Saxton & Saxton
[2008] FMCAfam 70
•4 February 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SAXTON & SAXTON | [2008] FMCAfam 70 |
| FAMILY LAW – Parenting – father’s application for equal time – best interests of the children – equal shared parental responsibility. FAMILY LAW – Property – husband’s unencumbered property – loan from wife’s father – contributions. |
| Family Law Act 1975 |
| De Angelis [1999] FamCA 1609 Goode (2006) FamCA 1346 Hickey (2003) FLC 93-143 Lavender & Turner (2007) FamCA 182 Rice & Asplund (1979) FLC 90-725 White-Tulloch & White (1995) FLC 92-640 Williams (2007) FamCA 313 |
| Applicant: | MR SAXTON |
| Respondent: | MS SAXTON |
| File Number: | BRC 2032 of 2007 |
| Judgment of: | Baumann FM |
| Hearing dates: | 12 & 18 October 2007 |
| Date of Last Submission: | 18 October 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 4 February 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Burridge |
| Solicitors for the Applicant: | Berry Family Law |
| Counsel for the Respondent: | Mr Linklater-Steele |
| Solicitors for the Respondent: | Biggs Fitzgerald Pike |
ORDERS
PROPERTY
The net pool of assets as calculated in paragraph 2 below be divided as to 67.5% thereof to the husband and 32.5% thereof to the wife.
The pool of assets for the purposes of paragraph 1 above be as follows:-
ASSET VALUE
$Property C
745,000.00 or if the property is required to be sold pursuant to Order 7 below, the net sale price of the property, being the gross proceeds of sale less the payments referred to in Order 8(a) below
Equity in Property F 37,500.00
Wife’s Nissan X-trail motor vehicle 21,000.00
Wife’s shares 8,837.00
Husband’s motor vehicles and motorcycles
24,975.00 Sale proceeds Ducati 750 motorcycle (Husband) 6,000.00
Sale proceeds Army Landrover (Husband) 800.00
Sale proceeds Panther (Husband) 3,000.00
Husband’s Suncorp Metway Investment Funds 18,001.00
Wife’s interest in Sunsuper 20,241.00
Husband’s superannuation 20,000.00
In part payment to the wife of the wife’s 32.5% share of the net assets, the husband transfer to the wife and the wife retain for her sole use and benefit absolutely the following:-
(a)The equity in the real property situated at Property F in the State of Queensland.
(b)The Nissan X-trail motor vehicle in the wife’s possession.
(c)The shares held in the name of the wife.
(d)The wife’s entitlements to superannuation she has with Sunsuper.
The wife be responsible for and indemnify and keep the husband indemnified in relation to any claims by Mr L arising from the loans he made to the wife or otherwise deemed to be owing under the written note dated 19 July 2005.
In part payment to the husband of the husband’s 67.5% share of the net assets, the wife transfer to the husband and the husband retain for his sole use and benefit absolutely the following:-
(a)The real property situated at Property C in the State of Queensland.
(b)The motor vehicles and motorcycles in the husband’s possession being:-
(i)Ducati Monster
(ii)Cagiva 750
(iii)Landrover Defender
(iv)Iseki tractor
(v)Landrover Wagon and Landrover Ute
(vi)CZ 250
(vii)Kawasaki Tengai
(c)The sale proceeds of the Ducati 750 motorcycle, the Army Landrover and Panther motorcycle.
(d)The Suncorp Metway investment fund held in the name of the husband.
(e)The husband’s superannuation entitlements.
Within sixty (60) days of the date of these Orders, the husband pay to the wife the sum of $206,000.00.
In the event of a failure by the husband to make the payment in Order 6 above, the husband shall sell the Property C in the State of Queensland and the following terms shall apply in relation to the sale:-
(a)The husband list the property for sale forthwith upon the failure by him to make the payment referred to in Order 6 above and shall provide to the wife’s Solicitors a copy of the Listing Agreement entered into with the husband’s real estate agent.
(b)These orders constitute an authority to any real estate agents with whom the property is listed for sale to provide to the wife and/or her Solicitors information concerning the listing, including the listing price and details of any offers made to the husband.
(c)The husband shall not enter into a Contract of Sale with respect to the property unless the wife has first approved the sale price and the terms and conditions of the proposed sale.
(d)In the event of a Contract of Sale of Property C not having been entered into within three (3) months from the expiration of the sixty (60) day period referred to in Order 6 above the husband shall do all things necessary to procure a sale of the property by way of public auction upon the following terms:-
(i)The reserve price shall be mutually agreed upon by the husband and the wife and failing agreement the reserve price shall be determined by the auctioneer; and
(ii)Otherwise the provisions of sub-paragraph 7(c) above apply.
