S and T

[2008] FCWA 7

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: S and T [2008] FCWA 7

CORAM: PENNY J

HEARD: 15, 16 & 17 OCTOBER 2006

DELIVERED : 21 JANUARY 2008

FILE NO/S: PT 2454 of 2005

BETWEEN: S

Applicant/Husband

AND

T
Respondent/Wife

Catchwords:

Property settlement - small asset pool - valuation issue - turns on its own facts

Legislation:

Family Law Act 1975 - s 75(2)

Category: Not Reportable

Representation:

Counsel:

Applicant: Mr R Hooper

Respondent: Mr S Jones

Solicitors:

Applicant: GK Family Law

Respondent: Leach Legal

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

Nil

1The parties, [the husband] and [the wife], have had a very poor relationship since they separated. Unfortunately, their conduct has negatively impacted upon their children, [S] and [A]. [The wife] wishes to leave [inland town], where the parties now both live, and move to [the coast]. She proposes that the child [A] live with her, and [S] continue to live in [the inland town] with [the husband].

2There is a prospect the parties may be able to resolve issues relating to [the wife]’s relocation, and the time the children spend with each parent. They have not, however, been able to resolve the manner in which their property should be divided.

3Their assets are modest, under $100,000, not including superannuation. There are two issues which must be decided by me before I can determine the asset pool and the manner in which the assets should be divided. The first is whether a [motor vehicle], which has in the past been registered in [the husband]’s name, belongs to him or his parents. The second issue relates to the value of the former matrimonial home.

[The motor vehicle]

4[The husband] says that the [specific car] car does not belong to him. He says it was a car purchased by his parents and he was allowed to use it, as was his sister, [Angela], and his brother. [The husband] says in his affidavit for trial that he did not use the [specific car] on a regular basis, and neither did his siblings. He says that being the eldest he got more use from the [specific car] than his brother and sister did.

5[The husband]’s father, [Mr S Snr] stated that he has had an interest in classic cars since 1987. Over the years he has purchased four vintage cars, [of various types including the specific car]. [Mr S Snr] stated that he spent a lot of time repairing these cars, detailing them and making them roadworthy. He says he allowed his children to use the cars for special occasions, but was conscious of not increasing the kilometres of the cars.

6When [Mr S Snr] decided to retire, he sold three of the cars to ensure that his ability to claim Social Security payments would not be prejudiced. He retained the [the specific car]. After the parties’ separation in April 2005, [the husband] used the car more because [the wife] had taken the family car for her own use.

7When cross-examined, [the husband] confirmed that the [the specific car] had been registered in his name from 26 February 1997 until 27 August 2004. It was insured in his father’s name from 1996 to 2001. In September/October 2004 he transferred the car to his mother’s name. He says he did this because his father wanted the car back. Although the car was insured in [Mr S Snr]’s name, [the husband], for at least some of the period in which the car was in his possession, paid for the insurance himself.

8It is [the wife]’s position that the car was owned by [the husband] and it was only transferred into his mother’s name a matter of two or three days after they separated in an effort to take it out of the asset pool.

9The parties separated on 3 April 2005. [The husband]’s evidence is that the car ceased being registered in his name on 27 August 2004, some eight months before the parties separated. He was not challenged in relation to this evidence.

10It is hard to know who is telling the truth in relation to this issue. [Mr S Snr]’s opinion of [the wife] is bad and he is likely to say anything to improve [the husband]’s position. I have ignored his evidence in relation to this issue.

11I accept [the husband]’s evidence that the car was generally used for special events, and that it was used not only by him, but his siblings as well. The vehicle was not transferred into his mother’s name a few days after separation but, in fact, eight months before the parties separated. I am satisfied that [the husband]’s usage of the vehicle increased after the parties separated because [the wife] had taken the family motor vehicle. I am satisfied, on the balance of probabilities, that the car is owned by [Mr S Snr], although it is registered in his wife’s name, and is not part of the asset pool of the parties.

Valuation [of the former matrimonial home]]

12The parties have been unable to agree the value of the former matrimonial home [at the town address]. In September 2006, [Mr M], a valuer, instructed by [the wife], valued the property at $135,000. In August 2007, it was his opinion that the value of the property had increased to $175,000, an increase of almost 30%.

