Sabin and Sabin
[2009] FMCAfam 521
•29 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SABIN & SABIN | [2009] FMCAfam 521 |
| FAMILY LAW – Final property orders – greater financial and non financial contributions by the husband – future needs of the parties. |
| Family Law Act 1975 (Cth) ss.75(2), 79(2) Evidence Act 1995 (Cth) s.128 |
| Lee Steere & Lee Steere [1985] FLC 91-626 Ferraro & Ferraro [1993] FLC 92-335 Clauson & Clauson [1995] FLC 92-595 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 C and C [1998] FamCA 143 Russell & Russell [1999] FLC 92-877 AJO v GRO (2005) FLC 93-218 Farmer & Bramley (2000) FLC 93-060 Kennon & Kennon (1997) FLC 92-757 Pierce v Pierce (1999) FLC 92-844 |
| Applicant: | MS SABIN |
| Respondent: | MR SABIN |
| File Number: | MLC 6675 of 2008 |
| Judgment of: | O’Sullivan FM |
| Hearing dates: | 11 & 12 May 2009 |
| Date of Last Submission: | 12 May 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 29 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Howe |
| Solicitors for the Applicant: | Moores Legal Pty Ltd |
| Counsel for the Respondent: | Mr Ham |
| Solicitors for the Respondent: | Salinger Brown Pty |
ORDERS
That all previous orders be discharged.
The Husband pay to the Wife the sum of $39,000 (“the payment”) within 90 days as of the date of this order (“the date”) and that contemporaneously with the payment:
(a)the wife do all such acts and things and sign all such documents as may be required to withdraw the Caveat over the real property situate at and known as Property L in the State of Victoria being the whole of the land more particularly described in Certificate of Title Volume [omitted] (“the real property);
(b)the husband indemnify the wife against all payments and liability pursuant to the mortgage (if any) and all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the parties respective possession.
(b)the parties retain any monies standing to the credit of the parties in their respective bank accounts.
(c)insurance policies remain the sole property of the beneficiary named thereon.
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Sabin & Sabin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 6675 of 2008
| MS SABIN |
Applicant
And
| MR SABIN |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings concern an application for property settlement pursuant to section 79 of the Family Law Act 1975 (“the Act”).
The applicant, Ms Sabin (“the wife”) filed her application on 23 July 2008. The respondent, Mr Sabin (“the husband”) filed a response on
1 December 2008.The wife is 47 years old and the husband is 65 years old. The parties met in Indonesia in December 2000, were married in Australia [in] June 2001 and separated in August 2007. There are no children of the marriage.
The wife had two previous long term relationships and the husband had previously been married three times.
Interim orders
The matter was first listed in the Court’s duty list on 27 August 2008.
On 3 December 2008 there were orders setting the matter down for hearing on 11 May 2009, a valuation on the former matrimonial home, a conciliation conference and directions to prepare the matter for final hearing.
Hearing
The final hearing was listed for 11 May 2009. However, the interpreter for the wife was unavailable. The matter was stood over to 12 May 2009 so the wife could have the assistance of an interpreter. At the final hearing Mr Howe, of Counsel appeared for the wife and Mr Ham of Counsel appeared for the husband.
Material relied upon
The wife relied on her:
·affidavit filed 23 July 2008; and
·financial statement filed 23 July 2008.
The husband relied on his:
·affidavit filed 21 October 2008;
·affidavit filed 7 May 2009; and
·financial statement filed 7 May 2009.
Parties proposals
In the application filed 23 July 2008 the wife sought the following final orders:
“1.That the Husband pay to the Wife the sum of $250,000 (“the payment”) within 30 days of Orders being made.
2.That contemporaneously with the payment the Wife do all such acts and sign all such documents as may be required to provide to the Husband at the expense of the Husband a Withdrawal of Caveat for the property situate and known as Property L.
