Sawden and Ball
[2016] FCCA 1246
•20 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SAWDEN & BALL | [2016] FCCA 1246 |
| Catchwords: FAMILY LAW – Settlement of de facto property – no dispute regarding existence of relationship but controversy surrounding when it commenced – relationship produced one child now aged nineteen – parties received extensive financial support from relatives – how is that support to be characterised now – as a gift or debt – significance of other contributions over length of relationship – assessment of section 90SM factors – assessment of section 90SF(3) factors – justice and equity. |
| Legislation: Family Law Act 1975, ss.4(1), 4AA(1), 90SE, 90SF(3), 90SG, 90SM, 90SM(1), 90SM(3), 90SM(4), 90RD(1), 90RD(2) Evidence Act1995 (Cth) s.140 |
| Cases cited: Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 Bevan & Bevan [2013] FamCAFC 116 Stanford v Stanford [2012] HCA 52 Watson & Ling [2013] FamCA 57 Ferraro & Ferraro (1992) 16 FamLR 1 Waters & Jurek (1995) FLC 92-635 D & D [2003] FamCA 473 In re: Watson: ex parte Armstrong (1976) FLC 90-059 Mallett & Mallett (1984) FLC 91-507 Fox v Percy (2003) 214 CLR 118 at 129 Calverley v Green(1984) 155 CLR 242 Markoska & Markoska [2011] FamCA 572 Kessey & Kessey (1994) FLC 92-495 Pierce v Pierce (1999) FLC 92-844 MH & MZ (2005) FLC 93-226 Rushton & Rushton [2011] FMCAfam 1259 NHC & RCH (2004) FLC 93-204 Norbis v Norbis (1986) FLC 91 712 Ferguson & Ferguson (1978) FLC 90-500 Steinbrenner & Steinbrenner [2008] Fam CAFC 193 Clauson & Clauson (1995) FLC 92-595 |
| Applicant: | MS SAWDEN |
| Respondent: | MR BALL |
| File Number: | ADC 1527 of 2014 |
| Judgment of: | Judge Brown |
| Hearing dates: | 15, 16 & 17 February and 8 April 2016 |
| Date of Last Submission: | 8 April 2016 |
| Delivered at: | Adelaide |
| Delivered on: | 20 May 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Heinrich |
| Solicitors for the Applicant: | Armour & Allen |
| Counsel for the Respondent: | Ms Morosini |
| Solicitors for the Respondent: | Di Morosini & Co |
ORDERS
The applicant Ms Sawden (hereinafter referred to as “the applicant”) and the respondent Mr Ball (hereinafter referred to as “the respondent”) do all things necessary and execute all required documents within fourteen days of the date of these orders, to transfer from their joint ownership to the ownership of the applicant alone, at the applicant’s expense, their interest in the Toyota Corolla motor vehicle registered number (omitted).
Within fourteen days of the date of these orders the respondent deliver to the location nominated to him by the applicant or her solicitor, at the expense of the applicant, the following items of property:
(a)crystal and glassware received from the estate of the applicant’s grandmother;
(b)bakeware, also received from the estate of applicant’s grandmother;
(c)the applicant’s hard drive;
(d)the applicant’s mountain bike and helmet;
(e)X’s baby book with personal diary and attachments;
(f)other documents relating to X, particularly her court and hospital files;
(g)the applicant’s personal documents;
(h)digital photo frames, photo albums from the applicant’s childhood and from the parties’ relationship;
(i)X’s play station.
In the event that the respondent wishes to have copies of any of the photographs referred to in order 2(viii) above, which relate to the period of the parties’ relationship, he is to inform the applicant within a period of fourteen days of the date of these orders, of the photographs of which he wishes to have a copy and the applicant is thereafter directed to have copies made of the nominated photographs, provided it is technically possible for them to be copied, at the joint expense of the parties.
Subject to the provisions of these orders, the applicant retain for her sole use and benefit absolutely free from any further claim or demand of the respondent the following items of property and financial resources:
(a)the Toyota Corolla motor vehicle registered number (omitted) referred to in order one hereof;
(b)her personal effects and furniture currently in her possession;
(c)the items referred to in order 2 hereof;
(d)her superannuation entitlements standing in her name with (omitted) – account number (omitted);
(e)any monies standing in the applicant’s name in any banking institution together with any financial resources, shares and investments in her name not otherwise specified in these orders.
Subject to the provisions of these orders, the respondent retain for his sole use and benefit absolutely free from any further claim or demand of the applicant the following items of property and financial resources:
(a)his interest in the real property located and known as the Property Y farm, situated at Property Y in the state of South Australia and being the whole of the land contained in Certificate of Title Volume (omitted) Folio (omitted) (hereinafter referred to as “the Property Y farm”);
(b)his interest in the chattels associated with the Property Y farm including the Great Wall utility motor vehicle, the tractor, the motor cycles, Toyota Landcruiser motor vehicle, trailers, wire spinner and all livestock currently being grazed on the property;
(c)his personal effects and furniture currently in his possession;
(d)his superannuation entitlements currently standing in his name;
(e)any monies standing in the respondent’s name in any banking institution together with any financial resources, shares and investments in his name not otherwise specified in these orders.
In the event that the respondent wishes to retain the property located and known as Property W in the State of South Australia and being the land contained in Certificate of Title Volume (omitted) Folio (omitted) (hereinafter referred to as “the former family home”) he is ordered to pay the applicant the sum of $208,816.16 within forty-two (42) days of the date of these orders subject to the applicant and the respondent each retaining the items of property delineated in orders (4) and (5) hereof respectively.
In the event that the respondent does not wish to retain the former family home he is to advice the applicant to this effect within 28 days of the date of these orders and thereafter within a further 14 days of that the parties are ordered to do all things necessary to place the former family home on the market for sale with an estate agent to be agreed between them and failing agreement to be as nominated by the President (or his nominee) of the Real Estate Institute of South Australia, at a price to be as agreed but not less than $325,000.00.
Upon the settlement of the sale of the former family home pursuant to order (7) hereof, the proceeds of sale be distributed as follows:
(a)Firstly, in payment of the commission due to the selling agent concerned;
(b)Secondly, in payment of all legal costs relating to the sale;
(c)Thirdly, so that the remaining proceeds of sale are distributed equally between the parties taking into account the value of the superannuation to be retained by each party and the value of the Toyota motor vehicle to be retained by the applicant and these items in value and the proceeds of sale be divided 50% to the applicant and 50% to the respondent.
Concurrently with the payment referred to in order (8)(c) hereof the respondent pay to the applicant out of his portion of the proceeds of sale of the former family home the sum of $72,835.00.
All applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Sawden & Ball is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 1527 of 2014
| MS SAWDEN |
Applicant
And
| MR BALL |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant in these de facto property proceedings, Ms Sawden was born on (omitted) 1978. The respondent Mr Ball, was born on (omitted) 1977.
The parties met in (omitted) 1995. They were both seventeen years of age at the time. In (omitted) 1996, Ms Sawden discovered that she was pregnant. On (omitted) 1996, the parties’ only child X was born. Her birth was several weeks premature.
The parties disagree as to the precise date from which they began to live together as a couple. The applicant, Ms Sawden asserts it was before X was born. The respondent, Mr Ball asserts that it was in late 1998 when X was around two years of age.
There is, however, no dispute that the parties finally separated in January of 2014, in difficult and unhappy circumstances. Accordingly, on any view the relationship was one of significant length – somewhere between sixteen and eighteen years in duration. It was also a significant relationship for obvious reasons, because of the birth of X.
Given their youth when the parties met, it is not controversial that neither the applicant nor the respondent had had sufficient time in the workforce to acquire assets of significant value through their own personal endeavour when they became involved with one another.
The most significant aspect of this case turns on how moneys advanced by the parents of each of the parties is to be taken into account and treated in the case. This is a difficult exercise because of the paucity of records now and the significant level of animosity and mistrust which exists between the Sawden family on the one hand and the Ball family on the other.
In these circumstances each party has attempted to reconstruct their financial history together for the purposes of these proceedings. Necessarily, given the tensions between them it is inevitable that there will be something of a self-serving gloss on each of these reconstructions.
Essentially, the respondent asserts that his father was the source of the preponderance of funds which have been translated into the parties’ pool of assets now potentially available for division. He further claims that he remains indebted to his father for these advances which have the character of loans rather than gifts.
The applicant concedes that the respondent’s father did provide seed capital which helped the parties start out financially. However, she asserts that she and her family also made significant contributions of money during the lengthy relationship between the parties. She refutes any suggestion that there is any legal liability by way of loan from either her or Mr Ball to the respondent’s father.
Rather, what monies were advanced by the respondent’s father should now be regarded as being analogous to a financial contribution attributable to the respondent. It is her case that when her overall contributions and those attributable in this way to Mr Ball are calculated they are roughly even.
The difficulty, however, from her perspective is that the major relevant items of real property remain registered in the respondent or his father’s name. She asserts that this was done with the intention of protecting the respondent against claims such as the one she has instituted in these proceedings.
There is no doubt that there is an extremely close relationship between the respondent and his father. From Ms Sawden’s perspective, she is concerned that these ties of blood are being utilised to reduce her proper entitlements and discount the many contributions both financial and otherwise she has made during the course of a long and significant relationship.
These proceedings are intended to resolve the various disputes between the parties and as far as is possible, finalise their financial relationship with one another so that each may move on with the remainder of their lives.
Background
In 1996, Mr Ball worked on a PAYG basis as a (occupation omitted) at (employer omitted). He remained with (employer omitted) until October of 2004. Thereafter, he began his own business – (business omitted). The business has not always provided a regular income for him. Since 2013, Mr Ball has declared no income at all for taxation purposes.