13[The husband] then instructed [Mr B], a valuer, who lives in the [same town] area, to value the property. He stated that the value in September 2007 was $130,000. At trial he was prepared to concede the property had a maximum value of $140,000. At trial [Mr M] stated that he would be prepared to agree that the property was worth $160,000 to $165,000. He was prepared to reduce the value from that contained in his valuation to reflect the problems the property has with rising damp, the changed market conditions since he prepared his report and in an effort to compromise the big difference between the valuers.

14[Mr M] in his first report described the house as structurally sound, but noted that there was rising damp evident at lower wall levels in the passage, bedrooms and kitchen, and remedial work was required. When he re-valued the property in 2007, he did not internally inspect the property and based his increased value on the rising prices in the [local] area.

15He confirmed in cross-examination that it would cost money to fix the rising damp and he had not made any allowance for that cost in his valuation. He stated that he had not inspected the other properties used by him to arrive at his valuation, and he did not know whether they were affected by rising damp. A number of them were timber and fibro properties, which were unlikely to be so affected.

16[Mr B], in his valuation report, stated as follows:

“The interior of the house has a major problem with rising damp – as covered below. If it was corrected, the house would increase in value and have a ready market demand. There is rising damp in each room – mostly on internal single brick walls – but if not treated it will also start on the external walls. To correct this will require a major repair job and take up to twelve months – to allow the walls to dry out. It entails removal of plaster and brick render, then the replacement of damp course and some damaged lower bricks – then leave for wall to dry out, after which a new cement render and plaster can be applied, when this is dry it can be repainted. The interior will require a full repaint. There are also wall cracks in two rooms – being bathroom and a major crack in the third bedroom. The kitchen has sound lino, lounge and bedrooms have sound carpet. Bathroom and laundry are suitable for house. It will be necessary to carry out work on the rising damp in the near future – to stop further deterioration.

There will be a limited demand for the house – even though it is situated in a good elevated residential area – because of the work required on the exterior and interior. Plus the time frame it takes to complete the work – up to twelve months.”

17[Mr B] gives some estimate as to the costs of correcting the damp. Given his expertise is in real estate and valuation, I do not intend to take this into account, however, he also states that when repaired and completed, the house would have a value in the area of $200,000. In his view, however, the house in the condition that he inspected it in September 2007, had a current market value of $130,000.

18The difference in opinion between the valuers relates to the significance of the rising damp problem and the manner in which it would affect its value. In that regard, I was more impressed with the evidence of [Mr B], who has inspected the property and given a more detailed report on it than [Mr M]. Being a local real estate agent and valuer, [Mr B] is aware of the fact that this is a problem in [the town], which has to be fixed and cannot be ignored.

19In my opinion, it is likely that the extent of the rising damp will be a real issue for any potential purchaser. I do not accept the opinion of [Mr M] that the house is likely to fetch in the vicinity of $170,000 when sold. In my view, it is more appropriate to value the property at the upper end of the scale as suggested by [Mr B] of $140,000.

Assets and liabilities of the parties

Assets:

[Matrimonial home] $140,000

[The vehicle], in [the wife]’s possession 8,000

Furniture in [the husband]’s possession 2,000

Furniture in [the wife]’s possession 2,000

$152,000

Less mortgage on [the matrimonial home] 87,000

$65,000

20I have left out of this calculation the parties’ superannuation. The value of [the husband]’s superannuation is currently $34,552, and [the wife]’s $9,245. The parties have agreed that there should be a splitting order of [the husband]’s superannuation so that the parties should share equally their superannuation.

21[The husband] has paid a significant amount in legal fees. The amounts paid have been either borrowed from family members or by way of a personal loan. I do not intend to add back the legal fees, given the manner in which they have been financed.

Contributions

Financial contributions

22The parties commenced their relationship in 1996. In November of that year, [The husband] was registered as the proprietor of the property [which became the matrimonial home]. [The husband] says he and [the wife] had only been dating for a period of four months. At the time the property was bought [the wife] had no assets of any significance, but [the husband] had saved the sum of $25,000. He used these funds as a deposit and purchased the house for $51,500. The house was purchased solely in his name and the mortgage was taken out solely in his name. In [the wife]’s affidavit for trial, she stated that at the commencement of the relationship neither she nor [the husband] had any assets of any significance. She was cross-examined in relation to this and conceded that [the husband] had at least $20,000 and used that sum as a deposit on the [matrimonial property]. She agreed with [the husband] that his father was mainly responsible for finding the house and arranging the purchase.