3.That in the event the whole of the payment has not been made by the date, then the property be sold as soon as possible out of Court (“the sale”) and upon completion of the sale, the proceeds of sale be applied:
(a)first, to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge he mortgage and any other encumbrance affecting the property;
(c)thirdly, so much of the payment as is then outstanding together with interest thereon at a rate of 12 per centum per annum from the date to the Wife;
(d)fourthly, the balance to the Husband.
4.That within 14 days the Husband allow the Wife under his supervision or the supervision of his representative, to retrieve from Property L all of her personal belongings.
5.That the Husband pay the Wife’s costs of an incidental to this Application within 14 days of the date of the Orders made.”
In the case summary handed to the Court on her behalf at the commencement of the hearing on 12 May 2009 the wife sought the following orders:
“1.That the husband pay to the wife $100,000.
2.That the wife provide a Withdrawal of Caveat in registrable form in relation to her caveat on the husband’s home upon payment to her.
3.Neither party make any further claim against the other.”
However, at the conclusion of the hearing Counsel for the wife told the Court that his client sought final orders in effect that she receive a payment of approximately $57,000 from the total asset pool.
In his response filed 1 December 2008 the husband sought the following orders:
“1.That the Caveat lodged on behalf of the wife over the husband’s property situate at Property L particularly described in Certificate of Title Volume [omitted] be withdrawn forthwith.
2.That the Application of the wife filed 23 July 2008 be dismissed.
3.That the wife pay the husband’s costs on an indemnity basis.”
However at the end of the hearing Counsel for the husband told the Court his client sought orders seeing the wife receiving a payment of $5,000, the removal of the caveat, and otherwise the parties keep what was currently in their possession.
Background
In what follows a statement of fact indicates a finding of fact unless the context suggests otherwise.
The wife is 46 and the husband is 64 years of age. The husband and wife had previous relationships and the wife had a child from a previous relationship. There are no children of the marriage.
The parties met in Indonesia in late 2000. In early 2001 the parties went through a form of marriage ceremony in Indonesia. The wife moved to Australia in 2001. The wife arranged for her daughter to be adopted by her mother in Indonesia.
The husband brought to the marriage $25,000 held in a bank account, $32,000 in superannuation and a property at Property L (“the former matrimonial home”). The property had a redraw facility of $84,000. The wife brought no significant assets to the marriage.
The wife came to Australia in 2001 and lived with the husband in the former matrimonial home. The parties were married in Australia [in] June 2001.
At the commencement of the relationship the husband had been employed as a [omitted]. However shortly after the wife’s move to Australia the husband was made redundant.
The husband received a redundancy package which the parties lived off. By 2003, both the wife and the husband were receiving payments from Centrelink.
During the marriage the wife was not employed. The wife did cook and clean though it appears not to the husband’s taste or satisfaction.
In 2004 the parties separated for a short period of time, with the wife moving to a women’s refuge. The parties shortly thereafter reconciled and resumed cohabitation at the former matrimonial home.
During the marriage and (for some of that time) from the monies she received from Centrelink, the wife regularly sent money back to Indonesia to help her mother (and sister and brother) to support her daughter.
Since moving to Australia the wife has not returned to Indonesia, has not seen her daughter or sent her presents and is unaware of her schooling or other arrangements beyond where she is living.
In August 2007 the parties separated on a final basis and the wife left the former matrimonial home. The wife currently lives in a share flat in [suburb omitted] and the husband remains living in the former matrimonial home.
Since separation the husband withdrew money and travelled around Australia. Also since separation the husband has had several major operations including heart surgery. The husband’s health is poor, to say the least and he has no capacity to work.
The wife’s health is good and she has no restrictions on her ability to work though she plans to return to Indonesia (as her mother has died) when she is able to do so financially.
Evidence
The wife’s evidence
The wife and the husband both gave evidence and were cross examined.
The wife adopted her affidavit filed 23 July 2008. Whilst the wife gave evidence with the assistance of an interpreter it was clear she understood what was being said in English and regularly had to be reminded to wait for the question to be translated before answering.
The wife’s evidence was that she was unemployed and had been receiving a Newstart allowance from Centrelink since 2003. The wife deposed to having an [omitted] qualification from Indonesia, however she has been unable to obtain employment in Australia.