Upon the sale of the Property C in the State of Queensland the gross sale proceeds be applied in the following manner:-
(a)In payment of real estate agents commission, advertising and auction costs (if any) and the legal costs of the sale.
(b)The balance sale proceeds be divided between the husband and the wife so as to achieve a division of the net pool of assets (as calculated in accordance with Order 2 above) of 67.5% thereof in favour of the husband and 32.5% thereof in favour of the wife, when taking into consideration the other assets each party is to receive and/or retain pursuant to orders 3 and 5 above.
The husband be restrained from selling, transferring or otherwise disposing of or encumbering Property C pending the sale of the said property.
Except as otherwise provided in this Order, the husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including (but not limited to) money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.
The parties do all such acts and sign all such documents necessary to give effect to the operation of these Orders.
Should either party default in signing or executing such documents required to give effect to any and every provision of these Orders then a Registrar of the Federal Magistrates Court of Australia at Brisbane shall be empowered and is hereby empowered to sign and execute such documents in lieu of the defaulting party pursuant to Section 106A of the Family Law Act as amended.
The parties agree that it shall be sufficient evidence of a default in signing a necessary document or instrument as referred to above with the party requiring it to be executed forwards the same to the other party or the Solicitors who act for the other party in the making of these Orders and within fourteen (14) days hereof if the same is not properly executed and returned to the party requiring its execution by the other party.
CHILDREN
That the children L born in February 2000 and K born in February 2002 live with the mother.
That the parties have equal shared parental responsibility in relation to the said children.
That the father spend time with the children at all such times as may be agreed between the parties but failing agreement as follows:-
(a)Commencing on Thursday 7 February 2008, from after school on Thursday until the commencement of school on Monday morning and each alternate week thereafter (with such visit extending to Tuesday morning should the Monday be a public holiday).
(b)Commencing from Thursday 14 February 2008 and in each alternate week thereafter, from after school Thursday until before school Friday.
(c)For the first half of each of the children’s school holiday periods in 2008 and for the second half of such school holiday periods in 2009, alternating yearly thereafter between the first and second halves of the school holiday periods.
(d)On Father’s Day from 9.00 a.m. to 5.00 p.m. save that the mother spend time with the children on Mother’s Day from 9.00 a.m. to 5.00 p.m.
(e)On the children’s birthdays as follows:-
(i)If the birthday falls on a school day and the children would otherwise be in the care of the mother on that day pursuant to these orders, then from school to 6.00 p.m.
(ii)If the birthday falls on a weekend and the children would otherwise be in the care of the mother on that day pursuant to these orders, then from noon until 6.00 p.m.
(iii)If the birthday falls on a day when the children are otherwise in the care of the father pursuant to these orders, then the mother shall spend time with the children at the same times as the father is able to spend time with the children in accordance with sub-paragraph 16(e)(i) and (ii) above.
(f)In 2008 and in all even numbered years thereafter from 5.00 p.m. Christmas Eve to 2.00 p.m. Christmas Day, save that the mother spend time with the children from 2.00 p.m. Christmas Day to 5.00 p.m. Boxing Day.
(g)In 2009 and in all odd numbered years thereafter from 2.00 p.m. Christmas Day to 5.00 p.m. Boxing Day save that the mother spend time with the children from 5.00 p.m. Christmas Eve to 2.00 p.m. Christmas Day.
Where the father spends time with the children during the first half of any school holiday period, he shall recommence his visits with the children in accordance with paragraph 16(a) in the first week of the new school term and where the father spends time with the children during the second half of any school holiday period, he shall recommence his visits with the children in accordance with paragraph 16(b) in the first week of the new school term.
The father’s spending time with the children in accordance with paragraphs 16(a) and (b) above is suspended during the children’s school holiday periods.
During school holiday periods when the children are in the care of the father, the father facilitate telephone communication between the children and the mother by placing a telephone call to the mother each Wednesday between 6.00 p.m. and 7.00 p.m. and the mother facilitate telephone communication between the father and the children by placing a telephone call to the father between 6.00 p.m. and 7.00 p.m. on each Wednesday when the children are in her care during school holiday periods.
These orders constitute an authority to any schools attended by the children to provide to each parent school reports, newsletters, school photo order forms and any other notices which parents of students attending such schools are ordinarily entitled to receive.