In 1997, Ms Sawden was in receipt of social security. In 1998, she returned to school to complete her secondary education. This enabled her to go onto tertiary studies at the University (omitted). She completed a (qualifications omitted) in 2001. She also worked at (employer omitted) during the course of her studies.
Ms Sawden has demonstrated an aptitude for (employment omitted). In 2007, she completed a (qualifications omitted). In July 2015, she completed a (qualifications omitted). She has been employed at the (employer omitted) since (omitted) 2002. Since that date her annual income has steadily increased with her experience and improved qualifications.
It is Ms Sawden’s position that her income during the relationship has been channelled into joint family purposes which have benefited not only her but also Mr Ball and X. However, this income has not been specifically tied to the acquisition of assets particularly items of real property. Rather, it has gone on the parties’ generic living expenses and she has supported Mr Ball when his income has been modest.
The pool of property potentially available to be divided between the parties has a net worth of around $885,000.00. The major components of this pool are two pieces of real property – the former family home located at Property W and a farm located at Property Y. The Property W property is registered in Mr Ball’s sole name. The Property Y farm is registered in the name of the respondent and his father, Mr J, as joint tenants.
It is the respondent’s position in these proceedings that his father Mr Ball Senior essentially advanced all moneys required to acquire these two properties, on the proviso that he would be paid back in full. In round terms, Mr Ball asserts that he owes his father approximately $682,000.00.
It is Ms Sawden’s position that whilst she concedes Mr Ball Senior did provide moneys which facilitated the purchase of not only the Property W property and the Property Y farm but also the parties’ first family home at Property M, these moneys were not advanced as loans to the respondent or to her.
From her perspective if the court adopted the formulation proposed by the respondent, it would represent a significant injustice to her as her significant financial and non-financial contributions provided as a homemaker and a parent during the parties’ lengthy relationship would be rendered effectively nugatory.
It is her position that this formulation is essentially a ruse devised by the respondent and his father, to frustrate her proper entitlements for property settlement. It is her further position that there is scant, if any documentation to support the extent of the loans alleged by the respondent and Mr Ball Senior and in any event, a significant proportion of the alleged debts are now statute barred from collection.
In the submission of Mr Heinrich counsel for Ms Sawden, that the proper approach for the court to take in respect of the moneys advanced by Mr Ball Senior is to treat them as contributions attributable to the respondent. In this way a proper and equitable assessment may be made of the various contributions arising under section 90SM(4) of the Family Law Act 1975.
In this context, Ms Sawden points to the fact that Mr Ball Senior has not sought to be joined as a party to these proceedings, although it is demonstrably the case that he is fully aware of them and of their possible financial implications for him personally. It is also Ms Sawden’s position that the respondent has overstated the extent of the moneys advanced by Mr Ball Senior during the parties’ lengthy relationship with one another.
The respondent does not ostensibly accept that he is not significantly indebted to his father. Rather, it is his position that he and Mr Ball Senior kept an accurate record in writing in an exercise book referred to them as the tally book. The tally book has assumed totemic importance in these proceedings.
The respondent alleges that following separation on 29 January 2014, whilst he was distracted, the applicant in the company of her brother and father, misappropriated the tally book from a filing cabinet located at the former family home.
Ms Sawden dismisses this allegation as another gratuitous fabrication on the part of the respondent designed to buttress his case and sully the reputation of her and her family. In these circumstances, it is her position that the respondent and Mr Ball Senior will go to extreme lengths including illegitimate ones to ensure that her proper claim is defeated.
It is a normal incident of life that parents wish to benefit their children. Mr J is a retired (occupation omitted) aged in his late sixties. He has a keen eye for property which can be bought cheap and then redeveloped at a profit utilising his skills and connections in the building industry. My impression of him is that he is accustomed to living on his wits. He is also a person to whom the ties of family particularly with his offspring, are everything.
During the course of the parties' relationship, Mr Ball Senior was involved in the purchase and development of two properties which were subsequently subdivided and in which the parties later lived. Firstly, Property R and secondly, Property W which was the parties’ former family home and remains the property which the respondent continues to occupy. It was from this property that the tally book was allegedly removed.
Property R was purchased in (omitted) 1996, about a year after the respondent had celebrated his eighteenth birthday. The land had a transportable dwelling on it. It is Ms Sawden’s case that she moved into this dwelling soon after it was purchased, living initially in the transportable home which she shared with the applicant and a mutual friend, Mr L. Both the applicant and Mr L refute this assertion.
The property at Property R was purchased for $65,000.00.[1] There is no dispute that Mr Ball Senior provided the whole of this sum as the respondent had no savings of his own. However, the property was registered in the respondent’s sole name. It is the respondent’s evidence that the moneys were advanced to him by his father on the basis that he would repay the sum of $150.00 per week from his wages, unless he was short of funds. The loan was to attract no interest.
[1] See exhibit K
In (omitted) 1998, the property was sub-divided into two blocks, each of which remained registered in the respondent’s name. The transportable house was sold and removed. The applicant asserts it was sold for $30,000.00. The respondent for $10,000.00. No documents exist to support either party’s contention in regards to the sale price of the transportable home but the parties agree that Mr Ball Senior received these proceeds.
Mr Ball Senior funded the construction of a dwelling on each of the subdivided and cleared blocks at Property M. No records exist now for the court as to what was precisely spent on these various enterprises. In his affidavit evidence the respondent deposes as follows:
“My father provided all the money to fund the building of the new house. The total amount provided by him in addition to the original purchase price of $68,000.00 was approximately $120,000.00.”[2]
[2] See Affidavit of the respondent filed 27 October 2015 at paragraph 44
Mr Ball Senior deposes as follows:
“The Property M property was divided into two blocks and I built two houses. The agreement between Mr Ball and myself was that he would move into Property R1 and I would sell R2 and keep the proceeds of sale to repay me the funds I provided to purchase the property and the construction of the two houses on it.
Mr Ball commenced making repayments to me on a regular basis until the property was sold in 2008. By that time Mr Ball had reduced his loan to $130,000.00.”[3]
[3] See Affidavit of Mr J filed 27 October 2015 at paragraphs 24 - 25
It is the positon of the respondent that a record was kept in the tally book of the building costs which also included a record of the regular weekly repayments made by him. It is the position that if the tally book could be found it would support this figure.
The parties and X moved into the newly constructed Property R1 property in (omitted) 1998. In (omitted) 1999, the respondent sold Property R2 for the sum of $152,500.00.[4] It would seem more likely than not that Mr Ball Senior received the proceeds of sale of Property R2. However, no independent documentary evidence particularly in the form of a bank statement has been produced to indicate precisely where the monies went.
[4] See exhibit A
It is the applicant’s position that she was kept largely in the dark about these transactions. She asserts that the respondent provided labour for his father when both Property R1 and Property R2 were being constructed. It is her view that when the respondent sold Property R2, it was at a considerable profit which extinguished any debt, if any, including any moral debt to Mr Ball Senior.
Mr Heinrich has attempted to reconstruct a table of the funds advanced by Mr Ball Senior in an effort to calculate what was the debt owed by the respondent to his father at the time Property R2 was sold. This calculation is based on the assumptions that the respondent did pay his father the sum of $150.00 per week from 1996 onwards and Mr Ball Senior retained the full proceeds of sale of Property R1.
Mr Heinrich calculates the amount of the advance from father to son as being $188,000.00, less the sale of the transportable home ($10,000.00); the proceeds of sale of Property R1 ($152,500.00); and 12 years of loan repayments of $7,800.00 per annum ($93,600.00).
On this basis he submits that any liability to Mr Ball Senior was well and truly discharged prior to 2008 and indeed, if the respondent did indeed pay his father $150.00 per week, more often than not he was in fact around $60,000.00 in credit with his father.
However, it seems to me to be on balance likely that the applicant did not always make the weekly payments or that his moral indebtedness to his father, was taken into account in other ways, which included the respondent working for his father from time to time.
The difficulty with the calculation is that it makes no allowance for Mr Ball Senior to share in the profit arising from the subdivision enterprise and benefit from the input of his labour and acumen into the enterprise. In my assessment, these issues did not greatly trouble Mr Ball Senior at the time.
From his perspective, his son was his effective surrogate and therefore it mattered not to him where the profits fell as long as they were in the control of a blood relative whom he wished to benefit in a general way. It seems to me to highly probable that the issue of these various advances has become much more significant to him following the acrimonious separation of Ms Sawden and the respondent and there has arisen the danger of these profits benefitting someone who has fallen outside the immediate family.
The parties lived as a family at Property R1 until 2008. It is the applicant’s case that he continued to pay his father regular payments of $150.00 per week which were recorded in the tally book. If this is correct, the applicant paid his father an amount of up to $7,800.00 per annum.
It is Ms Sawden’s evidence that she was never told anything about these payments; saw none of the applicant’s financial documents; and knew nothing about the tally book. In these circumstances, she strongly disputes this evidence.
Whilst the respondent worked at (omitted), until 2004, Ms Sawden asserts that he regularly worked for his father on weekends after hours and during holiday periods. Mr Ball Senior performed small scale building works such as constructing pergolas and doing repairs. He also had his own rental properties which needed maintenance. As previously indicated, it her evidence that he also worked on the construction of both dwellings on the Property R site.