The wife gave evidence she wishes to return to Indonesia and see her daughter who had been cared for (and adopted) by her mother.
The wife’s evidence was that her mother had died and that her daughter now lived with her brother and sister in Indonesia. The wife could not give any specific evidence about what grade or what school her daughter was attending or any other developmental stages she had met or challenges she faced. The wife’s evidence was that she regularly sent money to Indonesia to support her daughter. She acknowledged the husband had helped with this.
The wife was cross examined about her previous relationships and claims she had made to health authorities in Victoria about her background and incidents during her relationship with the husband. Even allowing for the fact that the wife was giving evidence with the assistance of an interpreter, her answers left doubts about her willingness to be frank with the Court.
In her evidence in cross examination the wife agreed the husband brought the former matrimonial home (which was unencumbered) to the marriage and three months after she arrived in Australia the husband was made redundant and received a significant termination payment of over $80,000 along with $32,000 in superannuation. The wife did not dispute that the husband also had $25,000 in savings.
An issue arose during the wife’s evidence about Centrelink benefits as to whether a certificate sought be issued pursuant to s.128 of the Evidence Act 1995. Ultimately as the wife’s evidence unfolded it was not necessary to do so.
In her evidence the wife claimed to have shared responsibility for household bills after 2003. However there was no evidence to corroborate this. The wife also did not deny taking money with her when the parties separated in 2004 and keeping it when they reconciled.
The wife acknowledged the husband’s overwhelming greater financial contributions and did not deny his health was poor.
Finally an issue was raised in the wife’s affidavit, which it appears was prepared by her solicitors, in relation to an alleged promise from the husband at the time of their reconciliation regarding the former matrimonial home.
When asked about this in her evidence in chief it was clear the wife at least had little appreciation of the import of such a claim for her in the context of her application. In contrast to the rest of her evidence the wife’s answer to a question about this was direct and unprompted.
She gave evidence “the promise” was that he was “not going to belt her anymore.”Given this evidence the argument was not subsequently pursued by her Counsel.
The husband’s evidence
The husband adopted the affidavits referred to above. The husband’s evidence was he is an invalid pensioner. The sheer weight of medical evidence attached to his affidavit material makes this clear. No issue was taken with the husband’s evidence he is unable to work and faces significant health issues.
The husband gave evidence that he had a vasectomy when he was
27 years of age and yet on a number of occasions during the marriage the wife, who (the Court was asked to accept) apparently did not know this, told him she was pregnant “standing in front of the heater rubbing her tummy.”
The husband’s evidence was the wife paid half of the food bills from 2003 and cooked “a little but at night time.” The husband’s evidence was he was a “steak and potatoes guy” and the wife cooked rice for herself. In cross examination the husband’s evidence was the wife was not “houseproud.” The husband had deposed in his affidavit filed 21 October 2008 that the wife was “lazy” around the house and that she would not get out of bed until after 1.00 pm.
The husband denied he assaulted the wife throughout the marriage. The husband’s evidence was that he defended himself against the wife’s violent outbursts.
The husband’s evidence in cross examination regarding the withdrawal of $80,000 post separation was refreshingly candid.
He agreed he had withdrawn it, put in a cash box, spent it on travelling around Australia and other expenses as part of the trip and that some remained. He gave evidence that he also gave some money to friends, which he did not expect to be repaid. On one occasion he lent one friend the sum of $10,000.
When asked why an explanation of that use wasn’t referred to in his affidavit the husband said “it was my money and I didn’t think it was that important.” When asked why he’d spent it his answer was he “may as well spend the money rather than her [the wife] spend it.”
There was detailed evidence about the husband’s health in his affidavit. Exhibit “LFS4” to the husband’s latest affidavit was a letter dated 24 April 2009 from Dr S, which provided that:
“In summary
[The husband]
is 65 years old, has a mechanical aortic valve and 3 or 4 of his coronary vessels have been bypassed. He is no longer subject to angina and it is assumed that his coronary artery flow is reasonable and that his risk of health attach is not unduly high. [The husband] is on warfarin and this requires him to lead a careful life keeping each day similar with diet, fluid intake, exertion and stress. The variation in his blood thinness is tested regularly by a laboratory and the warfarin dose adjusted to make this. [The husband] had a stroke, as seen by the CT brain of 2006 at some indeterminate time in the past. He had a very recent Transient Ischaemic Attach (a mini stroke) in December last year.
The warfarin reduces his risk of stroke caused by a blood clot but unfortunately raises his risk of a stroke caused by a bleeding cerebral vessel. I would feel that [the husband] has a considerable risk of having another stroke. I would consider [the husband] to be unable to undertake employment.”
The husband currently (and will continue to have to) take medication each day for the rest of his life for his medical conditions.
Approach to Property Orders
Section 79 of the Act defines the Court’s powers in determining applications for property settlement. It has been well established that the Court’s approach to such an application involves four steps (see Lee Steere & Lee Steere [1985] FLC 91-626, Ferraro & Ferraro [1993] FLC 92-335 (“Ferraro”) and Clauson & Clauson [1995] FLC 92-595 (“Clauson”)).
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)[1] the Full Court of the Family Court of Australia said of that approach at [78,386] that it:
“… involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.”
[1] (2003) FLC 93-143.
Given this the first step involves making a finding as to the pool of assets and liabilities. The second step involves a consideration of contributions made by the parties as defined in s.79(4)(a) to (c).
The third step involves the Court having regard to the matters set out in s.79(4)(d)-(g) (“the s.75(2) factors”) of the Act. At both the second and third steps, the Court must consider whether it is appropriate to make an adjustment of the parties’ property interests.The exercise involves balancing and comparing contributions which are different and difficult to value as well as looking to the future needs of the parties. The exercise cannot be regarded as a simple accounting or arithmetic one.
Finally, the Court is required to step back and determine if the overall result after the first three steps is just and equitable in the particular circumstances of the case (see Russell & Russell [1999] FLC 92-877 (“Russell”)).
First step – Asset pool
At the commencement of the hearing the parties handed the Court a minute prepared by their Counsel on the basis of the parties material that set out the agreed position of the parties regarding the assets and liabilities that was marked exhibit A1.
| Assets | Husband’s Value | Wife’s Value |
| Property L | $280,000 | $280,000 |
| Husband’s ING Direct savings account | $2,021 | $2,021 |
| Husband’s NAB savings account | $150 | $150 |
| Husband’s Toyota Landcruiser | $15,000 | $15,000 |
| Husband’s household contents (including BMW motor bike | $5,000 | $5,000 |
| Wife’s NAB savings account | Negligible | Negligible |
| Wife’s household contents | Negligible | Negligible |
| Total assets | E$302,171 | E$302,171 |
| Liabilities | ||
| No liabilities | -$0 | -$0 |
| Total liabilities | -$0 | -$0 |
| Nett Assets | E$302,171 | E$302,171 |
Notwithstanding the position of the parties set out above, there are a couple of matters that required examination before the assets of the parties (as at the date of the hearing) could be determined.
The wife submitted that $80,000.00 should be added back to the pool as the husband had withdrawn that amount (in 2 separate withdrawals of $40,000) from his account after separation. In her evidence the wife said she wanted to know what the money had been spent on and she believed it had been spent by the husband in an effort to deplete the matrimonial asset pool.
I note that the authorities clearly establish that amounts may be added back, for example, where a party has wasted money or spent money on their own pursuits such as gambling or purchasing extravagant gifts for another person.[2] Amounts may be added back where the expenditure or disposal of such amounts is, in reality, a premature distribution of those funds or assets that should have been available for distribution between the parties.
[2] eg. Wilson and Wilson (1989) FLC 92-033
I note the comments of the Full Court of the Family Court of Australia in C and C:[3]
“Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives.”