These orders constitute an authority to any medical practitioner, specialist or other healthcare professional who attend upon the children to discuss with each parent the health of the children.
The mother and father advise each other as soon as is reasonably practicable of any medical emergency, serious injury or any other series health conditions suffered by the children when in their care.
The mother and father keep each other informed of their respective residential addresses and their landline and mobile telephone numbers and in particular, advise the other parent within three (3) days of any change to either their addresses or telephone numbers referred to above.
The father be responsible for transporting the children for the purposes of paragraphs 16(a), 16(b) and 16(c) above.
For the purposes of paragraph 16(d) above the father collect the children from and return the children to the mother’s residence on Father’s day and the mother collect the children from and return the children to the father’s residence on Father’s Day.
For the purposes of paragraph 16(e)(i) and (ii) the father collect the children from school or from the mother’s residence as the case may be and return the children to the mother’s residence at the conclusion of the time spent.
For the purposes of paragraph 16(e)(iii) the mother collect the children from school or the father’s residence as the case may be and return the children to the father’s residence at the conclusion of the time spent.
For the purposes of paragraph 16(f) the father deliver the children to the mother on Christmas Day and the mother return the children to the father on Boxing Day.
For the purposes of paragraph 16(g) the mother deliver the children to the father on Christmas Day and the father return the children to the mother on Boxing Day.
IT IS NOTED that publication of this judgment under the pseudonym Saxton & Saxton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 2032 of 2007
| MR SAXTON |
Applicant
And
| MS SAXTON |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant Mr Saxton (56) and the Respondent Ms Saxton (36) married in May 1998 and physical separation occurred in December 2006. The parties dispute if separation under the one roof occurred earlier.
The parties have two sons, L (nearly 8) and K (5). The parents dispute the future care arrangements for the boys. As well, the parties are unable to agree on how the almost agreed pool of assets should be divided. These are the issues I am required to determine.
Parenting Issues
Although each of the parents now have new relationships, the principal witnesses were the parents and the family report writer, social worker Susan Lewis. All were cross examined, as were the father’s girlfriend who does not live with him Ms D and the mother’s new partner (who does live with her) Mr W.
By final submissions, despite some variations during the course of these proceedings (commenced by the father in February 2007), the parenting proposals were:-
Father
The children live with the mother in one week and live with the father in the alternate week, with changeovers to occur each Friday at 3:00 p.m. That the parties have equal shared parental responsibility.
Mother
The children live with the mother and the father spend significant and substantial time with the children each alternate weekend (Friday to Monday) and each alternate week overnight on Thursday. Changeovers will occur at school. School holidays shall be shared equally. The mother seeks an order for sole parental responsibility.
Principles
The child's best interests are the Court’s paramount consideration. In determining those interests the Court must consider not only the objects of s.60B of the Family Law Act 1975 your and the right of a child to have a meaningful relationship with all those people significant to them, but also the additional considerations are set out in s.60CC. The primary considerations under s.60CC(2) and the additional considerations under s.60CC(3) will be analysed below to ensure that the order I propose will serve the best interests of the children.
In Goode (2006) FamCA 1346 the Full Court made it clear that the presumption that equal shared parental responsibility is in the best interest of the child (s61DA) does not carry with it any presumption about time. The issue of equal time is dealt with in s65DAA and “when the presumption is applied the first thing the Court must do is to consider when making an order whether it is consistent with the best interest of the child and reasonably practicable for the child to spend equal time with each of the parents. If equal time is not in the interest of the child or reasonably practicable the Court must go on to consider making an order whether it is consistent with the best interest of the child and reasonably practicable for the child to spend substantial and significant time with each of the parents” (see Lavender & Turner (2007) FamCA 182).
It follows that unless the presumption of equal shared parental responsibility is rebutted, the Court must consider whether equal time with each parent is in the children’s best interests and reasonably practicable. If the Court does not make an order for equal time, the Court must consider whether the children spending time (as defined by s65DAA(3)), is in the best interests of the children and is reasonably practicable.
For the reasons which follow, I have formed the view that:-
a)The parents should have equal shared parental responsibility.
b)The children should live predominantly with the mother, whilst spending time with the father each alternate week from after school Thursday to before school Monday and in the off week, on Thursday overnight. All changeovers are to occur at school.
c)School holidays should be shared equally.
Equal Shared Parental Responsibility
The communication between these parents is shaped by high levels of conflict. It is likely that, to some degree, that conflict has been exacerbated by:-
a)The manner in which final physical separation occurred in December 2006, accompanied as it was by mutual protection orders.
b)The ongoing property and financial dispute involving, not just the parties, but the mother’s father Mr L.
c)The mother’s decision to re-partner so quickly with Mr W, and the allegations made by the father against him of physical harm of the children.
d)The father’s insistence initially (by Application filed in February 2007) that he be the predominate carer, which, as I have noted was modified by the time of trial, which was strongly opposed by the mother.
Whilst I would anticipate that the communication capacity of these parents will improve once all legal proceedings are finalised, they would both benefit from attending a post separation parenting course.
I do not however regard the events since physical separation, seen in context, as sufficient to rebut the legislative presumption of equal shared parental responsibility. Furthermore, in circumstances where the children will be spending five nights out of 14 with their father during school terms, he should play a role in major decisions affecting their long term best interests.
Equal Time
The extent to which the parties are unable to communicate effectively coupled with the findings on the primary attachments which the children hold with their mother, weigh against a finding that the father’s Application for equal time is in the children’s best interests. I am satisfied that with predominate care remaining with the mother, a regime (which has worked well since ordered in April 2007), and which amounts to significant and substantial time with the father, is in the children’s best interests and reasonably practicable, at this time.
I do not speculate as to whether, if the communication between the parties improves and as the boys get older, a more equal time sharing would be better. I say merely that is a possibility in the future but on the evidence before me at trial, now is not the right time for an equal time regime.
Analysis
I now deal with the competing proposals within the matrix of the relevant primary and secondary considerations.
Benefit of Having a Meaningful Relationship
There is no dispute that the children do have currently a meaningful relationship with each of the parents which must be maintained. I am satisfied the order I propose to make will do so.
Protect the Children from Harm
I agree with the conclusion reached by Susan Lewis that neither parent nor their partner represents a risk of harm to the physical or psychological well being of L and K. This is subject to the concerns I have about the children being exposed to the conflict between their parents and their involvement in these proceedings. I take the view that the unfortunate burn suffered by L was an accident. I accept that Mr W plays physically with the boys and the father regards it as potentially harmful. I do not agree. I am satisfied the father discussed with the children his desire for an equal time regime before the interviews with Ms Lewis. That was inappropriate as was the mother’s questioning of the boys after the interviewing, resulting in the further telephone conversation she had with Ms Lewis. I am certain both boys (L in particular) were acutely aware of the different positions of their parents, and engaging him in discussions in such circumstances is potentially psychologically harmful.
I am reasonably confident that when matters settle down after this litigation is complete; these additional tensions arising from two competitive parents will subside.
Views
Clearly, having formed the view of how these boys have been exposed to the conflict between their parents, I would need to be cautious about what the parents say the children tell them. It is likely the children would tell the parents what they think they may wish to hear. Ms Lewis captured some of these young boys’ feelings at paragraphs 6.15 to 6.72. It is not necessary to incorporate verbatim her comments. What is clear is that the children greeted the father “happily and affectionately”. L seemed comfortable with the current arrangements although at paragraph 6.29 when asked if he would like to change what he does now “such as having more time with his dad” he said, somewhat hesitantly:-
“I would like to see them a bit equal and that’s all I know.”
K, who it must be remembered was only five at the time of interview, did not express any definite views other than he was comfortable with, and loved, both parents the same.
Ms Lewis said, in cross examination, she did not think L truly understood the concept of equal time or what it would mean. She thought L wanted more time with the father.
I take into consideration, but with some caution because of their age and exposure to the parent’s expressed wishes, the feelings and views expressed by the boys – but I could not attached determinative weight to them.
Relationships
Although the children have a strong and secure attachment to both parents, and of course each other, I accept Ms Lewis’ view that the children are at this time primarily bonded to the mother. This is both a by-product of their young years and also the primary role the mother has played in their nurturing to date. This view of Ms Lewis, which I adopt, weighs against an equal time regime being in the best interests of the boys because, as Ms Lewis said, a week would be a long time away from their mother. The fact that they seemed to cope fine at school holidays is not a true indication of their capacity to cope with the change in routine which occurs during a school term.
The children have a close and developed relationship with Mr W – the mother having been in such relationship longer than the father’s relationship with Ms D. The children are comfortable with him, and even after he had been living with the mother, there does not seem to be any major concerns in the children adjusting to the mother’s new arrangements.
Facilitation of Time
This became an issue at the time of separation when tensions were at their highest. The father says the mother failed to genuinely promote his time with the children. The father was very negative about the quick manner in which the mother re-partnered and this also had an impact. Not unreasonably perhaps, the father had some concerns about whether he was being “replaced” by Mr W.
After the initial difficulties (save for the “Wet and Wild” incident), the orders made have been complied with and time increased since separation. Although the mother handled the “Wet and Wild” event poorly in my view, I do not consider the mother would fail to facilitate or, more importantly, promote and support L and K’s relationship with their father in the future.
Effect of Change
I agree with Ms Lewis that an equal time arrangement would be a significant change, particularly for K, in the time and frequency of time in the mother’s household. This is not desirable at this time. Similarly, I would not support a reduction in the time, which would be a consequence of accepting the mother’s proposal.
The current arrangement which I regard, on the evidence, has met the children’s needs and has worked well; offers the children weekly time with their father; a special Thursday night each week; an extended weekend each alternate weekend, so as to increase the opportunities for the father to be more involved with the children’s school activities and peers.
Capacity and Attitude to Parenting
These parents have quite different life experiences; are 20 years apart in age; and offer a range of individually unique skills and talents to these boys. They are quite different people who, not surprisingly, parent differently. The father remains the primary male role model for his sons.
Both parents have the capacity to parent, although the father’s work hours and commitments mean he is more likely to utilise the after-school services than the mother, who has both the “live in” support of Mr W and has been able to modify her part time work hours around the children’s needs and activities.
This factor does not weigh heavily in favour, or against, either of the parents’ competing proposals.
Making an Order Least Likely to Lead to Further Proceedings
As Ms Lewis opined, and on the whole of the evidence I agree, the father was focussed on securing equality of time and does not believe the current arrangement provides the boys with sufficient time with him. Although I believe, at least initially, his motivation was also influenced by reducing time with the mother (and therefore the influence of Mr W), by the trial some of the earlier recorded concerns the father expressed about Mr W had abated.
The father is likely to feel disappointed and aggrieved by my decision, and as a result I could not be satisfied that he may not in the future seek to further increase the time the children spend with him. I draw some comfort from the awareness, that before any further proceedings could be instituted the principles enunciated in Rice & Asplund (1979) FLC 90-725 will need to be met, and that the involvement of pre-action Relationship Centre mediation would need to be undertaken.
Conclusion
For the reasons I have given, it is my view that the current school term arrangements, coupled with an equality of school holidays and sensitive sharing of special days such as Father’s Day, Mother’s Day, the children’s birthdays and Christmas is in the best interests of the children.
As it seems the father may now be unrepresented I will ask the solicitors for the mother to prepare an order consistent with these reasons for production to the father. I, as I set out below, have set a day for the pronouncement of the orders.
Property Proceedings
The financial history of the parties’ relationship is not significantly in dispute. At the time of cohabitation the husband was the sole registered proprietor of Property C. It is necessary to explain in these reasons the extent of any contributions to this existing property during the relationship from May 1998 until physical separation in December 2006 (approximately eight and a half years).
The other major asset in the pool is a home at Property F, registered in the wife’s name solely and acquired in September 2005. It is not disputed that the wife’s father Mr L, is a man of some financial substance, and that he provided his daughter (the wife), with funds totalling $450,000 which she used to purchase the Property F home. I deal further with that transaction and a determination of how Mr L’s assistance should be characterised later in these reasons. It follows that the weight I should attach to the husband’s initial contributions and the actual nett interest the wife has in the Property F home significantly shape the order which does justice and equity to these parties.
Principles
The methods and analysis to be undertaken in a property dispute are not in doubt and were recently and succinctly restated by the Full Court in Hickey (2003) FLC 93-143. It essentially involves a four stage process initially to determine, usually at the time of trial, the assets and liabilities of the parties. Secondly, by reference to s 79(4) to consider the respective contributions of a financial, non-financial, direct and indirect nature. Thirdly, to consider as directed by s 79(4)(e) the relevant s 75(2) factors and finally the Court is required to step back and look at the order it proposes to make to ensure that it does justice and equity to the parties in all the circumstances.
Property C Home
The husband’s property at Property C was unencumbered at the date of marriage and through the assessment of a Court expert valuer Mr Stanaway, the parties agreed on the value of the property at the time of marriage.
Although the wife describes the home as “very basic when we moved in”, most of the improvements which the wife details in paragraphs 55 to 65 of her Affidavit could be described as cosmetic. Certainly the husband does not take issue with the improvements occurring, saying the wife “arranged for some of these renovations without even informing me that she was doing them”.