23In 1998 the initial loan was re-financed to pay for the renovations completed on the home and to pay out an amount outstanding on [the wife]’s loan to Esanda. They again re-financed the loan in approximately 2002 to finance a partnership business [in a franchise]. This business was not successful and now has no value.

24In order to fund the renovations to the family home, and because the parties needed to buy a family car, [the husband] worked for [a company] from 3.00 am to 5.00 pm for a period of 18 months. He saved enough to buy a [a car] for $16,000.

25After [S] was born, [the wife] returned to the workforce. She worked at [a child care centre], in the morning for a period of three hours, and worked at [a chain store] from 6.00 pm until 11.00 pm for five days out of seven per week. [The wife] continued with this employment for a period of four years.

26After separation the mortgage was increased by [the husband] and the funds were used to pay out the significant credit card debts the parties accumulated during the marriage.

Post-separation financial contributions

27[The husband] estimates that from April 2005 to September 2005 he paid the amount of $8,884 by way of post-separation contributions. At this time he resided in his parents’ home, but continued to pay for the expenses associated with the [matrimonial property]. These payments consisted of making minimum payments on the credit cards until they were finally paid off, paying the mortgage of $130 per week, the rates and utilities and GE Credit Line for [other goods]. During this time [the wife] was working and was not making any contribution to those expenses.

Non-financial contributions

28[The husband] and his family members were significantly involved in the renovations on the [matrimonial] property. [The wife] was also involved in doing this work. [The husband] said his father spent money on material used to renovate the home but did not ask for any payment from the parties. On the other hand, [the wife]’s father lent a satellite dish and other equipment later in the marriage, which he subsequently retrieved after separation.

Contributions to the welfare of the family

29After [S] was born, [the wife] was primarily responsible for his care. [A] was born in 2001. [The wife] was the primary care-giver for both children with assistance from [The husband] and his family.

Conclusions on contributions

30In my view, [the husband] has made the greater contribution to the accumulation of the parties’ assets. The $25,000 paid by him for the deposit of the former matrimonial home amounts to 38% of the total assets now owned by the parties. In addition, his father helped with the renovations to the home.

31During the course of the marriage [the wife] was the primary care-giver for the children, worked at two jobs for part of the marriage and contributed towards the family finances.

32Taking into account these factors, there should be an adjustment in favour of [the husband] of 15% to represent the initial contributions made by him and the subsequent contributions by he and [the wife] over the term of the marriage.

Section 75(2) factors

33[The wife] says there should be an adjustment in her favour of 10%, whereas [the husband] says the factors are evenly balanced if each of the parties has the care of one child. The situation now appears to be that [S] will remain living with [the husband], and [A] will live with [the wife]. [The wife] is likely to have to either relocate to another country town or obtain new accommodation in [the same town]. There will be extra expense to herself in having to move. In addition, if she wishes to buy a new property, she will have to incur expenses such as stamp duty and establishment costs for a mortgage. [The husband] has the benefit of retaining the former matrimonial home with a reasonably low mortgage, which he can easily afford to maintain.

34[The husband] is now aged 33 and [the wife] 27. They are both in good health. [The husband] is employed by a [specialist] company and earns $592 per week. [The wife] was working for a [care centre] in [the town], but that employment has now ceased. She is confident she will be able to obtain other employment in [the coastal town in her area of expertise]. At her previous employment in [the town] she earned about $414 per week.

35This is a very small asset pool. To do justice between the parties and to take into account s 75(2) factors, in my view, there should be an apportionment to take into account s 75(2) factors of 15% for [the wife]. This will provide her with an extra $9,750 in addition to the sum awarded to her as a result of her contributions. In my view, this is just and equitable and provides some funds for her to re-establish herself.

36This will involve [the husband] raising $22,000 to pay [the wife] to effect an equal split of the parties’ assets. In addition, there will be a split of [the husband]’s superannuation to allow for the parties to share equally in their superannuation entitlements. Such a result will, in my opinion, be just and equitable.

I certify that the preceding [36] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate