects worth $2,000.00, and some jewellery, also worth $2,000.00. She deposed to the fact that the husband only had assets to the value of $4,000.00, being $2,000.00 in savings and $2,000.00 in furniture and household effects. She said that he also had an interest in a superannuation fund.
It is the wife’s evidence that the parties lived in rented accommodation in R B for about 18 months until they purchased the home unit in B for a price of $247,000.00. The wife deposes that they paid a deposit of $25,000.00 from their savings and they borrowed the sum of $222,000.00 from RAMS. The wife also says that her mother lent the parties the sum of $20,000.00 to assist them with legal and other expenses.
The wife says that she finished her nursing course in 1999 and obtained part-time work in the Prison Hospital at L B C C until January 2000, as a result of the impending birth of their son. She says that she re-commenced working in June 2000, again on a part-time basis.
The wife conceded that the husband pays child support and that the payments are currently up to date.
The wife also deposed to the fact that there has been a lot of correspondence between the parties’ solicitors about how they should divide the items of personal property which are in dispute between them. Even though some items have been agreed by the husband to go to the wife, the husband has refused to hand them over until these proceedings are finalised. The wife claims (and the husband denies) that the husband said to her “You can collect your stuff when the Court makes a decision.”[ii]
In cross-examination, the wife denied that the sum of $20,000.00 was a gift rather than a loan. She admitted that the $20,000.00 was not paid into the parties’ joint bank account. She stated that the money was definitely used for such expenses as solicitors’ fees and stamp duty in connection with the purchase of the former matrimonial home.
The wife admitted that she had withdrawn amounts from the RAMS mortgage account to the total of $3,300.00, saying that she needed those amounts for the support of the child, because child support payments had been suspended temporarily.
The wife was also cross-examined about certain chattels. She said that a video camera was purchased by the respondent at the time the child was born, for the use of the family. A barbeque was purchased during the marriage, using her “Barbeques Galore vouchers”. The wife denied that an alarm clock claimed by the husband was a present to him while he was in the Navy. She said that a stereo was purchased during the marriage.
The wife admitted that she had cancelled the insurance on the car that was in the husband’s possession. She said that the car was insured in her name and she did not wish to have a policy in her name over which she had no control.
The wife’s mother, M E S, gave oral evidence. She was cross-examined about the loan of $20,000.00 claimed by the wife. Her evidence was that the money was a loan from her to the parties whilst they were cohabiting and her daughter was pregnant. She said that the husband was present when she took the money out of her bank account, in the form of a bank cheque. Her explanation for the presence of the husband and the wife was that it was a day that they were going to see the wife’s gynaecologist.
It was put to Mrs S that the sum of $20,000.00 was a gift, not a loan. Her reply to that suggestion was that she did not have the money to give a gift of that value.
For his part, the husband gave evidence by way of two affidavits. He also produced a short affidavit by one B M and an affidavit by Dr A S, a consultant orthopaedic surgeon. Neither Mr M nor Dr. S was required to give oral evidence.
The husband’s affidavit sworn on 25 March 2002 was prepared with some detail. In the affidavit, the husband describes how he was born in B, and that he has a brother and sister.
The husband deposed to serving in the Royal Australian Navy from

4 May 1987 until 4 June 1999, when he was discharged on medical grounds. He now works for a company called M CPty Limited as a senior electronics technician.
The husband says that his property at the time he started cohabiting with the wife consisted of some furniture “of minimal value” [iii] and a car, which was later written off, without insurance.
After his medical discharge from the Navy, the husband received the sum of $36,269.66 from his Commonwealth Superannuation, which was paid into his account at the Commonwealth Bank. He says in his affidavit, “$25,000.00 of that money was subsequently transferred to my St. George account on 29^th June 1999 see Annexure “B” statement from St. George Bank. It was withdrawn on 26^th October 1999 to use as a deposit for the purchase of the unit.” [iv]
The husband annexed, as Annexure “A” to his affidavit, a copy of his bank statement from the Commonwealth Bank, to illustrate these transactions. Annexure “A” shows a deposit on 22 June 1999 from ‘Comsuper’ of $36269.66. The statement does not, however, entirely support his contention that he withdrew $25,000.00 on 29 June 1999. What it shows is a withdrawal of $2,880.00 on 29 June 1999. It also shows withdrawals of $27,000.00 and $800.00 on 25 June.
Annexure “B” is a copy of the relevant pages from the husband’s savings bank book with the St. George Bank. It shows a withdrawal by way of bank cheque in the sum of $24,255.00 on 26 October 1999.
The discrepancies between dates and exact amounts that appear in Annexures “A” and “B” and those described in the husband’s affidavit are curious, as the affidavit was presumably prepared with the benefit of having the documents there at the time. This pattern of inaccuracy is sufficient to cause the Court to view the husband’s other accounts of amounts and dates with some caution; if the husband cannot describe in an affidavit with accuracy figures and dates when there is documentary evidence available, what reliance can the Court place on his accounts of other dates and figures where no documents are available?
The husband says that the sum of $222,750.00 was borrowed from RAMS Mortgage Corporation to finance the balance of purchase money for the matrimonial home. All of his wages went into an account which had an interest offset facility. It was also possible to draw down amounts of money against the mortgage, with the aid of an ATM card with which each of the parties was provided.
The husband goes on to say in his affidavit that on 23 February 2000 he received a total of $79,056.28 from the Defence Department as compensation for his knee and lower back conditions. This amount, in two sums of $30,680.83 and $48,375.45, was paid into his account at the Commonwealth Bank. Two days later, he withdrew the sum of $29,250.00 to buy a car. He says that he still has that car.
The husband deposes in his affidavit (and the annexed copies of his bank statements support) that his bank balance of $50,284.48 on