The parties’ income was modest, and I am satisfied that a number of the cheques provided by Mr L to the wife (set out at paragraph 2 of Mr L's Affidavit filed 12 July 2007) were used by the wife to finance tradespeople and materials for the minor improvements. I accept that the more significant improvements were the construction of:-
·An L shaped external verandah;
·“building in” of part of the garage;
·a covered deck.
I am satisfied that the parties (and not almost exclusively the wife as she claims) did work around the home and property and in the usual way contributed funds available from their income to improvements. In the absence of the production of all invoices for labour and materials it is impossible to conclude with any certainty the costs of improvements and repairs.
On the evidence of Mr L, which I accept as to the date of certain payments made, about $48,000 was provided to the wife between 25 January 2000 and 23 December 2004. I accept that a large proportion of these funds were used towards home improvements.
The property was rented for a period prior to physical separation, when the parties were residing in the Property F home. The husband has now returned to live in the home. Subject to the findings I have already made about improvements, I find that during the period the couple and their young family, resided at Property C the parties applied themselves to the usual maintenance, gardening and upkeep as their work and other family commitments permitted.
Property F Home
Although it is not necessary in this case to definitively determine the actual date of separation, I am satisfied that by the time the wife was looking for a home in early 2005, the parties were, as the wife described “having problems in our marriage”.
Whilst I am not certain whether the husband did approach the wife’s father to buy a home for the wife, it is clear that the purchase of the Property F home would not have occurred without the funds from Mr L. Joint funds of $10,000 were contributed to the purchase with the balance of funds coming from Mr L.
I regard the funds paid of $450,000 as a loan, unlike some of the other funds advanced or received by the wife from her father. I do so based on:-
a)The evidence of Mr L who says it was a loan;
b)The evidence of the wife coupled with her constant repayments;
c)The contemporaneous (although somewhat confusing) note dated 19 July 2005 signed by all parties (see Annexure “DL2”).
d)The context of the payment being a large amount paid at a time when the wife’s marriage was crumbling and the wife was seeking to create, for her and her family, some security of accommodation.
Whilst it may be, in time, that the payment to the wife gets consumed within any possible future entitlements under a Will of the father, Mr L struck me as a hard nosed businessman happy to assist his daughter, but not ignorant of the likely dispute looming between the wife and the husband.
I would think it unlikely that Mr L would sue his daughter to enforce payment, but that of itself does not persuade me that I should treat the payment as other than a loan.
The note refers to a part payment of $270,000 “no later than 1/08/07”. Mr L says:-
“Mr Saxton told me that he would get that money from the subdivision of part of and the sale of part of Property C.”
The husband, in response says he could not recall whether he read the document that bears his signature and that he might have said to Mr L that he might be going to subdivide. The husband conceded that “in technical terms” he agreed to pay those funds back.
In respect of the total payments made by Mr L as set out in paragraph 2 of his Affidavit, I find that:-
a)Mr L accurately recorded the payments.
b)That $450,000 was a loan of which $12,500 has been repaid by the wife (at $500 per month). The loan was interest free.
c)The sum of approximately$11,596.35 paid between 5 May 1998 and 9 February 1999 were payments made to the wife “when she needed money”. They were not a loan in my view. I am satisfied that the wife used them for general living expenses.
d)As earlier indicated in these reasons, I find that the payments from 25 January 2000 to 23 December 2004 totalling $48,716.15 were received by the wife and a significant proportion of those funds were used for the improvements and cosmetic changes to Property C. I do not regard the payments to the wife as a loan – notwithstanding the belated inclusion of $13,000 for “the deck” as a loan in the document dated 19 July 2005. In that respect, I accept $5000 was repaid but, because I do not intend to treat those payments as a loan, I am not required to decide whether at the time of payment a balance of $8000 was forgiven or extinguished. I will treat the wife as having received and contributed a further $48,716 during this period.
e)The payment made on 4 June 1999 for $5052.05 and the payment for the purchase of the car on 8 January 2004 ($21,990) is regarded by Mr L as “contributions to Ms Saxton” (see paragraph 4 of his Affidavit). I do not intend to treat those funds as a loan. Clearly the wife benefited from their receipt (including purchasing her Nissan which forms part of the agreed pool), and I intend to take it into consideration as a contribution by the wife.
f)I regard the payments on 21 December 2005 and 13 June 2006 as further contributions – but not loans.
In summary therefore, I propose to include in the pool of assets and liabilities a loan payable to Mr L by the wife of $437,500.
