SABRI & ABIDIN
[2013] FMCAfam 192
•12 March 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SABRI & ABIDIN | [2013] FMCAfam 192 |
| FAMILY LAW – Property – alteration of property interests – short marriage – assessment of contribution – assessment of s.75(2) factors – where equity in husband’s pre-marriage property increases substantially during marriage. |
| Family Law Act 1975, ss.75(2), 79, 90C, 117 |
| Browne and Green (1999) FLC 92-873 DJM and JLM (1998) FLC 92-816 Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Kowaliw and Kowaliw (1981) FLC 91-092 Norbis v Norbis (1986) 161 CLR 513 AJO v GRO (2005) FLC 93-218 Stanford v Stanford (14 November 2012) [2012] HCA 52 Townsend and Townsend (1995) FLC 92-569 |
| Applicant: | MS SABRI |
| Respondent: | MR ABIDIN |
| File Number: | SYC 5894 of 2011 |
| Judgment of: | Altobelli FM |
| Hearing dates: | 17 May 2012 & 22 January 2013 |
| Date of Last Submission: | 6 February 2013 |
| Delivered at: | Sydney |
| Delivered on: | 12 March 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms Pender |
| Solicitors for the Applicant: | J S Pinto & Co |
| Counsel for the Respondent: | Mr Weaver and Ms Snelling respectively |
ORDERS
That within 42 days of the date of these orders, the Respondent husband pay to the wife, by bank cheque, or as she may direct, the sum of $31,000.
That should the Respondent not comply with Order 1 above then the following orders apply:
(a)That the Respondent together with the Applicant do all acts and things and sign all documents necessary to forthwith place the property at Property B (“the [B] property”) on the market for sale by private treaty at a price agreed between the Applicant and the Respondent and failing agreement within two weeks of this order coming into effect, at a price equivalent to the mean of two current market appraisals by licensed Real Estate Agents, one obtained by and at the expense of the Applicant and one obtained by and at the expense of the Respondent, such appraisals to be made not more than two weeks apart from each other.
(b)That in the event that the house is not sold by private treaty within five (5) months of the date of this order, the Applicant and Respondent shall then forthwith take all steps necessary for the sale of the house by auction and in particular will:
(i)Place the house with [real estate agents omitted] (herein call “the auctioneers”) for sale by auction at the earliest possible date;
(ii)Execute all documents requested by the auctioneers for the sale of the house by auction;
(iii)Request the auctioneers to recommend a reserve price to be placed on the house for the purposes of the auction sale and accept such recommended reserve price;
(iv)Pay to the auctioneers any sums requested for advertising expenses in relation to the auction, on half of any such sums to be repaid by the Respondent to the Applicant from her share of the proceeds of sale;
(v)Attend the auction sale of the house and negotiate with the highest bidder in the event that the reserve price is not reached and accept the advice of the auctioneer as to the acceptance of a price less than the reserve price;
(vi)Execute a contract for sale;
(vii)Cooperate in every way with the auctioneers in relation to the auction of the house, including making a key available, allowing inspection of the house at times reasonably requested by the auctioneers and ensuring that the house is in a neat and clean condition at the time of inspection by the proposed purchasers;
(viii)Execute all other documents necessary to complete the sale.
(c)That the Respondent, together with the Applicant, shall do all acts and things necessary to procure that upon the sale of the house the proceeds of sale shall be paid in the following manner and priority:
(i)In payment of the agents commission and auction expenses, if any, due on the sale;
(ii)In payment of the legal costs of the sale;
(iii)In payment of the sum of $31,000 together with interest calculated in accordance with the Family Law Act, its rules and regulations, calculated from 42 days after this order) to the applicant, by bank cheque or as she may direct.
(d)Pending sale or transfer as aforesaid:
(i)The Respondent shall have exclusive occupancy of the house;
(ii)The Respondent shall pay all rates, taxes and outgoings on the house as they fall due;
(iii)The Respondent shall keep the house in good repair (fair wear and tear excepted);
(iv)The Respondent shall keep the improvements on the house insured against risk of damage by fire and storm and tempest, to its reinstatement value.
