Schilling and Schilling
[2012] FMCAfam 482
•28 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SCHILLING & SCHILLING | [2012] FMCAfam 482 |
| FAMILY LAW – Property – application for property orders – asset pool – circumstantial evidence – contributions – consideration of the matters referred to in Family Law Act 1975 (Cth) s.75(2) – adjustment of the parties’ contribution based entitlements – whether Orders just and equitable – where wife wishes to return to former matrimonial home. |
| Family Law Act 1975 (Cth), ss.75, 79, 106A |
| Astway Pty Ltd v Counsel of the City of Gold Coast [2008] QCA 073 Black and Kellner (1992) 15 Fam LR 343; FLC 92-287 Cullen v Welsbach Light Co. of Australasia Ltd (1907) 4 CLR 990 Gerber & Gerber [2010] FamCA 861 Gollings and Scott [2007] FamCA 397; (2007) 37 Fam LR 428; FLC 93-319 Gould & Gould [2007] FamCA 609; (2007) FLC 93-333 Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 K & K (2003) FLC 93-135 Lalor and Lalor (1989) 14 Fam LR 282; (1990) FLC 92-164 Rand & Rand (No 2) [2009] FamCAFC 155; (2009) 41 Fam LR 668; FLC 93-410 Tryon & Clutterbuck (No 2) [2009] FamCAFC 176; (2009) FLC 93-412 Weir and Weir (1992) 16 Fam LR 154; FLC 92-338 In the Marriage of W (1980) 6 Fam LR 538; FLC 90-872 |
| Applicant: | MS SCHILLING |
| Respondent: | MR SCHILLING |
| File Number: | CAC 863 of 2009 |
| Judgment of: | Scarlett FM |
| Hearing dates: | 1 and 2 December 2010 |
| Date of Last Submission: | 2 December 2010 |
| Delivered at: | Sydney |
| Delivered on: | 28 May 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Brzostowski |
| Solicitors for the Applicant: | Garden & Montgomerie |
| Counsel for the Respondent: | Mr Dalzell |
| Solicitors for the Respondent: | Gordon Garling Moffitt |
ORDERS
The Applicant wife and the Respondent husband are to divide the net matrimonial property between them so that the wife receives 65% of the net property and the husband receives 35% of the net property as more particularly set out in the following Orders.
The wife is to transfer to the husband all of her right title and interest in the former matrimonial home situate at and known as Property M in the State of New South Wales upon payment to her by the husband of the sum of $89,269.00 within three (3) months of the date of these Orders.
The husband is to indemnify the wife and keep her indemnified against all rates and charges and other liabilities connected to the former matrimonial home at Property M aforesaid.
The husband is declared to be solely entitled to the business (omitted) and all trading stock, (omitted) supplies, plant and equipment of the said business.
The wife and the husband are to be solely responsible for all liabilities not otherwise dealt with in these Orders and remaining in their own names including any credit card debts and personal loans and shall indemnify and keep indemnified the other party in relation to those liabilities.
The wife is to transfer to the husband all of her right title and interest in Mitsubishi (model omitted) motor vehicle registration number (omitted) within twenty eight (28) days of the date of these Orders.
The wife is solely entitled as against the husband to the following:
(a)Hyundai (model omitted) motor car registration number (omitted) and any other motor vehicle in her possession and registered in her name;
(b)All funds in her accounts in the (omitted) Credit Union and any bank or other financial institution account in her name;
(c)All superannuation entitlements in her own name; and
(d)All furniture, furnishings and other items of personalty in her possession.
The husband is solely entitled as against the wife to the following:
(a)Hyundai (model omitted) motor car registration number (omitted) and any other motor vehicle in his possession and registered in his name;
(b)All funds in his accounts in (omitted) Credit Union and Bendigo Bank and any other bank or other financial institution account in his name;
(c)All superannuation entitlements in his own name;
(d)All (omitted) currently in his possession; and
(e)All furniture, furnishings and other items of personalty in his possession save and except the following:
(i)A photograph of (omitted) located on the dresser in the lounge in the lounge room of the former matrimonial home at Property M;
(ii)Entertainment unit manufactured by (omitted) at Property M;
(iii)Old dresser in the third bedroom of Property M;
(iv)Hallway mirror;
(v)4 old steel spoked wagon wheels;
(vi)One windmill made by Mr R;
(vii)2 old shoe lasts;
(viii)Old milk can;
(ix)Wooden salt and pepper shakers.