Pool of Assets
It is agreed that I should deal with the pool as one pool, because of the smallness of the parties’ superannuation entitlements. In that regard, the husband’s disclosure of his superannuation entitlements was deficient. In fact it seems he made little attempt to ascertain how many funds he has an interest in and the level of his entitlement. I am left with his “best estimate” given under cross examination of $20,000 in at least five separate accounts.
A dispute arose as to the funds received by the husband for the sale of the Ducati motorcycle. The husband swears to agreeing to sell the bike for $8000 but only receiving $6000. He denies he had a conversation with Mr O, a friend of the L family, in which he said he sold the bike for $16,000 and would be splitting it with the wife. The wife has not persuaded me that the bike was sold for $16,000. On this issue, whilst a conversation with Mr O probably took place, I can not be satisfied that I should infer he sold the bike for $16,000. I intend to include proceeds of sale at a figure of $6000.
The husband used some of the funds he received from his inheritance on legal expenses (approximately $10,698). Rather than add those funds back to the pool, I prefer to adopt a figure for a contribution from the inheritance of $58,748 ($69,446 – $10,698). I accept the husband’s evidence that the balance of the funds were used to meet joint living expenses and spent on the Property C home. Of course some of the funds remain available represented by Suncorp-Metway investment of $18001.
On the basis of these findings and earlier findings in respect of the loan from Mr L, I calculate the divisible pool to be as follows:-
Property C
$745,000
Property F
$475,000
Wife’s Nissan X Trail
$21,000
Husband’s motorbikes and vehicles
$24,975
Wife’s shares
$8,837
Husband’s Suncorp-Metway Investment
$18,001
ADD BACK
- Proceeds of Ducati
- Proceeds of Army Landrover
- Proceeds of Panther
$6000
$800
$3000
$9,800
Superannuation
- Wife
- Husband
$20,241
$20,000
$1,342,854
Less loan to Mr L
$437,500
NETT POOL
$905,354
Contributions
I accept the evidence that at the time of the marriage the husband’s contributions were significantly greater than the wife. A number of the smaller vehicles he still retains. Although attributing value to a number of smaller items is prone to difficulty, based on the agreed value of Property C at that time, the husband’s submissions that the comparison of the parties contributions at cohabitation was in the order of:-
Husband
$324,000 (92.4%)
Wife
$27,200 (7.6%)
is supported by the evidence.
I have identified that the major further contributions made by the parties during the relationship to trial may be summarised as follows:-
Husband
·His modest earnings from employment, slightly greater but not significantly so, to that of the wife;
·The inheritance which I take into consideration as a figure around $60,000
·His non-financial contributions to Property C in maintaining and improving the property;
·The non-financial contributions as a homemaker and parent. I would regard the wife’s contribution in these roles as superior to the husband.
Wife
·Her modest earnings, when not otherwise child bearing or child rearing, from her employment;
·The contributions from her father which I do not characterise as loans of over $80,000 during the relationship;
·The benefit of the interest free loan of $450,000 to acquire Property F;
·The more significant non-financial contribution as homemaker and parent to the young family;
·Her non-financial contribution in organising tradespeople and the works on Property C and, as time permits, her physical contribution to tasks around the home.
It becomes apparent from this summary, that but for the introduction of the Property C home, it may have been open to find other contributions during the relationship as approximately equal.
Property C has increased significantly in value and represents over 80% of the current nett pool of assets. On the evidence it is reasonable to infer that the general capital growth of properties has been a major factor in its increase in value. I do not ignore the improvements which were undertaken; however it is impossible to determine on the evidence how much of the increase in value is attributable to improvements and repairs, although Mr Stanaway opines $50,000.
Clearly I must not only take into consideration the nature and size of the initial contributions but how it was used. In this case it remains as a beacon in the pool of assets.
I was directed by Counsel to the Full Court decision of Williams (2007) FamCA 313. In that case after an 11 year relationship with no children, a large pool exceeding $3.6 million was divided as to 55% to the husband and 45% to the wife (before a further adjustment for the husband’s upkeep of the wife’s children). It was the finding of the trial judge that the husband’s contributions at commencement were between $852,000 and $902,000 whilst the wife contributed initially $76,574. The wife did also contribute a further sum of nearly $600,000 during the relationship from inheritances and the like.
In a consideration of a number of earlier Full Court and New South Wales Supreme Court decisions, the Full Court in Williams (supra) (Kay, Coleman and Stevenson JJ) said, at [26] that:-
“We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.”