[3] C & C [1998] FamCA 143 at para 346
The Full Court in AJO v GRO[4] referred to situations in which “add backs” are considered. The first two of these are the parties’ expenditure on legal fees and the premature distribution of matrimonial assets. The third of these identified situation are where financial losses are incurred by the parties or either of them in their course of the marriage where such losses occur either where one of the parties has embarked on a course of conduct designed to reduce or minimise the effective value or net worth of the assets or where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets and where this conduct has reduced or minimises the value of such assets.
[4] AJO v GRO (2005) FLC 93-218
The husband was cross examined about this issue. He gave evidence he had withdrawn the monies and spent it after separation as it was his money he might as well do so.
The wife’s Counsel contended this issue was significant as the evidence demonstrated the husband’s conduct had resulted in a diminution of the matrimonial asset pool.
It was the wife’s submission where these monies were expended by the husband in the manner he acknowledged he had and this led to a reduction in the options available to the Court (without considering selling the former matrimonial home) then they should be added back.
The husband’s own evidence made plain his actions after separation in spending the money were a deliberate course of action that reduced the nett assets available. In the circumstances and on the evidence before the Court it is appropriate to add those monies back.
The Court was also told neither party sought to include the legal fees each party had estimated to have incurred. The wife’s legal costs were $10,000 and the husband’s was $7,000 respectively.
Given this and the position of both parties at the conclusion of the evidence I find the net assets to be $382,171.
Second step – Contributions
I now turn to the second step in the exercise under s.79, namely an assessment of the parties contribution within the context of s.79(4)(a) to (c).
In considering the contributions I have had regard to the principals set out by Kay J in Farmer & Bramley (2000) FLC 93-060 where His Honour said:
“68.The Court’s task is to evaluate all of the contributions from the time of the commencement of the parties relationship until the time of hearing given such weight to such contribution as the Court thinks is appropriate in the circumstances.”
In opening, Counsel for the wife specifically disclaimed any reliance on any argument relying on the principles in Kennon & Kennon (1997) FLC 92-757, notwithstanding his client’s affidavit appeared replete with references to allegations of domestic violence.
Both parties’ affidavit material set out details of claimed violent incidents during the marriage. The wife alleges that the husband was both verbally and physically violent. The husband vehemently denied those allegations and gave evidence that he was defending himself.
On 9 October 2007 the wife obtained an Intervention Order made at the Victorian Magistrates’ Court at Ringwood against the husband which remains in force for 2 years.
Ultimately Counsel for both parties did not pursue the matter at the hearing. The Court was left with the impression each of the parties solicitors thought these issues were more important that the evidence actually indicated.
Instead Counsel for the wife contended his client was entitled to an adjustment on the basis of her contributions which I consider at this stage and her future needs (to which I will return).
In his affidavit filed 21 October 2008 the husband deposed he believed the wife made “no direct or indirect contributions towards the acquisition, maintenance or conservation of my assets…” The husband also complained in his affidavit that the wife saw him as a “sugar daddy.”
It was not disputed the wife brought no assets to the marriage. As the evidence unfolded the only financial contribution she made during the marriage was by way of contributions, from her Centrelink payments, towards purchase of household groceries and “one or two bills”. She did however make at least some non financial contributions during the relationship.
In relation to the husband’s initial contribution the Full Court of the Family Court in Pierce v Pierce (1999) FLC 92-844 said at [85,881]:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant considerations of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home.”
Having regard to the fact that the former matrimonial home is a significant portion of the asset pool, there is every justification for saying that the financial and non financial contributions by the husband before, during the marriage (including by financial support) and after separation are especially significant in this case.
Recognising the value of the contributions the husband has made (including those made initially by bringing into the marriage the assets referred to earlier), those made both financially and non financially during the period of cohabitation and post-separation
I would adjust the assets 95% to the husband and 5% to the wife recognising her financial and non financial contributions.
Third step – section 75(2) factors
The purpose of section 75(2) factors is to assist the Court to ascertain whether an adjustment to the parties’ assets on the basis of contributions alone is just and equitable. The Court is not obliged to make an adjustment as a result of the consideration of the s.75(2) factors unless it is just and equitable to do so.