In these circumstances, it is Ms Sawden’s evidence that the applicant was a considerable resource for his father but was rarely paid for his labour and when he was paid, it was in small amounts of cash which were used for such things as groceries. In addition, she asserts the respondent’s labour also benefitted Mr Ball Senior when he received the proceeds of sale of Property R2. Following the commencement of Mr Ball’s self-employment as a (occupation omitted), Ms Sawden asserts that he continued to work in this way for his father.
Mr Ball, in consultation with Ms Sawden, took out a loan secured against the Property R property for approximately $100,000.00 (“the (omitted) home loan”) in mid-2005. The amount was used to purchase a Land Cruiser motor vehicle and a Corolla motor vehicle, which were used by the applicant and the respondent respectively.
The (omitted) home loan was increased by a further $15,500.00 in September 2005. The interest only on the loan was between $600.00 and $700.00 per month.[5] The evidence indicates that during the currency of the (omitted) home loan, the principal was only marginally reduced.[6]
[5] See exhibit 3
[6] See exhibit B5 to the applicant’s affidavit filed 27 October 2015
The records relating to the (omitted) home loan indicate that the regular interest payments required to service it were regularly transferred from the account into which Ms Sawden’s wages were also paid. At the time, in the early stages of the (omitted) business, Mr Ball’s income was extremely limited. In these circumstances, I accept that Ms Sawden made significant contributions in a financial sense towards the maintenance of this loan.
A similar web of complexity surrounds the acquisition of the parties’ former family home, at Property W. This property is registered in the respondent’s sole name. Again, Mr Ball asserts that his father provided a significant component of the funds which led to the acquisition of the property and as a consequence, he (the respondent) remains indebted to his father.
Mr Ball Senior acquired the property at Property W, part of which became the parties’ former family home in (omitted) 2003. The purchase price was $130,000.00, all of which was sourced from Mr Ball Senior.[7] The nature of the property was similar to that at Property M in that it contained an older dwelling which was ripe for subdivision.
[7] See exhibit B
In (omitted) 2007, Mr Ball Senior transferred 1/100th of his interest in the Property W property to the respondent. The consideration expressed for the transfer was “desire to transfer”.[8] As such, the transfer attracted nominal stamp duty. On 5 October 2007, the respondent and Mr Ball Senior applied to subdivide the property at Property W. Mr Ball Senior retained Property W1 whilst the respondent retained Property W2. The consideration expressed for the subdivision was described as follows:
“Desire to effect a partition and for no other consideration.”[9]
[8] See exhibit C
[9] See exhibit D
Details regarding how the Property W property was developed and particularly how much it cost to do so are scant. It is clear that independent dwellings were constructed on each of what became Property W1 and Property W2. Ms Sawden asserts that Mr Ball Senior engaged a builder (omitted) to construct the two dwellings. No contract documents have been provided in this respect. However, both the respondent and Mr Ball Senior assert that the building costs for the building of Property W1 were $140,000.00.
No evidence has been provided as to the costs of the dwelling constructed on Property W1. However, in (omitted) 2008, Mr Ball Senior sold Property W1 for the sum of $300,000.00. Ms Sawden believes that the residence on the property was smaller than Property W2 and therefore cost less to construct.
Ms Sawden’s evidence is that she did not want to move into Property W1 and was kept in the dark by the respondent and Mr Ball Senior, about the intricacies of the transaction in question. It is also her evidence that when it became clear that the respondent was intent on moving to Property W1, she demanded that her name be included on the title, which demand the respondent angrily rejected.
Against this background, the respondent elected to sell Property R. The property sold for $385,000.00. After the payment of expenses and the discharge of the (omitted) home loan ($114,023.72) a net sum of $260,535.71 was ostensibly released to the respondent. However, the respondent concedes that the full amount was forwarded to his father on (omitted) 2008, allegedly to fund the purchase of the land at Property W1 and the construction of the dwelling on it.
No independent documentary evidence is available to support the respondent’s assertion supported by Mr Ball Senior, that as at the date of the sale of Property R, he owed his father $130,000.00, which he repaid, leaving him only a sum of approximately $130,000.00 to invest in the new property located at Property W1.
During the course of the hearing, the respondent conceded that he had retrospectively calculated this sum at a later stage and it was not one based on any actual reconciliation of financial documentation. For reasons on which I will elaborate upon in due course, it seems to me to be the case that the respondent and his father took a very ad hoc approach to their financial relationship, which was based on a mutually held desire for them to help one another and a shared trust.
As previously indicated, on Mr Henrich’s calculations, the respondent had well and truly discharged any liability to his father by this stage, by virtue of his weekly payments and the profitable sale of Property R. However, the seed capital which enabled the respondent to purchase the property in the first place, undoubtedly came from Mr Ball Senior who had not been specifically repaid, although he had benefitted from the sale of Property R.
In these circumstances, it seems to me to be likely that both considered that there remained some form of non-specific moral obligation arising because of this state of affairs. It is my impression that Mr Ball Senior is likely to be a person who approaches financial matters, particularly with blood family members, by the rule of thumb.
In his trial affidavit, Mr Ball provides the following details of his acquisition of Property W1:
Loan for land $140,000.00 Building costs for the dwelling $140,000.00 Total $280,000.00 Less surplus proceeds of Property R (rounded) $130,000.00 $150,000.00 Veranda construction costs (2009) $15,000.00 Front fence and gate costs (2010) $4,000.00 Total $169,000.00[10] [10] See affidavit of the respondent filed 27 October 2015 at paragraph 60
The difficulty with these assertions is that the value ascribed by the respondent for the land is not supported by any independent evidence. Certainly, the value is not supported by the relevant transfer documents. What the evidence available indicates is that both Property W1 and W2 as a whole were purchased by Mr Ball Senior in 2003 for $130,000.00.
I accept that it is highly probable that the land would have appreciated over a period of around five years between the date of its purchase and its partial transfer to the respondent. However, the fact remains that there is no evidence to support the respondent’s evidence in this regard apart from his assertion that this was the value agreed upon by him and his father at the time of the subdivision. In any event, this valuation was not provided to the relevant authorities for stamp duty purposes.
Similar considerations arise in respect of the assertion by the respondent that the building costs of Property W2 were $140,000.00. There must have been some costs obviously but what, if any, was saved by reason of the respondent and Mr Ball Senior performing some of the work if they did do so is entirely unclear to me.
Mr Ball Senior sold Property W1 on (omitted) 2008, for the sum of $300,000.00. In my assessment, Mr Ball Senior is a (occupation omitted) of some acuity. It seems improbable to me that he would have sold this property on terms financially disadvantageous to him. It also seems likely that he would have wished to benefit his son, daughter-in-law and granddaughter, by assisting them to secure accommodation with the minimum level of financial indebtedness being incurred by them.
The parties have arranged for Property W2 to be professionally valued by Mr W. As a consequence they agree on its current valuation for the purposes of these proceedings. Mr W has valued the property at $325,000.00. It is not subject to any mortgage.
On 18 August 2008, Dr A performed a colonoscopy on the respondent and diagnosed him as suffering from diverticulosis. Thereafter, he has had treatment for an inflamed anal fistula in December 2008; and a perianal abscess in December 2010.
In October of 2015, his general medical practitioner, Dr B indicated that the respondent had suffered from diverticular disease since about 2007 and his condition was permanent. The symptoms of his disease were described as being:
“Persistent and severe, recurrent bowel symptoms, urgency, pain and occasional incontinence. There are severe complications from diverticular disease (most people would not experience these complications).”
Dr B opined that these symptoms would affect Mr Ball’s capacity to work or study for more than 24 months.[11]
[11] See annexure B11 to the respondent’s affidavit filed 27 October 2015
No further medical evidence has been provided by the respondent. However, it is the respondent’s evidence that his condition made it difficult to continue his business as a self-employed (occupation omitted). The evidence of Mr Ball’s tax returns indicates a decline in income from 2005/2006 onwards. He had no taxable income for the financial years ending 30 June 2013/2014. In September of 2015 his ABN for (business omitted) was cancelled.
This was the background to the purchase of the Property Y farm, which is an 84 hectare rural property. It too has been valued by Mr W, together with the stock and plant on it. He values the real property of the farm as being worth $710,000.00, which both parties accept. The property was purchased for $656,000.00 in August 2012.
The respondent and Mr Ball Senior are the joint proprietors of the property. After the payment of stamp duty and related expenses, the total amount required to secure the property was $694,861.46. There is no dispute that Mr Ball Senior advanced the entire amount of this sum from his savings. It was not necessary for him to borrow any money.
Mr Ball Senior’s evidence is that the Property Y farm is to be his retirement home. He is a widower. In time, he plans to construct a home on the property. At one stage prior to the parties’ separation, he envisaged them also living in that dwelling or a related structure. Mr Ball Senior has an expectation that his son will provide his care in his old age when he requires it. The respondent recognises this obligation.
The respondent and Mr Ball were also desirous of finding a piece of property which would provide some form of long-term income for each of them. Ms Sawden was also involved in these plans but to a much more limited degree. She was part of the process of selecting a suitable property and visited the Property Y farm on several occasions prior to its purchase to inspect it.
The respondent and Mr Ball Senior considered that the Property Y farm was suitable for their joint purposes. They planned to stock it with (omitted) which the respondent could manage. It is the respondent’s position that his health difficulties are such that he cannot return to the conventional workforce. However, the grazing of (omitted) is an activity which he asserts is within his “health limitations”.
Ms Sawden does not accept that the respondent’s health difficulties are as severe as he currently portrays them. It is her position that Mr Ball has voluntarily withdrawn from the workforce in order to frustrate her claim for property settlement. In the terminology of her counsel, Mr Heinrich, Mr Ball’s decision to work at the Property Y farm is a “lifestyle choice”. The respondent is not currently entitled to any social security payment.
Mr Ball also purchased a flock of (omitted) for the farm at a cost of $80,000.00; a tractor for the sum of $24,500.00; and a Great Wall utility motor vehicle for the sum of $24,800.00. These have also been valued recently. It is agreed that the farm plant and various vehicles are worth $53,000.00, whilst the (omitted) are now worth $8,200.00.
It is the evidence of both the respondent and Mr Ball Senior that Mr Ball Senior has loaned his son half of the purchase costs of the Property Y farm ($342,500.00). It is also their evidence that the respondent is indebted to his father in the sum of $40,000.00, in respect of the purchase of the (omitted) and a further sum of around $50,000.00, in respect of the purchase of the tractor and utility.
Ms Sawden is dubious regarding the authenticity of these various alleged transactions. She accepts that records from Mr Ball’s bank account indicate that he provided the entire amount of the purchase price of the Property Y farm. She also accepts that he provided the entire amount ($24,800.00) required to acquire the Great Wall utility vehicle. No documentary evidence has been provided in respect of the purchase of the (omitted). The contract of sale, for the Property Y farm is in the name of Mr Ball Senior or his nominee.[12]
[12] See exhibit 5
In particular, Ms Sawden points to the lack of any formal loan documents between Mr Ball Senior and the respondent. In all these circumstances, it is Ms Sawden’s submission that it is more likely that Mr Ball Senior intended to gift his son the interest in the Property Y farm on the basis that he would manage the property in conjunction with Mr Ball Senior until Mr Ball Senior became too infirm to continue. On Mr Ball Senior’s death, the respondent would inherit the entirety of the farm through survivorship.
This scenario fits with Ms Sawden’s understanding of the arrangement between her former partner and his father. She asserts that the respondent wanted her to reduce her work hours as a (occupation omitted) so she could take up the management of the (omitted) farm whilst the respondent and Mr Ball Senior did the physical work required on the farm.
On this basis, Mr Ball Senior and the respondent would build a two storey house on the farm with two distinct floors, one of which the parties would live on and the other would be Mr Ball Senior’s home. This arrangement was envisaged as providing self-sufficiency for all concerned. However, from Ms Sawden’s perspective, she had no intention of giving up her career as a (occupation omitted) which she loved.
With the withdrawal of the respondent from the workforce after the Property Y farm was acquired in August of 2012, Ms Sawden’s income was central to the financial support of the respondent. It was also utilised from time to time to pay expenses relating to the running of the farm. By way of example, in May of 2013, Ms Sawden paid expenses of $1,200.00 in respect of the running of the farm.[13]
[13] See annexure DS8 to the applicant’s affidavit filed 13 October 2015
In 2011, the parties and X took a three month holiday in (country omitted). The impression I have after hearing evidence from both parties concerned, is that it was the trip of a lifetime. It is Ms Sawden’s evidence that she purchased plane tickets and train fares through a salary sacrifice scheme offered by her employer. In addition, as a consequence of her saving annual leave, she was able to fund a significant proportion of the cost of the trip. She has not kept records in respect of these various amounts. It is also her case that she incurred some holiday expenses on her credit card which she later paid.
In the context of these proceedings, Mr Ball Senior and the respondent have asserted that the former provided the sum of $35,000.00 towards the cost of the (country omitted) holiday which he (Mr Ball Senior) regarded as a loan. Ms Sawden agrees that Mr Ball Senior did advance some moneys for the trip but it is her case that she was never advised how much the sum was and it was her understanding that it was a gift rather than a loan.
In 2013, shortly prior to the parties’ separation, X went on a school trip to (country omitted). Again, Mr Ball Senior asserts that he funded this trip advancing the moneys to his son with the intention that the sum would be repaid. Mr Ball Senior also asserts that he has paid $12,000.00 of Ms Sawden's HECS debt which he again asserts is a loan to him.
Ms Sawden resolutely refutes that there is any such liability on her part to Mr Ball Senior in respect of any HECS liability incurred by her. It is her case that she paid her education expenses through tax payments regularly deducted from her salary from 2003 onwards.
The respondent and Mr Ball Senior assert that the latter is owed the following amounts by either the parties jointly or by the respondent alone:
Loan for purchase of Property W2 $169,000.00 Loan for half of Property Y farm $347,000.00 Loan for half of (omitted) herd $40,000.00 Loan for tractor $24,500.00 Loan for Great Wall utility motor vehicle $24,800.00 Loan for farm running costs $25,000.00 Loan for (country omitted) holiday $35,500.00 Loan for Ms Sawden's HECS debt $12,000.00 Loan for X's (country omitted) trip $5,000.00 Total $682,080.00
As previously indicated, if these various sums are accounted as a debt to Mr Ball Senior, it would mean in effect that there are few, if any assets to be divided between the parties as a consequence of these proceedings. From Ms Sawden’s point of view, this would entirely artificial and unfair to her as it would mean that her extensive contributions as both a wage earner and a homemaker/parent are negated.
Between 1996 and 2015, Ms Sawden calculates that she has earned just under $700,000.00, at an average of $35,000.00 per annum which has all been utilised for joint family purposes. On the other hand, she calculated that Mr Ball has earned approximately $410,500.00, at an average of $20,525.00 per annum. Over this period her income has steadily increased, whereas Mr Ball has ostensibly declined until his income has been reported for tax purposes to be nil. As such, it is her case that she has become more and more central to the family’s support over time.
It is Ms Sawden’s position that the various significant sums advanced by Mr Ball Senior over the years should be regarded as gifts made to advance the respondent and indeed her to some extent. As such, they cannot now be effectively re-called and re-labelled as debts. In this context, she submits that the respondent and his father are cynically attempting to ensure that her significant contributions are rendered of no consequence and their evidence should be dismissed by the court as self-serving and unreliable.
Ms Sawden further submits that if the various sums advanced by her and her parents are tabulated including the income generated by her, they come to a figure not too far divorced from the sums contributed by the respondent through his more modest income and the monies advanced by Mr Ball Senior to acquire the various pieces of real property which are registered in the respondent’s name solely or jointly with his father.
Mr Heinrich has calculated these sums as being $725,703.80 for Ms Sawden and her family; and $816,133.29 for Mr Ball and his family. However, it is also Ms Sawden’s case that the non-financial contributions made by her and her family both before and after separation, have been significantly greater than those of Mr Ball and his family. In this context, she points to the fact that Mr Ball has paid her little if any child support and has occupied the former family home rent free since the parties separated.
It is on this basis that Mr Heinrich submits that the pool of assets, which he asserts should include Property W2, the Property Y farm and the assets associated with it, all to be regarded as essentially debt free, should be divided equally between the parties or if there is to be any deviation from such equality, it should favour his client because of the superiority of her non-financial contributions.
In round terms, Ms Sawden seeks the payment to her of the sum of approximately $345,000.00, predicated on the basis that Mr Ball retain the former family home and his interest in the Property Y farm if he so wishes. However, in the event that Mr Ball cannot generate sufficient funds to secure this outcome, Mr Heinrich contends that Mr Ball should bear the costs of petitioning the Property Y farm property so that his (the respondent’s) interest in the property can become accessible.
It is Mr Ball’s position that his various health issues disqualify him from working full time either as a paid employee or self-employed as a (occupations omitted), as he has done previously. As such, it is his case that his future lies in helping Mr Ball Senior manage and run the Property Y farm and the (omitted) herd on it which will leave him financially dependent on his father. For these various reasons, he opposes the sale of the Property Y farm.
It is his case that as a consequence of his health factors and Ms Sawden’s superior qualifications, Ms Sawden will be materially better off than him in a financial sense for the foreseeable future, as she has secure and well-paid employment as a (occupation omitted) whereas he will be dependent upon his father. The evidence indicates that currently Ms Sawden earns around $92,000.00 gross per annum.[14]
[14] See Exhibit J – Ms Sawden’s payslip for period between 25 January & 7 February 2016 showing gross fortnightly salary of $3,562.80 and year to date of $70,427.97.
Mr Ball concedes that Ms Sawden is entitled to a settlement of property with him by dint of their long relationship. However, it is his position that the reality of the situation is that there is only the former family home available to be divided as the Property Y farm and the assets related to it are his property in name only, as they effectively belong to Mr Ball Senior, who provided all the money to acquire them. As such, they should be excluded from the pool of assets.
Mr Ball accepts that Property W2 should be sold and Ms Sawden should receive a portion of the proceeds. However, he asserts that from any proceeds of sale the monies allegedly owing to Mr Ball Senior ($169,000.00) should be deducted and the remainder then divided equally between the parties. He does not quibble that Ms Sawden should retain her superannuation entitlements ($87,439.00) and the motor vehicle currently in her possession – a Toyota corolla, valued at $9,000.00.
On rough calculations, Ms Sawden would receive $78,000.00 less one half of the costs of sale. She would also retain her superannuation and motor vehicle. Mr Ball contends that this would be a just and equitable outcome given his modest income earning capacity and his considerably lesser stores of superannuation ($45,110.00).
From Ms Sawden’s perspective, this would be a farcical result given her view that the various debts allegedly owed to Mr Ball Senior are fictitious in nature which have been concocted by the respondent and his father to defeat or frustrated her proper claim for property settlement.
It is also the submission of her counsel, Mr Heinrich, that the respondent has made a life style choice not to pursue some form of paid employment either as a direct wage earner or through some form of self-employment, which is not based on his poorly defined and exaggerated health deficiencies. Again she asserts that he has chosen to engage in running the Property Y farm at no apparent wage only to frustrate her claim.
Mr Ball Senior and the respondent contend otherwise asserting that the tally book allegedly purloined by Ms Sawden from the former family home if available now, would set out in exhaustive detail the monies owed to Mr Ball Senior. It is also the respondent’s position that he is engaged in the Property Y farm for legitimate reasons and is otherwise precluded from pursing more lucrative forms of employment.
In his evidence, Mr Ball Senior portrayed himself as a person of modest means who had not saved for his retirement through conventional means, such as superannuation. It is his position (Mr Ball Senior) that he has need of the monies allegedly owing to him to fund his retirement. He also supported his son’s evidence that assisting in managing the (omitted) herd at the Property Y farm is likely to be the only form of occupation which the respondent can pursue.
The Legal Principles Applicable
Part VIIIAB of the Family Law Act is the part of the Act dealing with financial matters relating to de facto relationships. The major provisions relating to de facto property division are contained in sections 90SM(1); 90SM(3); 90SM(4); & 90SF(3) of the Act. The operation of these provisions is dependent upon the existence of a de facto relationship between the parties concerned which in term is subject to satisfaction of criteria related to temporal factors and geographical considerations.
In this case there is no dispute that the relationship, between the parties occurred within a participating jurisdiction (South Australia) and is amenable to the Commonwealth legislation because of the date on which it ended (early 2014). As such, although the parties disagree as to when the relationship between them began, it is agreed that the court should make a declarations as to the existence of such a de facto relationship.
The power to make a declaration as to the existence or otherwise of a de facto relationship, arises pursuant to section 90RD(1) of the Act. Pursuant to the section, if an application is made pursuant to any of sections 90SE, 90SG or 90SM following the breakdown of a de facto relationship: “the court may, for the purpose of those proceedings … declare that a de facto relationship existed, or never existed [between the applicant for such a declaration and another specified person]”.
The court’s authority to make such a declaration is refined by section 90RD(2) which, as well as making reference to the other jurisdictional preconditions pre-conditions referred to above, provides that the court with the power to make declarations regarding the following:
·The period or periods of the de facto relationship;
·Whether there is a child of the de facto relationship;
·Whether one of the parties to the de facto relationship made substantial contributions;
·When the de facto relationship ended;
·Where each of the parties to the de facto relationship was ordinarily resident during it.
These provisions contained in section 90SM are analogous to the provisions applicable to matters relating to the division of property and spousal maintenance of married individuals contained in Part VIII of the Act, particularly section 79. Accordingly, the same jurisprudence is applicable to be both sets of provisions.
Pursuant to section 90SM(1), the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a de facto relationship in relevant property.
The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to section 90SM(3) the court is actively prevented from making an order altering proprietorial interests unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “shall not” in the relevant section.
Section 90SM(4) provides the mechanics of how a court is to make an order altering de facto property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered as relevant.
Paragraphs (a); (b); and (c); categorise contributions made by de facto partners which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the de facto relationship concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 90SF(3) which are germane to maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of both de facto and matrimonial property cases was said to be well settled as it required the application of a preferred approach. This approach entailed a four step process, described by the Full Court as follows:
· identification and valuation of the property of the parties;
· identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 90SM(4) (a) to (c) or section 79(4) (a) to (c);
· identification and assessment of the various matters in section 90SM(4) (d) to (g) or 79(4)(d) to (g) including to the extent they are relevant, the matters in either section 90SF(3) or 75(2), as applicable – the prospective needs phase;
· considerations of justice and equity.[15]
[15] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]
The general applicability of this four step process has been recast, to some extent, in the light of what has been said recently by the High Court in the matter of Stanford v Stanford.[16] In the case, the majority stated that:
“It will be recalled that s 79(2) provides that "[t]he 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". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [17]
[16] Stanford v Stanford [2012] HCA 52
[17] Ibid at [35] – [36]
In Stanton the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of section 79(2) (and by necessary implication section 90SM(3)) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation. The majority said as follows:
“In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4).” [18]
[18] Ibid at [42]
In Bevan the Full Court noted that the above paragraph was likely to encapsulate the vast majority of cases coming before courts such as this one, namely that the circumstances of the parties concerned, following the end of the marriage (or de facto relationship) between them, made it readily apparent that it was just and equitable to make a property order and therefore it would be open to the court concerned to adopt the multi-stepped process endorsed by cases such as Hickey.
In Bevan the majority of the Full Court (Bryant CJ and Thackeray J) said as follows:
“Although the High Court did not disapprove the four step process, we accept it did not approve it either... However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
…
Stanford will also serve as a reminder that the four step process ‘merely illuminates the path to the ultimate result’.”[19]
[19] See Bevan (supra) at [65] and [71]
From this I take it, the four step process remains a valid approach in the vast majority of cases, provided care is taken not to overlook the requirement that all orders altering property interests in proceedings arising under the Act be justice and equitable.
In this case, it is abundantly clear that firstly, there was a de facto relationship between the parties and it has now incontrovertibly come to an end and as such, there is no longer any logical justification for them holding any joint community of property together.
Accordingly, although there is a dispute between the parties as to the precise date on which their relationship began, in my view it is clearly just and equitable that an order be made altering their proprietorial interests pursuant to the mechanisms provided by section 90SM(4).
In these circumstances, I am satisfied that it is appropriate to adopt the four step process in this case and it is in accordance with notions of justice and equity that the court proceeds to make orders pursuant to section 90SM of the Act, in respect of the parties’ various proprietorial interests.
Although the multi-step process envisaged by Hickey remains relevant it is less prescribed as a consequence of what was said by the High Court in Stanford. In this context, I respectfully adopted was said by Murphy J in Watson & Ling namely:
“As a result of those matters, the Court’s approach to s 79/s 90SM may be less compartmentalised than what a strict or unthinking adherence to four (or three) “steps” might otherwise reveal. The task is essentially holistic; is it just and equitable in the particular circumstances of the particular relationship or marriage under consideration to make an order and, if so, its terms must similarly meet that criteria. Of course, holistic though the approach is, it must be referenced to what the Act requires and care must be taken to ensure that the Court’s reasons make that clear.”
As was discussed by the Full Court in Bevan, whether it is just and equitable to make any particular property order is invariably inextricably interwoven with questions of contribution arising under either section 90SM(4) or 79(4) and the parties’ financial and relationship history with one another.
Although the court must be careful not to combine issues arising under section 90SM(3)/79(2) with the exercise arising under section 90SM(4)/79(4), it is artificial to divorce them from each other. Section 90SM(3)/79(2) does not, however, represent a formal threshold to be crossed prior to the undertaking of the section 90SM(4)/79(4) exercise.
Rather, the overall task is a holistic one to be informed by the idiosyncratic circumstances of each case concerned. However, in most cases it will be readily apparent that it is just and equitable to make an order altering the property interests of the parties concerned because of their circumstances or the manner in which each has presented their case and the orders sought.
In Stanton, the High Court in its first proposition indicated that in determining whether it was just and equitable to make any particular property order, it was necessary to identify the existing legal and equitable interests of the parties in the property. The High Court itself emphasised the word existing.
In this case, the relevant existing property includes the former family home located at Property W2, as well as the respondent’s interests in the Property Y farm and the stock, plant and equipment related to it. These items are not to be excluded from the court’s considerations merely because the applicant has no legal interest in them or alternatively because it is claimed Mr Ball Senior has significant interests in them. However, it would appear to be the respondent’s position that it is not just and equitable to make orders, in respect of these items of property because of the interests of his father in them.
Contributions arising pursuant to section 90SM(4)(a)(b) & (c) (the so-called second step) can be broadly categorised under two headings. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly by or on behalf of a party to the de facto relationship to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship, including any contribution made in the capacity of home maker or parent.”[21]
[21] See Family Law Act s 90SM(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.[22]
[22] See Ferraro & Ferraro (1992) 16 FamLR 1 at 38
Section 90SM(4) requires that the court look at the entirety of the contributions, both financial and non-financial, as they relate to the welfare of the family as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense.
Section 90SM(4)(e) mandates the court to have reference to the matters listed in section 90SF(3)(e) of the Family Law Act 1975. In the main the factors there listed deal with each of the parties’ prospective needs (the so-called third step).
Pursuant to section 90SF(3)(r), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. A number of Full Court authorities have utilised this provision to ensure that proper regard is had to a variety of considerations in order to ensure a just and equitable outcome in property proceedings.
The “overriding requirement” of section 90SM is that considerations of justice and equity should inform the process envisaged therein. The exercise I must undertake is not a “process of social engineering”[23] or of equalisation of assets or financial resources. Considerations of this type inform the so-called fourth step, as well as providing the determination as to how the court should approach issues such as notional property. The court must make the orders it considers just and equitable.
[23] See Waters & Jurek (1995) FLC 92-635
As such, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property which is not open to challenge or incapable of different interpretation. My responsibility is to exercise the discretion reposing in me according to considerations of justice and equity.
De facto relationships, such as the one between the parties in this case which is many years in duration, must be regarded as being in the nature of a joint enterprise. How much buffer partners in such a relationship must give one another when financial setbacks occur, must depend on the degree of consultation and acquiescence in their relationship.[24]
[24] See D & D [2003] FamCA 473 at paragraph 49
The task set out for me in this case requires me to balance and compare contributions which are by their nature different within the framework of the de facto relationship concerned. Many contributions in a lengthy de facto relationship such as being a homemaker do not result in the direct acquisition of assets. They are also difficult to value but they add significantly to the nature and quality of the relationship under consideration in the case concerned. The discretion I have is a wide one. It is however not an exercise in “palm tree justice”.[25]
[25] See In re: Watson: ex parte Armstrong (1976) FLC 90-059 at 75,270
In this context, the following comments of Gibbs CJ in Mallett & Mallett [26] are apposite:
“Decisions in particular cases of that kind can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the Court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.”