A declaration that, as against each other, each party is entitled to retain any other property which is in her or his possession as at the date of these orders, including superannuation interests.
That in the event that either party refuses, fails or neglects to comply with the provisions of these Orders, then pursuant to s.106A(1) of the Family Law Act, a Registrar be appointed to execute all such deeds and documents in the name of the defaulting party as may be necessary to give effect to these Orders and the defaulting party shall bear such costs as arise from the default.
IT IS NOTED that publication of this judgment under the pseudonym Sabri & Abidin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 5984 of 2011
| MS SABRI |
Applicant
And
| MR ABIDIN |
Respondent
REASONS FOR JUDGMENT
Introduction
By way of an application filed 26 September 2011 the applicant wife seeks orders under s.79 of the Family Law Act against the respondent husband to the effect that he pay to her $40,000, failing which the property that he owns at Property B, [B] be sold in order that she receive the said sum.
By way of a response filed 9 November 2011 the respondent husband seeks orders that the applicant wife’s application be dismissed, and that each party keeps what they have. By the close of evidence, however, the respondent husband’s position had moderated somewhat so that he was prepared to pay to the wife $1,000, characterised as “repayment of the balance” of a loan she made to him.
Background
This was a bitterly contested case, fought with childlike intensity, insensitivity, and without regard by the parties to any sense of proportionality. One suspects that a costs application may well flow once orders have been made. The evidence the Court heard about costs incurred in these proceedings suggest that both parties were so wrapped up in the emotional maelstrom of the breakdown of their short marriage, that they could not see how disproportionate this litigation was compared to what they were trying to achieve, let alone to be able to see what a tremendous waste of public resource this litigation was. Nonetheless, even adults acting like children are entitled to their day in court.
The wife is 33 years old, the husband 35 years old. Both were previously married. Both have two children from their previous marriages. The wife’s children live with her on a full-time basis and have little or no contact with their father. The husband’s children live with him three nights each week plus half of the school holidays.
The parties met in 2009, married in [omitted] 2009 and commenced cohabitation at the husband’s home in [B] in about [omitted] 2009. In June 2010 they moved into rental accommodation at [omitted]. The husband’s home at [B] was rented out, and the rental applied towards payment of the mortgage. The parties separated in April 2011. Cohabitation was, therefore, for one year and eight months. By any interpretation of the evidence, the relationship was an unhappy one. The husband and wife produced no children during their marriage.
It is the husband’s case, not seriously opposed by the wife, that they agreed to segregate their financial affairs during the marriage. It is the husband’s case, though contested by the wife, that the parties had agreed that no matter what happened to them they would each be entitled to their own property. Whatever the agreement was between the parties it was an oral agreement, at most. The parties did not enter into a binding financial agreement under the Family Law Act, though one was prepared. To the extent that there was an oral agreement about finances, the Court finds they did implement an arrangement whereby each of the husband and wife would contribute $350 per week into a joint account, to meet joint household expenses. The Court finds, however, that from time to time they each supplemented this with their own funds. It is also clear that each kept their own savings accounts.
As it turns out the idealistically simple arrangement that they had once contemplated did not work out. This is hardly surprisingly given the complexity of modern family life, let alone the logistical, emotional and financial challenges of a blended family, with each parent bringing with them their own “baggage” into the marriage. Certainly from the husband’s perspective this “baggage” included child support arrears from his first marriage, an ongoing child support liability, and significant costs associated with litigation with his former wife. From the wife’s perspective, this “baggage” included the burden of bearing all but $20 per week of the costs associated with her children’s living expenses, including one who had special needs.