25 February 2000 was reduced to $25,783.30 by the time the parties separated on 15 October that year. He explains the difference between the two figures as being due to “buying items for the home and for J including furniture and so forth for his room. Also K was off work until July or August 2000 … A lot of the money was simply spent on living expenses".[v]
The husband says that he continued to work full time in his civilian occupation earning $42,000.00 per annum. He also received a pension of $83.00 per fortnight from the Department of Veterans Affairs.
The husband goes on to describe two matters which are clearly of concern to him. The car had been insured with NRMA Insurance. On 11 December 2000 the car was damaged in an accident, costing him $4343.95 for repairs and $242.00 for towing. He deposes that he was unable to claim on the insurance policy because the wife had cancelled it after separation.
The husband also provides evidence that the wife drew down a total of $3,300.00 from the RAMS mortgage account between 17 and 20 October 2001. Annexure L to his affidavit contains a statement from RAMS showing withdrawals as follows:
(a)   17/10/01         $1,000.00;
(b)    18/10/01        $1,000.00;
(c) 19/10/01        $1,000.00;
(d) 20/10/01        $100.00; and
(e) 20/10/01        $200.00.
The wife does not deny that she withdrew those amounts. It is common ground that the withdrawals took placed at a time when the Child Support Agency had suspended making payments of child support to the wife, on the basis that there had been an overpayment. It is the wife’s case that the withdrawals were made to meet the expenses of supporting the child whilst child support payments were suspended.

The husband stated in paragraph 37 of his affidavit that he had continues to have his entire wages paid into the RAMS account so as to be in a position to buy out his wife’s interest in the home unit. He said that he “hoped” (past tense) to buy out the wife’s interest in the home.
The husband also described the medical problems he has had, and said that he had been told he would need a bilateral knee replacement, which would be an expensive operation. He has also provided an affidavit by Dr A S, which is unchallenged.
The status of the loan of $20,000.00 claimed by the wife as a loan from her mother that needs to be repaid is challenged by the husband. He says that the loan came unasked, and was unnecessary. He also says that the loan never came into the joint account. His evidence is that if there was an amount of money handed over, it remained solely in the control of the wife, who spent it as she wished.

Principles to be applied

When dealing with applications to vary property interests, courts exercising jurisdiction under the Family Law Act must not make an order under the provisions of section 79 unless satisfied that, in all the circumstances, it is just and equitable to make the order[vi]. Subsection 79(4) sets out a number of matters the court must take into account. They include:
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 of the marriage or either of them;[vii]
b)the contribution (other than a financial contribution) made directly or indirectly or on behalf of a party to the marriage or a child of the marriage;[viii]
c)the contribution made by a party to the welfare of the family, including any contribution made in the capacity of homemaker or parent;[ix]
d)the effect of any proposed order upon the earning capacity of either party to the marriage;[x]
e)any relevant matters referred to in subsection 75(2);[xi]
f)any other order made under the Family Law Act affecting a party or a child of the marriage;[xii] and
g)any child support under the Child Support (Assessment) Act 1989.[xiii]
In dealing with applications under section 79 of the Family Law Act, the Full Court of the Family Court has made it clear that there are three steps to be followed by a court, whether it is the Federal Magistrates Court or any other court. First, the Court must identify the property of the parties and ascertain its net value.
Second, the court must look at the contributions of the parties, following the principles set out in section 79(4).
Third, the court then considers the relevant factors as set out in sub-section 75(2). This may involve an adjustment in favour of one or other of the parties. This approach has been laid down in cases such as Ferraro and Ferraro (1993) FLC 92-335 and McLay and McLay (1996) FLC 92-667.