[26] Mallett & Mallett (1984) FLC 91-507
The relevant issues arising in the case
The factual issues and associated legal considerations arising in this case can be summarised as follows:
·What is the applicable date from which a de facto relationship subsisted between the parties;
·What was their respective level of asset backing at this time and what is its significance if any in these proceedings;
·What have been the financial contributions of Mr Ball Senior toward the acquisition of property and how are those contributions to be classified now – as loans due from the parties or as contributions referrable to the respondent;
·Is it possible to quantify how much monies the respondent repaid to his father over the course of the parties’ relationship;
·What contributions have been made by members of the applicant’s family and what is their relevance now;
·What have been the respective financial contributions of the parties (other than those referrable to family members) during the course of their relationship and what has been their significance;
·What have been the parties’ respective contributions in the capacity of homemakers and parents during their relationship;
·What is the relevance of any post separation contributions;
·What are the likely prospective needs of the parties. In particular, what is their likely respective level of income earning capacity and is there sufficient evidence to indicate that the respondent has been precluded from earning an income and is likely to remain so because of issues relating to his health;
·In this context, what is the relevance of the respondent’s indication that he intends to remain working at the Property Y farm with his father;
·Did Mr Ball Senior and the respondent keep a written record of their financial dealings with one another in the form of the tally book;
·If so, what is it likely to have recorded and what is its relevance to these proceedings;
·If there was such a tally book, is it possible for the court to conclude to the requisite standard of proof, that it has been purloined by the applicant or a person related to her;
·If is established that the applicant purloined the tally book what inference can the court draw from that finding. In particular, can it be inferred that the applicant is aware of the alleged debts to Mr Ball Senior and wishes to frustrate them;
·Contrarily, if the court determines that the tally book did not exist or was not as extensive in its nature as the respondent and his father contend, can it be inferred that the respondent and Mr Ball Senior have concocted their account of the book to frustrate Ms Sawden’s legitimate application.
The evidence
In these reasons for judgment, findings of fact are made on the balance of probabilities from my observation of the demeanour of each of the witnesses concerned.[27] I have tried to reach my conclusions on credibility and reliability on the basis of contemporary materials, objectively established facts and importantly, on the apparent logic of events.[28]
[27] See Evidence Act1995 (Cth) at s.140
[28] See Fox v Percy (2003) 214 CLR 118 at 129 [31] per Gleeson CJ, Gummow and Kirby JJ
In addition, I bear in mind s.140(2) of the Evidence Act, which indicates that in applying this standard of proof, I am entitled to consider the nature of the subject-matter of the proceedings and the gravity of the matters alleged.
The applicant relies on the following affidavit material:
i)Two affidavits of herself filed on 13 October 2015 and 5 February 2016 respectively;
ii)A statement of her financial circumstances filed on 13 October 2015;
iii)An affidavit of her father Mr D, filed on 21 October 2015;
iv)An affidavit of her mother Ms W, filed on 21 October 2015;
v)An affidavit of her brother Mr G, filed on 1 December 2016.
Mr D’s evidence dealt with his care of X when she was an infant and his financial assistance to Ms Sawden both prior to the parties’ separation and afterwards, in the form of payment of her legal fees. He was also present on the evening when the tally book was allegedly removed.
Ms W provided evidence regarding her understanding of the nature of the parties’ relationship with one another before and after X was born in 1996. She also gave evidence as to monies she advanced to the applicant, including from the estate of her mother. Mr G was also present on the evening relevant to the tally book.
The respondent relies on the following affidavit material:
i)Two affidavits of himself filed on 27 October 2015 and 7 December 2015 respectively;
ii)A statement of his financial circumstances filed on 27 October 2015;
iii)An affidavit of his father Mr J filed on 27 October 2015;
iv)An affidavit of Mr L filed on 27 October 2015.
Mr L worked with the respondent at (omitted) in 1995/6. He later lived with the respondent at the Property M property. It is his evidence that Ms Sawden never lived at the property. An affidavit deposed by Ms K, the respondent’s sister, was also filed. She deposed having a financial relationship with her father which enabled her to purchase a property. She asserted that her father had loaned her money to this effect. I ruled that this evidence was not relevant and she did not give further evidence.
Ms Sawden seemed to me to be a methodical and careful person, who was at times somewhat pedantic in her evidence. She has kept relevant financial documents, particularly in respect of her recurrent income. She seemed to have a reliable memory in respect of financial matters.
I found her to be a credible witness who made concessions when appropriate. By way of example, she conceded that Mr Ball provided care for X when she was on night shifts. In addition, she accepted that Mr Ball did 80% of the cooking although she also said that she did all of the vacuuming and 80% of the washing. As such, she did not appear to be a person whose objectivity was influenced by any particularly strong emotions.
Mr Ball is not a sophisticated person in financial terms. In his evidence, he deferred to his father’s superior business experience and portrayed himself as something of a financial naïf. In this context, it is implicit in his evidence that he himself did not keep any records independently of those allegedly kept by his father.
As such, he was not able to recount what he had repaid his father or explain exactly what sums had been advanced by his father and the basis of his father’s calculations as to what was owed to him (Mr Ball Senior) in respect of the sale of properties and so on and so forth. The import of the respondent’s evidence is that if Mr Ball Senior said what a particular figure was, he (the respondent) accepted the accuracy of that figure.
Mr Ball Senior was an impassioned witness, who resented any suggestion that either his recollection of events or his evidence generally was not accurate. He is clearly a person who values the virtues of hard work and family ties. Although I accept that he is a person of some business acumen, my impression is that he is not a great one for keeping extensive or rigorous financial records.
Mr Ball Senior no longer holds Ms Sawden in high regard. He remains close to the respondent and is undoubtedly protective of his interests. Accordingly, it seems probable that any mental arithmetic which he has carried out in respect of these matters is likely to favour him and his son rather than Ms Sawden.
In all these circumstances, Mr Ball Senior is likely to have a tendency to shape his evidence to favour his son’s position. The respondent is likely to be carried along with him in this regard. On balance, I consider that the applicant is likely to be a more reliable witness than the respondent and his father.
I found Mr D, Ms W and Mr G to be credible witnesses, particularly so far as the circumstances surrounding the alleged taking of the tally book. Mr G, in particular seemed to be a very decent person who went to the former home with no ulterior motives other than to try and defuse a very difficult and awkward situation between the parties following their painful separation. It seems to me to be highly implausible that he was part of a conspiracy to pilfer informal financial records to benefit his sister and prejudice his former de facto brother-in-law.
a)When did the relationship commence between the parties
In my view, this is not a particularly important issue in the overall scheme of things. The parties met when they were very young and both particularly Ms Sawden, were dependent upon their parents at this stage of their lives. Ms Sawden’s pregnancy was a difficult occurrence at the time for all concerned. In all these circumstances, it is hardly surprising that there is no clear point of demarcation indicating precisely when a de facto relationship began.
In addition, I must bear in mind that all concerned are being asked to cast their minds back to events which occurred nearly twenty years ago. In these circumstances, it is inevitable that memories will have faded. It is also highly probable that the acerbic nature of the relationship between the parties will have had an influence in shaping any required reconstruction of those memories for the current proceedings. Necessarily Ms Sawden and those associated with her favour the earlier date, whilst Mr Ball and those associated with him favour the later one.
It seems clear that the parties met in (omitted) 1995 and the relationship between them quickly became a sexual one. I accept Ms W’s evidence that Mr Ball was welcome to sleep over at her home several nights per week sharing a bedroom with the applicant. Ms W also frequently provided him with an evening meal. Ms Sawden discovered that she was pregnant with X in (omitted) 1996.
Up until this time, the parties had clearly been significantly involved with one another as boyfriend and girlfriend. They do not seem to have had any long term plans and lived day by day unburdened by any complex financial considerations. Ms Sawden’s pregnancy added a level of seriousness to the relationship.
I accept that Ms Sawden moved into the Property R property shortly after it had been acquired and prior to the removal of the transportable home, in (omitted) 1996. During this period the parties lived as a couple sharing expenses. In this respect I prefer the evidence of the applicant to that of Mr L and the respondent. It seems to me to me more probable than not that, given the nature of the relationship between the parties and their ages at the time, they would have wanted to spend as much time as possible with one another, particularly at night.
X was born significantly premature. She was not released from hospital for approximately four months following her birth. Ms Sawden was discharged a few days after the birth and returned to live at Property R until the transportable home was sold. She then returned to her mother’s home in (omitted) 1997, whilst visiting X daily in hospital. Mr Ball also visited regularly and lived at Mrs Sawden's home time to time as had occurred before. X came home to Ms W’s home in early (omitted) 1997.
At this time, Ms Sawden was on unpaid maternity leave. She had little financial support from Mr Ball. She applied for a single parent pension. Mr Ball spent some nights with Ms Sawden and other nights at his mother’s home. Mr Ball was assessed to pay child support for X. These interventions were pragmatic in nature and in my view, do not indicate a cessation of the relationship between the two. They remained a couple, sharing a bedroom several times a week. They also had a shared responsibility for X.
X’s early infancy was traumatic. She was a sickly child. In (omitted) 1997 she suffered unexplained subdural hematomas which led to departmental involvement. Ms Sawden was required to live with X in supported accommodation for a number of months. This situation led to pressures arising in the parties’ relationship with one another. I accept that they separated for some months in the latter part of 1997.
They did however remain in close contact with one another and from time to time after October 1997, resumed sleeping over with one another. Later that year they decided to resume their relationship and try to make a go of it for the sake of X. I accept that Ms Sawden and X moved into the newly constructed dwelling at Property R in (omitted) 1998. The parties remained living as a couple, on a genuine domestic basis,[29] thereafter until their final separation in January of 2014. Accordingly, in my assessment, the parties’ relationship as a de facto couple pre-dates the respondent’s acquisition of the Property R property.
[29] See Family Law Act section 4AA(1)
In my view, Mr Ball Senior is likely to have had mixed motivations for wishing to purchase the property at Property R in his son’s name. These included benefitting the respondent on him attaining the age of eighteen years which occurred in (omitted) 1995. However, Mr Ball Senior also has an eye for a bargain and a development opportunity. He would not have been minded to take unnecessary risks with his capital or to purchase a property which he did not think had potential to turn a profit for him.
Accordingly, it took some time for a suitable property to be found. The property concerned had to be the right price; be capable of subdivision at a profit; as well as providing somewhere for the respondent to live. Most significantly, it had to be capable of advantaging both the respondent and Mr Ball Senior. There would have been a sense of quid pro quo between the two men. I also accept that as the respondent’s girlfriend, Ms Sawden has some in-put into the selection of the property but this in-put was limited as the suitable property was chosen by the respondent and Mr Ball Senior, particularly the latter.
It is the evidence of Mr Ball Senior that, at least in part, he purchased the Property Y farm to provide some form of livelihood for his son because the respondent’s medical condition precluded him from any alternative form of employment, either on a full-time or part-time basis. I do not accept this assertion, which I believe to be grossly exaggerated. Rather, it is my finding that the respondent as a matter of preference, has chosen to work on the Property Y farm in order to assist his father and because he enjoys the rural lifestyle.
In his evidence to the court, Mr Ball indicated that he had installed fences on the farm and done other heavy labouring in respect of the (omitted). I accept that he has suffered from a difficult bowel condition which at times is both uncomfortable and potentially embarrassing for him.
However, the evidence provided in respect of this condition is scant indeed. As such, I do not accept that Mr Ball is permanently precluded from either operating his own (omitted) business or seeking some other form of unskilled work say as a (omitted) on a PAYG basis. In addition, I am unable to see why Mr Ball could not resume the (omitted) business given his extensive experience in that area of enterprise.
The parties have both accumulated superannuation during the course of their respective working careers. As a consequence of her longer and more conventional employment, Ms Sawden has accrued superannuation to the value of $89,147.67 as at 12 October 2015. Mr Ball has accrued superannuation of $45,110.00 as at 30 June 2015.
Neither party seeks to split off any of this superannuation in favour of the other. In these circumstances, I will include the superannuation in the parties’ pool of assets. There is no controversy that all of it was essentially acquired during the period of the parties’ lengthy relationship.
Step One – the pool of assets
On the basis of the findings provided above, I find that the parties pool of assets consists of the following items:
Assets
$
Property W
325,000.00
Property Y (half interest)
355,000.00
Farm, plant and equipment
53,000.00
Livestock
8,200.00
Toyota Corolla motor vehicle
9,000.00
Superannuation
(Applicant)
(Respondent)
89,147.67
45,110.00
Total
$884,457.67
What is important to note from this table is that no liability is included on the part of either party, either individually or jointly, to Mr Ball Senior. In addition, I have not included any sums relating to the parties’ current bank accounts as there is no contemporary evidence available to me. I also intend to exclude the respondent’s guns, ammunition and related items which the applicant has valued at $2,000.00, as there is evidence supporting this valuation.
In addition, for reasons on which I will elaborate, I think this total amount to be somewhat misleading. This is as a consequence of the diametrically opposing approaches the parties have taken to the case. Mr Heinrich seeks that the sum of $884,457.67 be divided equally between the parties. Ms Morosini contends that this figure is eroded by debt owed to Mr Ball Senior and the only funds available for division are represented by the former family home.
Step Two – assessment of contributions
The various and different contributions of the parties must be assessed and weighed against the background of a relationship which lasted many years and produced X. On any view, the relationship is one of significant length.
The difficulty arising in this case is that approximately $400,000.00 of the property pool of $884,457.67 is in the form of the Property Y farm and the items related to it. These items came into the pool of assets at a late stage and largely as a consequence of the actions of a person Mr Ball Senior, who is not a party to the proceedings.
Accordingly, it is my view that the nature and extent of the parties’ contributions to the assets relating to the Property Y farm are different in nature and form to their contributions provided towards the remaining items of property. In this context, in assessing the parties’ contributions towards the acquisition of the assets of their relationship, it is necessary to consider whether the court should adopt a global approach or an asset by asset approach.
In the former, the court assesses the parties’ contributions to their assets in a total or comprehensive manner. In the latter, the court assesses the parties’ contributions to individual items of property. Both approaches are legitimate, however the High Court has held that the global approach is generally more convenient particularly when it is necessary for the court to assess contributions which are different in nature.[43]
[43] See Norbis v Norbis (1986) FLC 91 712 at 75,268
Clearly, the most important consideration in whether to adopt a global or asset by asset approach is which approach is more conducive to achieving an outcome which is just and equitable. Factors which have been identified as influencing such a decision include the duration of the marriage in question and how the parties themselves have dealt with any particular item of property during it.
In this case, I am satisfied that Mr Ball Senior was motivated to acquire the Property Y farm as an inducement for the respondent (and to a certain extent Ms Sawden) to move in with him on the property to provide him with care in his old age. The corollary of this engagement being that when he died the farm would pass to the respondent. However, Ms Sawden was not particularly amenable to this proposed arrangement and was not greatly consulted about it.
In my assessment, her contributions to the Property Y farm have been limited. She has never lived or worked there for any extended periods of time. She has however provided some funding to keep the farm going from time to time but this funding has been significantly less than that provided by Mr Ball Senior.
In my view, the major motivating forces behind the farm have always been Mr Ball Senior and the respondent. It has been their project. Ms Sawden has indirectly and perhaps unwillingly subsidised the respondent’s engagement with the property from time to time.
In these circumstances, I have come to the view that it is just and equitable to assess the parties’ contributions to the two groups of property, the Property Y farm and related items on the one hand; and the former family home and the other chattels, including superannuation other hand; in separate and distinct ways.
The contributions of Mr Ball Senior which are attributable to the respondent for the sake of these proceedings in the form of the parties’ first home provided when they were each young and new parents was very important. Without it, they would have been forced into rented accommodation and their overall situation would have been financially precarious. However, since that time, Ms Sawden has made very significant and varied contributions.
I am satisfied that during their relationship both parties worked hard in a variety of capacities. At different times, both the applicant and the respondent have been the family’s main breadwinner. It is important that during the relationship as a whole, Ms Sawden has earnt significantly more than Mr Ball. This must be balanced against the importance of Mr Ball Senior’s provision of the Property R property.
In addition, I am satisfied that both parties have provided parenting for X and undertaken their fair share of domestic duties. It is significant that with the acquisition of her (omitted) qualifications, Ms Sawden’s salary has by and large be greater than Mr Ball’s has been and there is no doubt that it has always been used for joint family purposes.
Since Mr Ball went into self-employment, his wage has become less and less reliable. Ms Sawden is now somewhat resentful about this state of affairs. However, it seems to me that Mr Ball commenced (business omitted) with at the very least, Ms Sawden’s passive acquiescence. As such, the business must be considered a joint enterprise.
As previously indicated, it is part of the incidents of a long de facto relationship that the partners to it provide financial support to each other including in circumstances of setback. As I say, I am satisfied that (business omitted), although it was not always successful, was a joint enterprise. Mr Ball was committed to it and although she may have done so with gritted teeth, Ms Sawden was prepared to provide him with the necessary financial buffer.[44]
[44] See D & D [2003] FamCA 473 at paragraph 49
For the reasons I have already provided, I am satisfied that by the time Property W2 was purchased by the parties, the weight to be attributed to Mr Ball Senior’s gift to the respondent which must be regarded as a contribution emanating from the respondent’s side of the ledger, had been well and truly matched by the various contributions emanating from Ms Sawden. Accordingly, I assess the parties’ various contributions to the items of property other than those associated with the Property Y farm as being essentially equal.
Issues relating to the Property Y farm are more complicated. However, in my view, it would be unfair if I was not to regard the moneys advanced by Mr Ball Senior and the motivations attached to that advance to be seminal in how the parties’ contributions are to be assessed now. In regards to the Property Y farm and associated items, I assess the contributions to be 85/15 percent in favour of the respondent.
Step Three – section 90SF(3) – the prospective needs of the parties
I am now required to consider the various matters set out in section 90SF(3) and in particular to consider whether any further adjustment should be made in favour of either party. The section 90SF(3) factors are mainly but not only, prospective in nature. They are as follows:
The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(b)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; and
(c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
Paragraph (a) – the applicant has recently had her thirty-eighth birthday. The respondent is also thirty-eight years of age. As such, both have many years of productive life before them.
The applicant has complained of a residual stress related illness. It seems more probable than not that with the resolution of these proceedings this condition will resolve. The respondent has been diagnosed with diverticulitis. The medical evidence provided by him in respect of this condition is extremely limited.
As such, I am not prepared to conclude that this condition has any significant implications for Mr Ball’s income earning capacity for the foreseeable future, particularly given that he has committed himself to working on the Property Y farm, as an agricultural labourer. I do not accept his evidence that this can be regarded as some form of light duties.
Paragraph (b) – the applicant has extensive tertiary qualifications in (qualifications omitted) including a (qualifications omitted). In my estimation, she is a focussed and professional person with an assured career before her. She is fortunate to enjoy her work, for which she has displayed a high degree of aptitude.
The respondent has no tertiary qualifications and no formal trade skills. He has not been in the formal workforce for a number of years. As such, Mr Ball must be regarded as an unskilled person with a limited income earning capacity.
Ms Sawden is likely to continue to earn somewhere in the vicinity of $90,000.00 for the next few years. Her salary will increase in line with her growing experience. Clearly (employer omitted) value Ms Sawden highly. As a consequence of a combination of his lack of skills and personal preferences, Mr Ball will earn significantly less. However, he and his father are likely to provide benefits for one another in forms other than direct cash payments, which can easily be characterised as wages.
Accordingly, at the present time, Ms Sawden’s financial future is likely to be far more assured than that of Mr Ball. However, the fact remains that Mr Ball has chosen to adopt the mode of life which he currently leads with all its implicit financial uncertainties. Just as he will continue to look out for his father, so will Mr Ball Senior look out for the respondent.
In his evidence, Mr Ball Senior indicated that he regarded the moneys advanced by him over the years to the respondent to be analogous to superannuation. I accept Mr Ball Senior’s evidence that he personally does not have access to superannuation. However, as previously indicated it is my assessment that Mr Ball Senior is a canny business person.
Mr Ball Senior does not currently qualify for the aged pension. He conceded that this was due to his ownership of real property. I am not greatly interested in Mr Ball Senior’s financial affairs and he was understandably resistant to answering Mr Heinrich’s questions about them. He did however reveal that he owns five properties and collects rent of $595.00 per week.
It is implicit in my findings in this case that I consider that the respondent has access to significant financial resources as a consequence of his relationship with his father and the manner in which the two have elected to join their financial affairs particularly in the shape of the Property Y farm. As such, Mr Ball is not without prospects.
Paragraph (c) – given that X is now nineteen years of age this is not a relevant consideration.
Paragraph (d) & (e) – neither party has re-partnered at the present time. I have not been advised as to whether X is entitled to receive any government assistance whilst she is studying or whether she has some form of employment. In a loose sense, I accept that Ms Sawden has a duty to maintain X. However, in my view, this is not a significant factor in this case.
Paragraph (f) – given the parties’ respective ages, they are still far from the stage of life when concerns about their financial security and retirement are pressing. Pursuant to section 90MC of the Family Law Act superannuation interests are to be treated as property.
Superannuation is a form of compulsory saving for retirement. As such, it must be preserved until its crystallisation on the occurrence of some specified event, usually permanent retirement from the workforce.
In this case, the parties’ respective holdings of superannuation are not great. In the respondent’s case, it is unlikely in the short to medium term that he will increase his holdings which remain modest because of his long periods of self-employment.
As a professional in the paid workforce, the applicant’s superannuation entitlements are likely to increase over time as they compound with interest and her regular contributions. As such, she is in a much better position so far as retirement planning is concerned than the respondent.
However, as previously indicated, neither party seeks a specific superannuation split. From Mr Ball’s perspective, I suspect that he regards his jointly held interest in the Property Y farm with his father as being analogous to his superannuation which will come to him on his father’s death.
Paragraph (g) – the respondent tacitly acknowledges that Property W2 must be sold in order to ensure that Ms Sawden receives her proper entitlements to a property settlement. As a consequence of this, Mr Ball will have to arrange alternative accommodation for himself. What form this accommodation will take is uncertain to me. In future, it seems likely that he will be accommodated at the Property Y farm in a property to be constructed there by Mr Ball Senior. As such, he will have some level of security.
In due course, I would anticipate that Ms Sawden would want to purchase her own accommodation. As a regular income earner, she is likely to qualify for a mortgage fairly easily. I acknowledge that she wishes to receive a significant amount of cash as a consequence of these proceedings in order to achieve this outcome.
Paragraphs (h), (i), (j), (k), (l), (m), (n), (o), (p) & (q) – these considerations are not relevant in this particular case.
Paragraph (r) – in Ferguson & Ferguson[45] the Full Court of the Family Court held that section 75(2)(o) [the equivalent of section 90SF(3)(r)] was to be read ejusdem generis with the other matters listed in the section 75(2) which enabled the court to bring into account “conduct which has an economic significance in the parties’ dealing with each other or the property in dispute.”
[45] See Ferguson & Ferguson (1978) FLC 90-500 at 77,607
These proceedings have been a financial disaster for each of the parties and those associated with them. Both Ms Sawden and Mr Ball have been lent or given significant sums of money by relatives to fund these proceedings.
In addition, I am satisfied that since the parties separated, Ms Sawden has subsidised Mr Ball’s decision not to actively pursue work whilst he is engaged in working with his father on the Property Y farm. During this period, Mr Ball has had the benefit of living in the former family home whilst Ms Sawden has had to rent with X.
As a consequence, the financial austerity which inevitably results from relationship breakdown has fallen more heavily on Ms Sawden than on Mr Ball. However, she has the greater income of the two parties.
Paragraphs (s) & (t) – these considerations are not relevant to this particular case.
Conclusions on section 90SF(3) factors
In my assessment, the section 90SF(3) factors are closely balanced. Ms Sawden has the security of her qualifications and her well paid remuneration with (employer omitted). Mr Ball has the support of his father whilst he pursues the lifestyle of his choosing, managing the Property Y farm.
In these circumstances, I propose to make a further modest allowance in favour of Ms Sawden as a consequence of the matters arising under section 90SF(3)(r), in relation to the Property Y farm and related chattels of 2.5%, so that in effect, Ms Sawden should receive an allowance of 17.5% in respect of these items which have been notionally placed into a separate pool. In this regard, I take into account the fact that Mr Ball has been in occupation of the family home, whilst Ms Sawden has been renting but note the disparity in their respective incomes
The form of orders
In Steinbrenner & Steinbrenner,[46] Coleman J observed that in proceedings dealing with the exercise of discretion, whether in relation to the assessment of disparate contributions in a de facto property case or assessment of damages in a personal injury case, there came a point where it was necessary for the court to make a leap from words to figures.
[46] See Steinbrenner & Steinbrenner [2008] Fam CAFC 193 at [234]
It is now the point of the proceedings when the court must make such a leap and turn to the tin tacks of what each party will receive, particularly how and in what form. This leap from abstraction to the concrete must be undertaken in terms of what is just and equitable to each of the parties concerned.
I appreciate the artificiality, which must arise from the court talking in percentage terms. After all what matters to the parties is not percentages per se but what orders actually mean in terms of dollars and cents and what items of property are retained and what has to be realised.
The assets comprised of Property W2; the jointly owned motor vehicle; and the parties’ respective superannuation total $468,257.67. As such 50% of this figure is represented by the sum of $234,128.83.
The value of the Property Y farm and the related chattels comes to $416,200.00. 17.5% of this sum is represented by the sum of $72,835.00.[47] Accordingly, if Ms Sawden retains her superannuation ($89,147.67); and the Toyota Corolla motor vehicle ($9,000.00); she will need to receive a further sum of $208,816.16 to achieve her entitlements, bearing in mind the value of the items returned by her.
[47] The sum of $234,128.83 and $72,835.00 is $306,963.83.
Mr Ball has indicated that he does not believe that he can afford to retain the former family home. Given his current personal financial situation, it seems unlikely that he would easily qualify for mortgage finance. However, it is not beyond the bounds of possibility that Mr Ball Senior will lend some form of assistance, as he has done in the past. I will give the respondent the opportunity to pay Ms Sawden the sum so calculated but if he is not able to raise the sum within six weeks the property will have to be sold.
If it has to be sold, I hope that the property achieves a greater sale price than its current estimated value. There will, of course, be costs associated with the sale which the parties will have to bear in equal proportion. Thereafter the applicant should receive a sum calculated by reference to the items of property she retains and her entitlements by reference to the Property Y farm.
The applicant after a lengthy relationship which produced a now adult child, leaves with a reasonable amount of superannuation; a car of modest value; and around $200,000.00 in cash which will enable her to purchase, albeit with a mortgage, some form of accommodation for herself.
It has been said, by the Full Court, that the most valuable “asset” a party can take out of a marriage is “a substantial, reliable income-earning capacity”.[48] In this case, Ms Sawden has such an asset. As a consequence of this and given that she is still a person with many working years before her, she has ample time to mend her financial situation and provide for her economic security.
[48] See Clauson & Clauson (1995) FLC 92-595 at 81,911
Mr Ball leaves the relationship with a very modest amount of superannuation and his interest in the Property Y farm and its related chattels. If the former family home has to be sold, he will receive an amount of cash of around $100,000.00, which will provide him with some form of buffer to protect him from the exigencies of life.
Significantly, Mr Ball will be able to continue in the farming enterprise with his father and he (Mr Ball Senior) will in due course build accommodation at the property which the respondent will occupy. Thus Mr Ball has some measure of security for the future. I also bear in mind that he is in his late thirties. It does not seem improbable that he will return to some form of paid work in the future. Thus, he too it seems to me, has the potential to mend his financial situation if he so wishes. Above all, at some time I hope in the far off future, he will inherit the Property Y farm.
In these circumstances, I consider that the outcome I have reached and the orders which flow from it represent a just and equitable outcome to these proceedings.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding three hundred and twenty (320) paragraphs are a true copy of the reasons for judgment of Judge Brown
Date: 20 May 2016
[20] Watson & Ling [2013] FamCA 57 at [13]
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