The orders that the husband seeks would see him retaining Property C and the assets in his name or possession with the wife retaining Property F and the assets in her possession. Remembering that I have found the debt to Mr L to exist to the extent of $437,500, this would amount to the husband retaining 90% of the nett pool.
Even allowing for the overwhelming initial contribution of the husband, to assess his contributions at the time of the hearing as in the region of 90% would be tantamount to saying that the wife made virtually no contribution during the course of this eight year relationship. I find that not to be the case.
Weighing the respective contributions made during the relationship; giving proper weight to the value of the husband’s initial contribution and its effect upon the pool as it exists at the hearing I assess contributions to be 72.5% to the husband and 27.5% to the wife.
Section 75(2) Factors
The husband is 20 years older than the wife and enjoys good health. He is in secure employment but receives a modest income in the vicinity of $40,000 gross pa. He will have a shorter working life than the wife and therefore, with the minimal superannuation he currently holds, less opportunity to build a retirement nest egg.
Through the parenting arrangements I propose to make, he will have the children with him for a significant amount of time. It is unlikely these commitments will impact negatively on his earning capacity. I find he will pay a reasonable sum of child support as assessed from time to time. He will have a greater proportion of the pool of assets available to him, but this is because of the effect of his initial contributions. He will need to service a loan to enable him to retain Property C to fund the payment I have estimated he should pay to the wife.
The wife is younger than the husband, and although she has few formal qualifications I anticipate she will continue to maintain her part time employment which currently generates an income of approximately $18,000 pa. With K able to attend prep this year I infer the wife will have greater opportunities to improve her income from employment. It is likely however that she will still earn less than the husband for a number of years into the future. The wife also enjoys good health. The funds which she will receive from the orders I propose to make will enable her to reduce her borrowings.
The husband, in his submissions points to the substantial estate that the wife’s 80 year old father may leave. However, I agree with the submissions of the wife’s Counsel, that Mr L is not infirm and his death may be many years away. The husband was unable to adduce any evidence of the terms of the current will, but even if he had, it could easily be altered. The husband has not satisfied me of the probability and size of any prospective inheritance such as to afford it any significant weight under s75(2)(o) in accordance with authorities such as White-Tulloch & White (1995) FLC 92-640 or De Angelis [1999] FamCA 1609.
The best that can be said is that, on the past history, the wife may continue to be favoured with gifts from her father and no interest loans such as she has received and so has the benefit of.
Overall, in my view, the factors referred to persuade me that a small adjustment in the wife’s favour (particularly for her more significant responsibility for the children) is indicated. I believe an adjustment of 5% of the pool – or the equivalent of the wife receiving the first 10% (or $90,000) is proper.
Just and Equitable
On the basis of the analysis above, my assessment is that the wife should receive 32.5% of the pool (or $294,240) whilst the husband should receive 67.5% of the pool (or $611,113). The effect of such a division would be that the husband would be required to pay to the wife the sum of $206,662 calculated as follows:-
32.5% of $905,354 = $294,240 constituted by:-
Nett interest in Property F home
$37,500
Nissan X Trail
$21,000
Shares
$8,837
Superannuation
$20,241
$87,578
Payment by husband
$206,662
TOTAL
$294,240
The husband’s 67.5% share of $905,354 = $611,114 constituted by:-
Property C
$745,000
Motor vehicles and bikes
$24,975
Investment with Suncorp
$18,001
Add backs
$9,800
Superannuation
$20,000
$817,776
Less Payment to wife
$206,662
Total
$611,114
The husband, if he had to borrow the whole of the payment of $206,662 (plus costs of financing) might then have a debt of say $210,000 on a property valued at $745,000. The husband’s Financial Statement filed 28 June 2007, suggests that the husband could afford to pay the interest on a loan of $210,000 – which at say 9% would be about $360 per week.
I suspect the husband would see the wife’s “return” of over $200,000 for the eight year relationship as over generous to the wife. However I regard an order which achieves this result to be just and equitable.
I intend to order that the husband shall have 60 days to pay to the wife the sum, rounded down, of $206,000. If he is unwilling or unable to do so, then I would order that Property C be sold. Otherwise, each party will otherwise retain all other property and superannuation entitlements in their possession at the date of this order.
I shall also order that he wife shall indemnify the husband against any claims arising from the loans made by Mr L to her or otherwise deemed to be owing under the note dated 19 July 2005.
I will receive any submissions as to costs in writing.
I list the matter for 9:30am on 8 February 2008 for pronouncement of orders.
I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate: R. Carter
Date: 4 February 2008
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