The effect of any proposed order on the earning capacity of either party to the marriage
There were no specific submissions made about this factor.
Neither party, apart from the wife doing work for the dole, really was employed during the marriage. Both parties maintained they had a limited earning capacity.
The age and state of health of each of the parties
The wife is 47 years of age and is in good health.
The husband is 65 years of age and suffers from several serious medical conditions.
I have already referred to the husband’s health conditions in his affidavit material and it is not disputed he is in very poor health.
The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
As referred to above, both parties are in receipt of benefits from Centrelink. Due to the husband’s medical conditions he is unable to work. The wife however has the ability to obtain paid employment. However on her evidence, I am not satisfied that she chooses to pursue all options to do so.
The evidence is that the wife has only applied for jobs that she was obliged to as apart of the work for the dole scheme. There was no evidence capable of convincing the Court to the requisite standard of attempts to apply for paid employment outside what is required of her by Centrelink.
Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The wife told the Court she wanted to return to Indonesia and reunite with her daughter who had been adopted by her mother over 5 years ago.
Commitments of each of the parties that are necessary to enable the parties to support himself or herself a child or another person that the party has a duty to maintain
Neither party has a legal duty to maintain a child or another party and there was no submission made to the contrary.
The responsibility of either party to support any other person
This factor has been addressed above.
The eligibility of either party for a pension, allowance or benefit
Both parties are receipt of pensions or government benefits. There was no submission made that any order made in this matter would effect such pension or allowance.
Where the parties have separated or divorced, a standard of living that in all the circumstances in reasonable
The wife in submissions made on her behalf placed considerable emphasis on this factor and on the need for any orders to have regard to what her standard of living was during the marriage and that she was now in a flat/boarding house and wanted to return to Indonesia.
The husband remained living in the former matrimonial home post separation.
The duration of the marriage and to the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
There was no submission made that this factor was a relevant factor at this stage in these proceedings.
The need to protect a party who wishes to continue that party’s role as a parent
There was no submission made relying on this factor in relation to continuing a role as a parent carried out during the relationship.
Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
There was no submission made that this was a relevant factor.
Any fact or circumstances which, in the opinion of the Court, the justice of the case requires to be taken into account
Aside from the above factors there was no submission made there was any other fact or circumstance that the Court should take into account.
Having considered the above factors and in particular the serious health issues facing the husband I make a further adjustment at this stage resulting in a total division of 90% to the husband and 10% to the wife to recognise her future needs.
Is it just and equitable?
Section 79(2) of the Act provides that:
“The Court shall not make an Order under this section unless
it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
The Full Court of the Family Court of Australia in Russell & Russell [1992] FLC 92-877 said at [86,439]:
“Furthermore, it must be remembered in this regard that under
s 79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets. Indeed we take the opportunity to emphasis that in what his Honour has termed “the fourth stage”. That is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not the percentage distribution which must be considered.”Given this, at this stage it is the justice and equity of the actual orders that the Court must consider.[5] In his affidavit filed 21 October 2008 the husband had deposed “I say that what I have accumulated I have done so without any assistance whatsoever from the wife. I regret that the wife is living in such dismal circumstances I say that whatever the conditions of her existence in Australia are, they are infinitely better than they were when I first met her in Indonesia.”
[5] see Russell [1999] FLC 92-877
At the end of the hearing Counsel for the wife, on instructions, told the Court that in light of the evidence a just and equitable division of matrimonial property would see her receiving 15% of the assets. Counsel for the wife told the Court that when the $80,000 spent by the husband on his trip around Australia was added back she should receive a payment of $57,325.00 equal to 15% of the assets.
Counsel for the husband told the Court “there’s no fool like an old fool” and in this case in light of the evidence a just and equitable division of matrimonial property would see his client making a payment of $5,000 to the wife. Counsel for the husband did not put this in percentage terms.
In light of his client’s evidence Counsel for the husband advanced no argument in submissions against the inclusion of the $80,000 in the pool. Counsel for the husband also told the Court the estimated liabilities for legal fees of each party should not be included and Counsel for the wife did not take issue with this.