The matrimonial assets

There is, in this case, no agreement between the parties as to the total value of the assets. Mr Sommerville, for the husband, says that the only matrimonial asset is the former matrimonial home at B, which has an agreed value of $275,000.00 and is subject to a mortgage with an amount outstanding of $219,000.00. Apart from the furniture, it is claimed that the net value of the assets amounts to the sum of $56,000.00, representing the parties’ net equity in the home.
On the other hand, Mr Zarb, for the wife, submits that the pool of assets available for distribution is considerably larger, totalling some $94,300.00. Mr Zarb arrives at this figure by including the husband’s car, valued at $16,400.00, the husband’s bank balance of $15,562.61[xiv] and a variety of other amounts, including superannuation and furniture. The total makeup of this sum of $94,300.00 does not appear in any document and I am unable to add the values of the assets referred to in the parties’ financial statements (or affidavit) to arrive at that figure.
What the Court is obliged to do is to consider the various assets claimed to be matrimonial assets and attempt to ascertain their value.
It is common ground that the former matrimonial home has a value of $275,000.00. There is no issue that the home is a matrimonial asset.
There is an issue between the parties about the Holden Vectra motor car, currently in the husband’s possession. Whilst the wife claims that the car is a matrimonial asset, the husband claims that it is not. Notwithstanding the fact that the car was purchased during the marriage, on 25 February 2000[xv] the husband submits that it should not be regarded as a matrimonial asset, because it was purchased out of the moneys the husband received as compensation for his injuries. No authority was cited for this proposition (or, indeed, for any other proposition), and it remains a bald assertion.
In my opinion, the evidence clearly points to the car, now valued at $16,400.00, as being a matrimonial asset. It was purchased during the marriage, two days after the child was born. The source of the funds, whilst relevant to the assessment of the parties’ contributions, does not take the car out of the asset pool. The question of damages for personal injury claims has been considered in Aleksovski v Aleksovski (1996) FLC 92-705, where Baker and Rowlands JJ held:
“In most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time.”[xvi]
The matter has also been considered by the High Court of Australia in Williams v. Williams (1985) FLC 91-628, where Mason ACJ, Wilson, Brennan, Deane and Dawson JJ, in a joint judgment, held:
“The short answer to this submission is that when the property available for division between the parties represents an award of damages for pain and suffering and loss of amenity, it may be relevant, in some situations, to have regard to the circumstances relating to that award, but there is no general presumption that the award should be let out of account in determining what order should be made under sec. 79 of the Family Law Act 1975 (Cth).” [xvii]
In this case, the husband received a damages payout and applied part of the proceeds of his claim to the purchase of a car during the marriage. I am satisfied that the car is properly regarded as an asset. The question of the contribution by the husband arising from the damages claim is an issue to be dealt with when the Court is assessing the parties’ respective contributions.
In his affidavit, sworn 25 March 2002, the husband deposed to having $15,562.61 in the bank. He goes on to say, “That balance represents the remainder of the approximate figure of $25,000.00 I had at separation which was the balance of my compensation monies”.[xviii] Curiously, in his financial statement, sworn the very same day, the husband shows a balance in the ADCU (a credit union) of $1643.00, but the sum in the bank account, with the Commonwealth Bank, is not mentioned. In oral evidence, the husband referred to receiving a bill from his solicitors for $5,000.00 but did not, to my mind, satisfactorily explain the discrepancy between the two documents of the same date. I find that the assets include a bank balance in the husband’s name of $15,562.61 and a credit union balance of $1643.00.
The husband was cross-examined about his interest in a piece of real estate at C, in Q. Mr Zarb, for the wife, submitted that this should be taken into account, as the husband had not disclosed this interest. The husband explained that none of his money had gone into that property. He said that the property is his brother’s residence, and the mother and brother had put money into it. Because his brother is disabled, he was not able to obtain a loan from a financial institution. No value has been given for this property.
It goes without saying that the husband should have disclosed the fact that his name is on the title of the real estate in Q. Nevertheless, I am satisfied from his evidence that the husband is in fact a trustee for his brother. There is no evidence that he has any beneficial interest in the property at all. I am not satisfied that the property in Q is a matrimonial asset.
The husband complains that the wife withdrew sums totalling $3,300.00 from the RAMS loan account between 17 and 20 October 2001. This incident is referred to in detail in paragraphs 33 and 34 of this decision. The wife claims that the moneys were necessary for the upkeep of the child whilst there were no child support payments coming in, but the husband disagrees.
The evidence is that the child support payments are up to date. The husband says that the Child Support Agency stopped deducting payments at that time because it appeared that there had been an overpayment. There is no evidence that the payments were in arrears between 17 and 20 October 2001, and the wife does not explain what the child’s needs were that required withdrawals from the joint loan account at the rate of $1,100.00 per day over a three-day period.
I consider that the proper way to regard this money is as a premature distribution of a proportion of the matrimonial assets. In doing so, I rely on the decision of the Full Court of the Family Court in Townsend and Townsend, (1995) FLC 92-569, which was a case where the husband had distributed to himself an asset in which the wife had a legitimate interest, by selling a taxi and keeping the proceeds. The Full Court held that the correct way in which to deal with the husband’s receipt of the moneys was to bring them into the pool of assets on a notional basis and make a distribution accordingly.
I propose, for the reasons set out above, to regard the withdrawal by the wife of the sum of $3,300.00 from the RAMS loan account in October 2001 as a sum which should be notionally brought into the asset pool as an asset held by the wife.
The debts in this matter appear to be as controversial as the assets. There is evidence that the balances outstanding to RAMS in respect of the mortgage over the former matrimonial home as at 26 March 2002 are $97,904.52 and $$120,424.62, making a total of $218,329.14.[xix]
Other debts are more contentious. The wife claims a debt of $20,000.00 to her mother, being an interest-free loan. The husband disputes it, suggesting that, if the money was received, it was a gift. The wife’s mother corroborates the wife’s evidence. She was cross-examined about the loan, and was not shaken in cross-examination. She specifically denied that the money was a gift. There is nothing to lead the Court to the conclusion that she did not ever expect the money to be repaid, but it appears that she is not agitating for repayment. I am satisfied that the evidence supports the wife’s contention that her mother lent the parties the sum of $20,000.00, and that this amount remains outstanding.
The husband also claims that it was due to the wife’s actions in cancelling the car insurance policy when the parties separated that he incurred a loss of $4343.95 for repairs to the Holden Vectra motor car and $242.00 for towing after the vehicle was involved in a collision with another vehicle. As I understand his case, he is submitting that the wife should reimburse him for these amounts. It is the wife’s evidence that she did cancel the insurance policy after separation, because it was in her name, but that she informed the husband. I am not satisfied that this should be regarded as a debt owing by the wife to the husband. The husband’s evidence makes it clear that the cause of the damage to the vehicle was his manner of driving. In paragraph 33 of his affidavit of 25 March 2002, he says, “On 11^th December, 2000 I had an accident. It was my fault.”
For the reasons set out above, I find the gross assets to be:
a)4/4042 Q Street, B (agreed)  $275,000.00
b)Holden Vectra motor car W.. 398 (husband)              $16,400.00
c)Nissan Pulsar motor car W.. 206 (wife)   $16,000.00
d)Husband’s bank balance   $15,562.61
e)Husband’s ADCU credit union balance   $1,643.00
f)Wife’s St.George bank balance   $300.00
g)Husband’s furniture and electrical   $5,000.00
h)Wife’s household effects   $2,000.00
i)Husband’s jewellery (watches)   $500.00
j)Wife’s jewellery     $2,000.00
k)Amount withdrawn from RAMS by wife   $3,300.00
TOTAL      $337,705.61
I find that the liabilities are:
a)Amount owing to RAMS   $218,329.14
b)Amount owing to wife’s mother   $20,000.00
c)Husband’s Visa account   $1,000.00
d)Wife’s Visa account     $178.00
e) Wife’s car loan     $24,000.00

TOTAL LIABILITIES $263,507.14

I should comment that I have made no allowance for the husband’s claim of an estimated $6,000.00 owing for income tax, nor have I allowed any amount for the parties’ legal costs of these proceedings.
By subtracting the liabilities from the gross assets, I arrive at a net value of $74,198.47 for the pool of assets available for distribution.

The contributions of the parties – section 79(4)

The Court is required to take into account three different types of contributions made by or any behalf of a party to the marriage. Sub-section 79(4)(a) requires the Court to consider the financial contribution made directly or indirectly to the “acquisition, conservation or improvement of any of the property”. Sub-section 79(4)(b) requires the Court to consider the contribution other than a financial contribution to the “acquisition, conservation or improvement of any of the property”. Sub-section 79(4)(c), on the other hand, requires an examination of the contributions made by the parties to the welfare of the family, “including any contribution made in the capacity of homemaker and parent.”
The High Court of Australia has expressly approved contributions to the welfare of the children post-separation as being a contribution under section 79(4)(c), in the case of Williams and Williams, (1985) FLC 91-628. In this case, I note that the wife has cared for the child of the marriage since the parties separated on 15 October 2000.
The marriage was a short one. The parties commenced cohabitation in mid-1998, were married in August 1999, and separated in October 2000. Financial contribution is particularly important in short marriages.
It is clear that the financial contributions significantly favour the husband. Whilst the wife’s initial financial contribution amounting to $18,000.00 exceeds the husband’s initial contribution of about $4,000.00, the monies received by the husband as a result of his medical discharge from the Navy amount to another $115,325.94. All of this money appears to have gone into the marriage.
The husband worked until his discharge from the Navy in 1999, whilst the wife was a student. The wife commenced working part-time from the end of 1999 until she had to stop work as a result of her pregnancy, and then she commenced work again on a part-time basis.
I take into account the fact that the wife has had the care of the child of the marriage since separation in October 2000. I also take into account the husband’s evidence of paying all his wages into the RAMS loan account in order to pay the mortgage off more quickly. Of course, he has also had the advantage of living in the home. I am satisfied that the ratio of contributions between the parties should be assessed at 85% to 15% in favour of the husband.

Section 75(2) factors

Sub-section 79(4)(e) requires the Court to take into account “the matters referred to in sub-section 75(2) so far as they are relevant”. I propose to consider them in order.
Sub-section 75(2)(a) requires the Court to take into account the age and state of health of the parties.
The wife was born on 15 November 1971, so she is now 30 years of age. She says in her affidavit that she has “relatively good health”.[xx]
The husband was born on 21 November 1968. He is 33 years of age. He has some disabilities arising from his service in the RAN. The husband has provided an affidavit by one Dr. A W. S, sworn on

28 March 2002. Dr S is an orthopaedic surgeon who examined the husband in November 1999 and again on 26 March 2002. Two reports, each dated 23 November 1999, are annexed to the husband’s affidavit sworn 25 March 2002. Dr S was not required for cross-examination. Dr S’s affidavit and the reports annexed to the husband’s affidavit were admitted without objection. It follows that Dr S’s evidence is unchallenged.
In his first report dated 23 November 1999, Dr S gave this opinion:
“The injuries in 1987 caused damage to both knees especially the patello-femoral joints, and this damage was aggravated by the general nature and conditions and obligations of his employment in the RAN. His persistent limp and his inability to use his knees when lifting anything have caused chronic lumbar ligament strains. The degenerative changes which developed in the patello-femoral joints have spread to include other areas of the knee joint proper. The ongoing symptoms from all these injuries are permanent and cause a severe degree of disability.
Because of these injuries he is permanently unfit for work which requires him to be on his feet much of the time, go up or down steps or stairs, kneel or squat, carry weights, have even average agility, sit or stand for long periods, lift or repeatedly bend, or regularly travel moderate distances.”
The court must take into account the income, property and financial resources of each of the parties and their physical and mental capacity for appropriate gainful employment.[xxi]
The wife is employed as a psychiatric nurse at L B G. She works four days a week. She gives her gross income in her financial statement as $600.00 per week from her employment, $102.00 per week from Centrelink and $25.00 per week from the husband, a total of $727.00 per week. Her property has been set out earlier. Her only financial resource is an amount of $652.00 held by State Super. She will not be able to access this amount until she reaches retiring age. There does not appear to be any reason why she would not have the capacity for appropriate gainful employment.
The husband is employed as a senior electronics technician with a company called M C Pty Limited. According to his financial statement, his gross weekly wage amounts to $888.00. He also receives a DVA pension of $41.00 per week and an invalidity benefit in the sum of $221.94 per week. His total gross weekly income, therefore, amounts to $1,150.94. His property has already been described. His only financial resource is a policy with AMP Flexible Lifetime Super with a value of $5,671.00. Presumably, this amount can only be accessed when he reaches retiring age.
Whilst the husband is currently in employment, there are doubts raised by Dr S about his capacity to remain in employment. On 23 November 1999, Dr S gave this prognosis:
“With regard to prognosis there will be a gradual increase in the symptoms and disability in both knees as the degenerative changes progress. His lumbar problems will continue unchanged.
By the time he is 60 he will require a total knee replacement on each side.”
On 27 March 2002, Dr S gave this opinion:
“The ongoing symptoms from this man’s back and knee injuries are permanent and cause a severe degree of disability and I am surprised he has been able to continue working. I have previously listed his work restrictions and this list is still valid. The prognosis is for gradually increasing symptoms and disability in his knees, though there may be no change in his lumbar spine.”
In an addendum, also written on 27 March, Dr S added these comments:
“This man should not be working now and the fact that he is, is a tribute to his motivation and stoicism.
If he chooses to continue working he will not be able to keep it up for very long.”

An important factor to be considered is that set out in sub-section 75(2)(c), whether either party has the care and control of a child of the marriage who has not attained the age of 18 years.
The wife has the care and control of the child J J S, who was born on 23 February 2000. On 9 March 2001, an order was made by the Family Court of Australia at Sydney that the child should reside with the wife and that the husband should have contact at certain defined times. The child has only recently turned two years of age, so he will not be attending school for another three years. The mother will have the responsibility of looking after him until he completes high school.
The husband, by comparison, does not have the care and control of any child.
The Court must consider the commitments of each of the parties that are necessary to enable that party to support both himself and herself and also a child or another person that the party has a duty to maintain.[xxii]
The wife has the obligation of looking after herself and the child. The husband has no other person to maintain but himself. In her financial statement, the wife gives her weekly expenses for herself and the child at $570.00. In his financial statement, the husband gives his weekly expenses for himself as $885.00. This amount includes a payment of $350.00 per week to RAMS Mortgage Corporation to meet the mortgage on the former matrimonial home (in which he resides).
Sub-section 75(2)(e) requires the Court to consider the responsibilities of either party to support any other person. Neither party has the responsibility to support any other person, other than the child J.
Each party is, eligible to receive a pension, allowance or benefit.[xxiii] The wife deposes that she receives a Supporting Parents Benefit from Centrelink. In paragraph 29 of her affidavit, the wife says that she receives “a Supporting Parents Benefit from Centrelink. Family Allowance payment of $145.00 per fortnight.” In her financial statement, the wife states that she receives the sum of $102.00 per week from Centrelink, which equates to $204.00 per fortnight. These benefits are income-tested.
The husband, in his financial statement, discloses a DVA[xxiv] pension of $41.00 per week and an invalidity benefit (military) of $221.94 per week. When he was cross-examined, the husband said that he did not believe that the invalidity benefit was income-tested.
Sub-section 75(2)(g) requires the court to take into account a standard of living that in all the circumstances is reasonable. The main change to the husband’s standard of living would appear to be due more to his disabilities than to the breakdown of his marriage. There is no evidence of any significant change to the wife’s standard of living.
Sub-sections 75(2)(h), (j), (k) and (l) refer to matters which are not relevant to the proceeding before this Court, except to say that the orders proposed would be unlikely to have any effect on the earning capacity of either party.
Sub-section 75(2)(m) requires the court to consider, in the case where either party is cohabiting with another person, the financial circumstances relating to the cohabitation.
The husband resides by himself. The wife resides with her mother and stepfather. She pays them board of $200.00 per week.
An order made or proposed to be made under section 79 is referred to in sub-section 75(2)(n). As these are property proceedings, the Court will be making such an order once all relevant matters are considered.
Sub-section 75(2)(na) refers the court to any child support under the Child Support (Assessment) Act 1989. This aspect is also referred to in sub-section 79(4)(g), in identical terms.
The evidence is that the husband is paying child support as assessed by the Child Support Agency. Whilst the wife says in paragraph 28 of her affidavit that the husband “has fallen behind with child support payments”, it was conceded at the hearing that the payments were up to date. It is a real possibility, however, that if the husband is not able to remain in the workforce, as Dr S has predicted, that his earnings will drop. As a consequence, his ability to make child support payments would be reduced.
Sub-section 75(2)(o) refers the Court to any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account. There do not appear to be any facts or circumstances that need to be taken into account, other than those already referred to.
When the various factors in section 75(2) are taken into account, those under subsections 75(2)(a) and (b) would tend to favour the husband significantly. There is unchallenged medical evidence that the husband’s chronic knee and back pain have an effect on his ability to work, and may force him to leave the workforce completely in the near future.
Subsection 75(2)(c), the fact that the wife has the care and control of the child of the marriage, favours the wife significantly. The matters referred to in paragraph 94, the likelihood of the husband being unable to continue paying child support at the current rate, also favour the wife. It does not appear that any other factor would affect the matter one way or another.
Taking the relevant factors in to account, I consider that the wife’s ongoing responsibility for the care and accommodation of a very young child with the real likelihood of the husband being unable to continue to make child support payments outweighs any other factor. This calls for an adjustment to the contribution based entitlement of the wife. This adjustment should be 15% of the net value of the assets at the date of the hearing.

Conclusions

The other matter to be considered is the ongoing dispute between the parties about the distribution of the items of personalty they held in common during their very short marriage. It is extraordinary that this issue should be incapable of resolution by the parties, and that time and money should be spent arguing about such items as an alarm clock.
Both parties have annexed to their affidavits copies of two letters between their respective solicitors. The first is a letter dated

2 November 2000 from the wife’s solicitor to the husband’s solicitor seeking certain items. The second is a letter from the husband’s solicitor to the wife’s solicitor, dated 7 November 2001. I have checked the two letters, and I am satisfied that the dates are correct. In other words, the letters were written one year and 5 days apart. In the intervening period, these proceedings were commenced in the Family Court and a conciliation conference was held.
The letter of 2 November 2000 sets out the items that the wife seeks. The husband’s solicitor’s letter of 7 November 2001 disputes the wife’s claim to some items but concedes that the wife should have others. Despite this concession, I was informed at the hearing that none of these items have yet been delivered to the wife. The wife claims, in paragraph 34 of her affidavit:
“I have endeavoured to retrieve these goods from my husband ever since. On the last occasion I raised this he said:-
‘You can collect your stuff when the Court makes a decision’.”
The husband denied this when he was cross-examined. He said that the wife’s stepfather collected all of the wife’s clothes and that the wife herself collected the child’s clothes and toys. He did not provide an explanation as to why the wife has not received those items that his solicitor’s letter said that she could have.
In any event, I see no reason why the wife should not have those items of personal property that the husband said that she should have as long ago as 7 November 2001. It is the normal custom that a spouse should be entitled to those gifts that came from his or her friend or relatives, although some items would come from friends of both parties.
There is no itemised valuation of the disputed items, and the allocation made by the court will therefore be somewhat arbitrary. The passage of time will have reduced the value or utility of some of the items. It is important that there should be an end to litigation between the parties.
In the letter from the husband’s solicitor to the wife’s solicitor dated

7 November 2001, the husband conceded that the wife should have the following items:
a)vacuum cleaner;
b)clothing;[xxv]
c)washing machine;
d)board games bought by the wife;
e)lounge suite 1 x 3 seater and 1 x 2.5 seater purchased by the wife (the husband’s solicitor’s letter says “Your client can have the lounge”);[xxvi]
f)bookshelf;
g)a ‘split’ of pots and pans;
h)one crystal waterfall;
i)half crockery set (white);
j)baby bottle and steriliser.
I propose to order that these items be delivered to the wife.
It appears that the large items in dispute between the parties are the following:
a)barbeque;
b)2 x makeup tables with mirror and chair;
c)clothes dryer;
d)stereo;
e)dishwasher.
The evidence about the barbeque is conflicting, and neither party’s account is more persuasive than the other. The husband says that the two makeup tables with mirror and chair are joint property. It is hard to understand why the husband would require a makeup table, let alone two. The husband says that the clothes dryer and the dishwasher are fixtures in the unit and should stay with the unit, which is an argument that is persuasive. The husband says that the stereo was purchased jointly, but the wife says it was purchased by her. The husband says that he should have the stereo because the wife has the video camera.
As I mentioned previously, no valuations have been provided for these items, and there is no other evidence about them. If the husband is to retain the home unit, as he wishes to do, then the clothes dryer and the dishwasher should remain in the unit. The barbeque appears to have been purchased for use in the home unit, so I am satisfied that it should remain there also.
It would appear to be just and equitable that, if the husband is to retain the clothes dryer, the dishwasher and the barbeque, the wife should have the stereo and the two makeup tables with mirror and chair, and I propose to order accordingly.
The above items have not been valued, so there is no other way that the court can dispose of them is to order that they handed over as individual items. It would not be economically sound to order that the disputed items be sold and the proceeds divided between the parties.
Turning to the other items of matrimonial property, the effect of the orders that I propose to make is that the husband is to receive 70% of the net assets and the wife is to receive 30%. As has been set out earlier, the wife’s contribution based entitlement has been found to be 15%, and this has been adjusted by another 15% as a result of consideration of the section 75(2) factors. I note that the wife, in her application, seeks orders requiring the former matrimonial home to be sold and paying 70% of the net proceeds to her, but I am not satisfied that her entitlement comes anywhere near to that percentage.
The husband will receive 70% of the net property of the parties or $51,938.93, and the wife will receive 30% or $22,259.54. The entitlement of the husband will comprise the following:-
·     4/40-42 Q Street, B   $275,000.00
·     Holden Vectra motor car W..    398   $16,400.00
·     Cash at bank     $15,562.61
·     Australian Defence Credit Union balance   $1,643.00
·     Furniture and electrical     $5,000.00
·     Jewellery (watches)     $500.00
Total      $314,105. 61