As it turns out, the Court places no weight whatsoever on whatever the parties may have agreed to orally during their marriage. The statutory responsibility of the Court under s.79 is to assess contribution and future needs and determine a just and equitable outcome having regard to all of those diverse factors. If the husband wanted protection from a claim under s.79, the Family Law Act makes provision for this. He should have entered into a binding financial agreement. One was not signed. Jurisdiction under the Family Law Act has not been ousted. There is no injustice in this result. Whatever agreement may have been reached focussed on financial contribution only. Section 79 looks at a much broader range of factors: financial contribution, non-financial contribution, financial contributions in an indirect sense, homemaking and parenting contribution, as well as future needs. Even if the Court were to accept everything that the husband asserts in relation to the agreement, it would not bind the Court.
Evidence
The wife relied on her affidavit sworn 2 May 2012 together with a financial statement filed 26 September 2011. Her claim was supported by affidavits of two witnesses, Mr S, sworn 2 May 2012, and Ms L, sworn 3 May 2012. Each was cross-examined. The evidence of Mr S and Ms L did not assist the Court in determining this case, and no reference will be made to that evidence.
The evidence in the husband’s case consisted of his affidavits sworn 12 April 2012 and 8 November 2011. The husband’s case was also supported by affidavits of Mr M, Mr K, and Mr F. Only Mr F was required for cross-examination, other than the husband.
Applicable Law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances; and
The court acknowledges that the High Court’s recent decision in Stanford v Stanford (14 November 2012) [2012] HCA 52 may signal a departure from the approach described above. To the extent that this may be the case it has no bearing on the outcome of this case.
One of the legal issues that arises is whether the court should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to the court, in part or in whole. The discretion in this regard should be exercised having regard to the facts of this case.
In relation to add-backs, the applicable law can be found in decisions such as the Full Court's decision in AJO v GRO (2005) FLC 93-218 that describes the situations in which add-backs are appropriate.
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
31. As the Full Court said in Browne and Green (1999) FLC 92-873 at 86,360:
44. We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.
Impression of the Witnesses
Neither the husband nor the wife were impressive witnesses. Both were unresponsive in cross-examination at times, the husband more so than the wife. Both were uncooperative in cross-examination at times, the husband more so than the wife. Both, at times, were evasive in answers about financial matters. The wife presented, at times, as a bitter, resentful woman. The husband present, at times, as angry and resentful. When it comes to historical facts of a financial nature, the husband was a better historian. The wife conceded she was not good with numbers. Black and white dogmatic thinking permeated the evidence of both of them. Neither made any reasonable concessions about the other’s contributions. Each claimed that the other was guilty of nondisclosure, but neither succeeded in establishing this by any standard.
Let the Court be very clear about this: both the husband and the wife, who are otherwise intelligent, articulate, high-functioning adults, allowed emotion to cloud their judgment in relation to this case. Regrettably, some of this lack of judgment extended to their legal representatives. There was, for example, irrelevant material in the affidavits, and much irrelevant, unhelpful cross-examination by counsel.
Having made the above comments, this is not a case where the Court finds that either party was untruthful, or dishonest, but rather that emotion was allowed to cloud their recollection of the events. Where credit issues are relevant, findings will need to be made by reference to those issues.
Balance Sheet
The parties could not reach agreement about a balance sheet, which is perhaps unsurprising having regard to the comments above. Doing the best the Court can, and excluding any assets under the value of $1000, the Court makes the following findings about the balance sheet.
i)[B] property, owned by husband, $290,000 (agreed)
ii)St George Bank account, owned by husband, $1,465 (admission against interest)
iii)St George Bank account owned by wife, $6,544 (exhibit R1, cross-examination of wife 17 May 2012)
iv)Commonwealth Bank account, owned by wife, $1,466 (exhibit R2, cross-examination on 17 May 2012)
v)Wife’s household contents, $1,000 (agreed)
vi)Husband’s household contents, $1,000 (agreed)
vii)Wife’s loan to her brother, $50,000
The wife does not want this amount on the balance sheet. The husband says it would be inequitable to him not to have it there. The evidence is that most of the cash that the wife brought into the marriage was lent to her brother by way of an investment that failed. She expected to make a profit, but did not. She agreed in cross-examination that she could attempt to recover it, but has not. When asked to explain why she has not she said that she knew that there was a risk. She does not characterise the $50,000 as a debt owed to her. She characterises it as a loss. The Court is not satisfied with the wife’s evidence in this regard.
The Court is not satisfied that she has taken any, or adequate steps to recover this investment. The Court is not satisfied that the wife will not, in fact, recover this amount once these proceedings are concluded. She attempted in cross-examination to create a picture of an investment to which the husband agreed, and yet this was not put to him, and it is, in any event, an unlikely scenario on the facts of this case, that he would agree to share the loss and the profit.
The wife is an unsatisfactory witness about her financial affairs. Her financial statement was riddled with mistakes. She was cavalier about financial matters, and the Court finds that her evidence about this $50,000 was also cavalier. It must be added back in the asset pool as a notional asset. It is not enough just to treat it as a financial resource.
In such a small asset pool, the distortion that would be caused by the $50,000 not appearing on the balance sheet creates an inequity to the husband. His assets as at cohabitation are largely still intact. Hers are not so, correspondingly she contends that she must get a bigger share of his. To accept the wife’s case, and her evidence about the $50,000, is to make the husband an insurer or underwriter for this so-called investment. The Court is not prepared to do so.
The only equitable way is to treat this as an asset – a debt owed to the wife that she has not sought to recover. There is no satisfactory evidence before me to indicate to me that it is irrecoverable.
viii)Toyota Yaris owned by wife, $2,100.
After separation the wife gave her Toyota Yaris to her sister. She says it was in part repayment to her sister for [omitted]. The disposal of this motor vehicle is not otherwise disclosed. The husband contends that the wife in fact continues to drive this vehicle.
He contends that it ought to be added back at $11,500, being what he says is the value of the car. The wife estimates the value of the car was at $10,000 in August 2009. When she transferred it to her sister on 5 May 2011, the RTA notice discloses a consideration of $2100. The wife contends that she did not accept this money.
The transactions involving the Toyota Yaris constitute a premature distribution of assets. Whatever the wife’s reasons for so doing, it was not for her to deplete the asset pool as she has. The motor vehicle must be added back, but the issue is: at what value?
The husband says it ought to be the RedBook value. The Court is not prepared to accept the reliability of this contended value. In the circumstances the car will be treated as having a value of $2100, on the basis of the RTA transfer forms.
Total non-superannuation assets: $353,575
A number of other issues arise in relation to the balance sheet. The Court rejects the husband’s contention that the wife’s tax refund of 30 June 2012 should be added back onto the balance sheet. Separation was in April 2011. The Court can see no rational basis for its inclusion.
The Court rejects the husband’s contention about the wife’s jewellery. There is no evidence that the Court accepts relating to the value of it. The Court is not even satisfied that the wife has possession of it.
The Court rejects the wife’s contention that the husband is in fact in possession of jewellery. There is no evidence that the Court accepts to this effect, and there is certainly no evidence of its value, in any event.
The Court rejects the wife’s contention that the loan she made to the husband of $4,000 for his barristers’ fees in the family law proceedings of his first marriage should be treated as an asset, added back. The husband concedes that $1,000 of this is still owing to her. He offers to pay that as part of any order under s.79. The wife contends that none of it has been repaid. The Court accepts the husband’s evidence over the wife’s evidence in this regard. As previously stated, the wife is an unreliable witness in financial matters. The husband’s explanation is more plausible both as to the source of funds he used to repay the loan, and the fact of repayment as he asserts at paragraph 37 of his affidavit 8 November 2011.
This means the Court is satisfied that he has in fact repaid to the wife $3,000. However, it only complicates matters to treat this as an add-back. It is only $1,000. The Court will order the husband to pay this to the wife in addition to anything else that he may be required to pay.
The Court rejects the husband’s contention of add-backs in the sum of $20,440 and $4,370, being moneys withdraw by the wife from the accounts, as detailed in the husband’s counsel’s case outline. There is no evidence whatsoever to suggest that this was a premature distribution of assets, or that there is any other way to justify the inclusion of these moneys in the balance sheet.
Accordingly, and having regard to the above, the total assets, including notional assets, amounts to $353,575.
In addition, the husband has superannuation of $48,316 and the wife $37,000. The total is $85,316. These figures are agreed between the parties. Total superannuation assets amount to $85,316. Total assets of the parties thus amount to $438,891.
The only liabilities appear to be the mortgage to Citibank secured over the husband’s [B] property. The most recent and reliable evidence of the liability is dated 30 June 2012, exhibit R10, the amount being $69,052.
All of this means that the net assets available to the parties is $369,839.
Assets at Cohabitation
The wife contends in her affidavit of 2 May 2012 that at cohabitation she had cash of $52,000, a Toyota Yaris worth $10,000 and superannuation of $32,000. The husband did not put this in contention, and accordingly the Court accepts this. Her assets totalled $94,000.
The husband contends in his affidavit of 8 November 2011 that at cohabitation the equity in his property was $136,810, he had superannuation and $23,730, savings of $1115, and cash of $2000. In practical terms the last three items are not put in contention by the wife.
The issue is the quantum of his equity. The husband asserts that the value of the property was $270,000 in his affidavit, but in the section 90C agreement dated 2 September 2009 (exhibit A1) he represents the property to have been worth $250,000.
Given the context of the s.90C agreement and the earlier date of the represented value, the Court finds the latter figure to be a more reliable basis for the value of the husband’s property, and it is in any event an admission against interest.
In the husband’s affidavit he says the debt on the property was $133,000, but in the binding financial agreement it says $140,000. The Citibank statements (exhibit R10) state that in October 2009 the balance on the mortgage was about $130,747, which the Court will round off to $131,000.
This means the equity in the husband’s property was $119,000. His total assets at cohabitation amount to $145,845, rounded up to $146,000.
This means the total assets of the parties at cohabitation was $146,000 plus $94,000 equals $240,000. The husband clearly had more assets at cohabitation, in fact approximately 61 per cent compared to the wife’s 39 per cent.
Assessing Contribution up until the Date of Separation
The equity in the home at [B] increased from $119,000 at the commencement of cohabitation of $221,000 by the end of the relationship, a significant increase of $102,000 in a relatively short period of time.
In the same period the wife’s superannuation increased from $32,000 to $37,000, the husband’s $28,000 to $48,000. Both the husband and the wife worked full time throughout the marriage. Their incomes were not significantly different. After a few months of marriage they moved out of the husband’s home at [B] into rented premises.
The rental from [B] was used to pay the mortgage. The husband’s contention, not challenged by the wife, is that any shortfall as between the mortgage and rental was paid by the husband, together with any outgoings relating on the property, and out of the husband’s income.
The wife does not concede, of course, that these facts necessarily result in a finding that the contribution in this regard was made by the husband alone.
Each of the husband and the wife paid $350 per week into a joint account to cover household expenses and outgoings. Both the husband and the wife contend that they made extra payments from their own income to make up any shortfall. Given that their rental was $450 a week, and that at times there were four children in the household, this is hardly surprising.
A random look at the joint bank statements, exhibit R5, clearly demonstrates this. Thus, for example, if one looks at the week commencing 16 June 2010 they both contributed $350, rental of $440 was paid out, and the accounts record further payments of $174.74 for what seems like food and household items. The Court does not accept that this was the totality of the family expenses. The Court does not accept that this family lived on under $175 per week. It is interesting to note that in the husband’s financial statement 9 May 2012, at item 32, he claims that all other expenditure, which must include his living expenses, to be $350 per week. The reality in this case is that the husband and the wife incurred expenses in living that are not recorded in exhibit R5, the joint bank account. Even looking at other random weeks in these statements what is absent is any reference to expenses such as outgoings including electricity and telephone.
The Court finds that whilst each of the husband and the wife contributed to a weekly fund of $700 per week used to pay living expenses, their actual expenses were significantly greater than $700 per week. Both contributed to the shortfall between the $700 per week and the actual expenses. At this point their finances became intermingled. It is not possible to say exactly who paid what, nor as a matter of policy is it even desirable that those findings be made. Given the absence of any significant disparity in their incomes, it is more likely than not that they paid the shortfall equally, though not necessarily in the same amounts at the same time.
In view of the above the Court cannot accept the husband’s contention that he alone paid all of the costs of the mortgage and the outgoings on the [B] property, and that therefore the wife made no contribution to this. The husband’s argument is fallacious, artificial in the extreme, and ill-conceived. The reality is that there was an ebb and flow in this family’s finances, and that whilst the source of the funds used to actually pay the outgoings and mortgage shortfall came from the husband’s income, it was the wife’s income that contributed to the shortfall in weekly living expenses. There is an exception to this. The Court finds the husband’s father did in fact provide him with financial assistance of $9,000 in three separate tranches paid in September 2009, October 2010 and April 2011. As the Court has previously found, one of those tranches was used, in effect, to repay the wife $3,000 out of the $4,000 advanced by her to pay the husband’s counsel’s fees in his first proceedings.
In any event, the diversity and fluidity of other contributions in this relationship is apparent from the rest of the evidence of the husband and the wife. The child support the wife received from the father of her children was plainly insufficient to meet their living costs. The Court does not accept any contention that the costs of maintaining those children was borne by the wife alone, as if with some mathematical and logistical precision the husband and the wife in this case were able to ensure the joint account expenses were not used for the benefit of the wife’s children. The husband therefore contributed to the cost of supporting the wife’s children. The reverse proposition is also true – the wife contributed to the cost of supporting the husband’s children when they were with him. The contribution they each made as regards the other’s children is not limited to financial: they were all involved in a practical sense with aspects of care of these children. The Court finds that, on balance, the wife’s contribution in this regard was probably greater than the husband, but this is not to discount the husband’s role.
The artificiality of the husband’s argument about contribution is further demonstrated by his own evidence that he paid nearly $21,000 in child support, and $19,000 in legal fees for his first family law proceedings, during the period of the relationship. Given that this expenditure came out of the husband’s net earnings, it is sheer folly to accept his contention that he paid these expenses alone, without any direct or indirect, financial or non-financial assistance of the wife, with the exception of the $4,000 loan.
Despite the evidence of both the husband and the wife to the effect that the other made limited contributions as to homemaking and parenting, the Court finds that each contributed in this regard, though, on balance, the wife probably did more within the house, and the husband outside of the house.
The Court thus assesses contribution during the course of the relationship as being equal. Whilst the husband’s financial contribution might be slightly higher, this would be offset by the wife’s non-financial contribution.
Assessment of Contribution
Notwithstanding what has been stated above, the real and perhaps most difficult issue in this case is how, precisely, to assess contribution in a particularly short marriage where there is a disparity in the assets brought into the relationship, and where most of the assets are still intact? In other words, against which assets should contribution be assessed? This is a case where an asset by asset approach is to be preferred over a global approach.
The current equity in the home is $221,000. As noted above this increased from $119,000 at the commencement of cohabitation. How should contribution be assessed as regards this increase? The Court unequivocally rejects the husband’s contention that the wife’s contribution in this regard should be nil, for reasons that have been articulated above. The wife made some contribution to the increase in equity, but it could not be said to be half in circumstances where it seems common ground that the property itself increased in value from $250,000 to $290,000 (a matter in respect of which it could not be said the wife made a contribution, on the evidence), where the relationship was such a short one, and where on the evidence the husband has been solely responsible for all payments since the date of separation. In the circumstances, but having regard to the diverse contributions made by each of the parties during the period of cohabitation, the Court assesses the wife’s contribution to the increase in equity of the property at 30%. If the wife is allocated 30% of $102,000, it would require an adjustment in her favour of $30,600.
There are several bank accounts owned by each of the parties. In circumstances where a period has elapsed since the date of separation, and where each has had a substantial income, the Court finds that neither party contributed to the other’s bank accounts. The most likely scenario is that what is in the bank accounts today represent post separation earnings.
Each of the parties has household contents. There is no reason to make any adjustment in this regard.
The husband made no contribution to the loan that I find the wife has made to her brother.
The husband has made no contribution to the wife’s Toyota Yaris motor vehicle, which she clearly owned at the date of cohabitation.
The Court declines to make any order, or adjustment in relation to the husband and wife’s superannuation entitlements. Whilst the husband’s increased in value much more than the wife’s, there is no evidence before the Court to establish how much of the value was attributable to the post-separation period. Having regard to the compulsory nature of superannuation, it is artificial in a case where the relationship was so short to somehow to seek to assess one party’s contribution to the other’s superannuation.
Subject to a consideration of the relevant matters under s.75 of the Family Law Act, and the considerations of justice and equity, the wife would appear to be entitled to 30 per cent of the increase in the equity in the husband’s property. It would not be just and equitable to the wife to simply leave the assets as they are.
Section 75(2) Considerations
The husband contends that there should be no adjustment in this regard, but the wife, it seems, contends there should be a 10% adjustment. The wife’s case fails. She is young, and in good health. She has a good income, and good earning capacity. Her only financial statements sworn in this case shows a weekly surplus of $946 per week. For all practical purposes, she leaves the marriage with the assets she came in with, plus more. She has the care of her two children, but they are not children of the marriage for s.75(2)(c) purposes. She is debt-free, other than legal costs. What commitments she has, financially and otherwise, to support herself and her children are more than adequately met out of her income. There is no question that she has responsibility to care for her two children, one of whom has special needs, but there is no cause on the facts of this case to visit responsibility for this on the husband who, in any event, has responsibility to pay child support for his two children. The wife is in receipt of family tax benefits for her children. There is no evidence to suggest that her standard of living has declined or is unreasonable. It was a short marriage that has not affected her earning capacity. Her desire to parent is unaffected by these orders. The actual impact of the proposed orders is to give her over $30,000 that she did not have at cohabitation, to recognise the diverse contributions that she made in the marriage. Having regard to all of these matters, no adjustment under s.75(2) is warranted in her favour.
Just and Equitable
Is it just and equitable for the husband to be ordered to pay to the wife the sum of $30,600, together with the further $1,000 that he himself offers and acknowledges as being the loan outstanding to his wife? The Court finds that it is just and equitable. Despite the formidable debts for legal fees that the husband had at cohabitation and during the marriage pertaining to his family law proceedings, and despite his ongoing child support liability throughout the marriage, the husband’s asset position at the end of the marriage is considerably better than it was at the beginning, and is certainly superior to that of the wife. As discussed above, he has considerably more equity in the home. His super has increased in value. He no longer has fees attributable to his first court case, but does have legal fees relating to these proceedings. His financial statement sworn 9 May 2012, suggests a weekly surplus of income over expenditure at $300 per week. He appears to be saving money. He is in a much better position now, even allowing for a payment to the wife in a sum over $30,000. Having regard to all the matters set out in these reasons, the Court finds the proposed order to be just and equitable.
Costs
It may well be that a costs application will follow from the orders that I make. Any party wishing to seek costs should make submissions in writing not exceeding 500 words, to be filed and served within 14 days. Any submissions in reply, likewise in writing and not exceeding 500 words, should be filed and served within a further 14 days.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Date: 12 March 2013
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