Given the findings referred to above a decision in the terms contended for by the husband would in percentage terms see the wife receiving just over 1% of the asset pool after a 6 year marriage.
Whilst I am cognisant of the contributions she made and the greater future needs of the husband I don’t accept the argument made by Counsel for the husband that a payment along the lines he contended for would see the wife better off than at the commencement of the marriage. I also do not accept that such an outcome would be just and equitable in the circumstances.
A payment to the wife of $39,000 would represent just over 10% of the assets. The husband has an unencumbered property to use as security and a payment in those terms to the wife would see her receive an adjustment equal to the result arrived at having applied the above steps, once it was rounded up to the nearest $1,000. Such a payment recognises her contributions, her future needs and allows her to move forward with her life and if she chooses to return to Indonesia.
I will allow a reasonable time for any payment to be made and if it isn’t made within the time specified the wife can pursue the husband for bankruptcy as I do not believe it is just and equitable to secure the payment against the former matrimonial home (or have it sold if he defaults) in the particular circumstances of this matter.
In coming to that conclusion I have had regard to the discussion of relevant matters at each of the stages set out above and whether
I make an adjustment to the actual orders at this stage. I also taken into account:
·the duration of the marriage and period of cohabitation;
·that the husband made almost the entire financial contributions including by way of initial contributions;
·the wife made some financial and non financial contributions;
·there are no dependent children of the marriage (or children the parties had a duty to support);
·the wife has a greater future earning capacity than the husband;
·the husband’s very poor health; and
·the husband has maintained and lived in the former matrimonial home since separation.
The husband has made significantly greater contributions both prior to the marriage and throughout the duration of the marriage. Further, it is not disputed that the husband has significantly greater future needs given his poor health. In light of the matters referred to above if the wife receives just over 10% of the total asset pool, this effectively equates to the wife receiving a lump sum cash payment of $39,000.
Given this, the Court finds that the husband should receive just under 90% of the total assets. This means the husband receive $343,171 of the assets including the benefit of almost $80,000 his evidence was he has largely already spent.
Costs
The material prepared by both parties solicitors sought costs.
The normal rule in proceedings under the Act is that each party pay their own costs pursuant to s.117(1). However, the Court may make an order for costs if it is satisfied that in the particular circumstances of the case it should do so.
Section 117(2) of the Act provides that in an appropriate case the Court may make an order for costs against one or other parties notwithstanding the general rule in s.117(1). Section 117(2A) of the Act sets out the factors to which the Court shall have regard when considering an order for costs as follows:
“In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.”
The High Court in Penfold v Penfold (1980) 144 CLR 311 has said that the wording of that section does not create an onus on either of the parties. It is a matter for the Court in each case to consider, having regard to the matters in s.117(2A) of the Act, whether in a particular case to exercise discretion to order costs or not to order costs.
In summary, the effect of s.117(1) is that it abolishes the general rule in civil proceedings that costs usually follow the event. However, s.117(2) provides that the Court has a general discretion to make costs orders if there are, in its opinion, circumstances that justify it doing so.
Both parties sought costs. However neither party made submissions on the issue at the hearing. In the circumstances I will hear the parties on the issue of any application for costs.
Conclusion
At the commencement of the hearing it was pointed out to both parties as was said in Farmer & Bramley (2000) FLC 93-060 that:
“…it has to be said, that it is not generally possible in the exercise of the discretion under s.79 to say or to ascertain why a particular award is ultimately arrived at. Given that awards under s.79 are virtually never calculated with mathematical precision, no amount of enumeration of, or indeed of any of the matters listed in s.79(4), can ever explain exactly why a particular figure, or more usually a percentage, is eventually arrived at (other than that it is within the recognised “range”).”
In this case and doing the best I can on the material before me and for the reasons set out above, I am satisfied that the orders set out at the beginning of these reasons for decision are just and equitable.
I certify that the preceding one hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of O’Sullivan FM
Associate: Rachelle Lombardo
Date: 29 May 2009
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