Less Liabilities

·     Amount owing to RAMS Mortgage Corporation         $218,329.14
·     Amount owing to wife’s mother   $20,000.00
·     Husband’s Visa Card account   $1,000.00
·     Payment to wife     $22837.54
Total    $262,166.68
Balance      $51,938.93

The entitlement of the wife will comprise the following:-
·     Nissan Pulsar motor car W..    306   $16,000.00
·     Wife’s St. George Bank balance   $300.00
·     Household effects     $2,000.00
·     Wife’s jewellery     $2,000.00
·     Amount withdrawn from RAMS by wife   $3,300.00
·     Payment by husband   $22837.54
Total       $46,437.54

Less Liabilities

·     Wife’s Visa Card debt     $178.00
·     Wife’s car loan     $24,000.00
Total      $24,178.00
Balance      $22,259.54

I have reached the conclusion that it is just and equitable to make an order which should have the effect of permitting the husband to remain living in the former matrimonial home whilst he is capable of working and earning enough money to service a mortgage. The wife will receive a lump sum of cash. She is currently residing with her mother and working in paid employment 4 days a week. She may well be able to work for 5 days a week once the child starts school.
It is necessary to comment about two matters. First, whilst the gross value of the assets in dispute came to $337,705.00, the net value of the assets was just $74,198.00. The proceedings were commenced on

23 April 2001, and it will be just on a year until judgment is handed down. In fairness, I should point out the matter was transferred to the Federal Magistrates Court from the Family Court, and the matter first came to this Court on 11 February 2002. The matter was given a defended hearing date just over seven weeks later, and the parties’ legal advisers have both worked hard to comply with the Court’s directions and get the matter ready for hearing.
It is clear that this matter should always have been listed in the Federal Magistrates Court. A relatively straightforward property matter where the amount in dispute is less than $75,000.00 properly belongs in the Federal Magistrates Court. The Family Court has a heavy workload, and it should not have to deal with a matter of this nature, which took only about half a day to hear. It is also regrettable that this matter had to go as far as a defended hearing, and that the parties have incurred significant legal costs.
I should also comment that it is disappointing for a Court that has been operating for nearly two years to find documents filed that are incorrectly headed. A financial statement and two affidavits filed well after the matter was transferred bear the heading “Family Court of Australia”, and the affidavit of Dr S, which was of particular importance in the husband’s case, is headed “Local Court (Family Matters)”, of all things. No other court in Australia, to my knowledge, accepts documents that bear the heading of another court, and there is no reason why the Federal Magistrates Court should put up with it. Rule 2.04(3) of the Federal Magistrates Court Rules 2001 provides that “unless otherwise provided in these Rules, a document to be filed in a proceeding must be headed:
FEDERAL MAGISTRATES COURT OF AUSTRALIA At (Registry).”
I do not regard it as unduly onerous on practitioners or litigants in person to require them to prepare documents with the name of the Court on them. I do not regard heading a document intended to be used in this Court with the name of another court as ‘substantial compliance’ for the purpose of Rule 2.04.
For the reasons contained in the preceding paragraphs, I make the orders set out in the attached schedule.

I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Scarlett FM

Associate: A. Coutman

Date: 23 April 2002

[i] This section, although in force at the time, has since been repealed and replaced by section 106A

[ii] Wife’s affidavit filed 18^th March 2002, paragraph 34.

[iii] Husband’s affidavit sworn 25^th March 2002, paragraph 16.

[iv] Ibid, paragraph 17.

[v] Ibid, paragraph 25.

[vi] Section 79(2)

[vii] Subsection 79(4)(a)

[viii] Subsection 79(4)(b)

[ix] Subsection 79(4)(c)

[x] Subsection 79(4)(d)

[xi] Subsection 79(4)(e)

[xii] Subsection 79(4)(f)

[xiii] Subsection 79(4)(g)

[xiv] as set out in paragraph 40 of the husband’s affidavit of 25^th March 2002

[xv] Husband’s affidavit, paragraph 24

[xvi] at p 83,437

[xvii] at p 80,093

[xviii] paragraph 40.

[xix] Annexure “A” to husband’s affidavit sworn 2^nd April 2002

[xx] Wife’s affidavit filed 18th March 2002, paragraph 21

[xxi] Sub-section 75(2)(b)

[xxii] Sub-section 75(2)(d)

[xxiii] Sub-section 75(2)(f)

[xxiv] Department of Veterans Affairs

[xxv] The husband said in evidence that the wife had all items of clothing

[xxvi] NB singular rather than plural – no evidence or submissions made on this point