The husband is to deliver the items in Order (8)(d) above to the wife or as she directs within seven (7) days of the date of these Orders.
The parties must execute each and every document, deed or instrument necessary to give effect to these Orders within fourteen (14) days of such document, deed or instrument being presented to them or to their solicitors.
If either party fails or neglects to execute any document, deed or instrument referred to in Order (10) above within fourteen (14) days of being called upon to do so then the Registrar or Deputy Registrar of the Federal Magistrates Court of Australia at Canberra is hereby appointed under the provisions of section 106A of the Family Law Act 1975 to execute all such documents, deeds or instruments in the name of the party who has failed or neglected to execute such document, deed or instrument and do all acts and things necessary to give validity and operation to the document, deed or instrument.
IT IS NOTED that publication of this judgment under the pseudonym Schilling & Schilling is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
CAC 863 of 2009
| MS SCHILLING |
Applicant
And
| MR SCHILLING |
Respondent
REASONS FOR JUDGMENT
Application
This is an application for property orders brought by the wife. By her Application filed on 7 July 2009 she sought orders whereby:
a)the husband transfers to her his interest in the property at Property M in the State of New South Wales;
b)the husband retains his interest in his business known as “(omitted)”;
c)the wife retains the sum of $12,464.00 invested with the (omitted) Credit Union;
d)the wife retains bank accounts and a superannuation policy held in her name;
e)the wife retains her interest in a (omitted) Hyundai (model omitted) motor car registered no. (omitted);
f)the wife transfers to the husband her interest in a (omitted) Mitsubishi (model omitted) motor vehicle registered no. (omitted);
g)the husband retains any boat and trailer, camping gear, power tools, bank accounts and any superannuation policy in his name;
h)that the parties acknowledge that their joint account with the (omitted) Credit Union with a balance of $17,189.56 was split as to 50% to the wife and 50% to the husband in September 2007;
i)the husband retains items of personalty set out in a schedule attached to the Application;
j)the wife retains items referred to in two other schedules;
k)the husband transfers to the wife items in another schedule; and
l)the husband pays the wife’s costs.
The husband, by his Response filed on 18 August 2009, sought the following orders:
1. The husband pay to the wife the sum of $50,000.00 within twenty-eight (28) days of the date of these Orders.
2. Upon payment of the sum referred to in Order 1 above, the wife transfer to the husband all her right title and interest in the former matrimonial home situate at and known as Property M, being the whole of the land contained in Certificate of Title Folio Identifier (omitted).
3. The husband retain the (omitted) Hyundai (model omitted) registration number (omitted) currently in his possession.
4. The wife pay the husband’s costs of and incidental to this application.
Background
The husband was born on (omitted) 1950. He is now 61 years old. The wife was born on (omitted) 1955, so she is now aged 57.
The parties started living together in 1971 and were married on (omitted) 1972. They separated for the last time on 21 May 2007. They were divorced on 15 August 2009.
There are three children of the marriage.
X was born on (omitted) 1972. X was born on (omitted) 1976. Z was born on (omitted) 1977. The children are all adults.
The husband worked for various employers in (omitted), including (omitted), and (omitted). He worked at the local (omitted) and also did (omitted) work.
The wife also worked while the parties lived in (omitted). She commenced working night shifts at (omitted) in 1973.
The husband also supplemented the family income by breeding (omitted) for sale, which he commenced to do in 1972. By about 1976 the wife estimates he had as many as 50 (omitted). However, the husband ceased breeding (omitted) in about 1976 or 1977 and converted the (omitted) to (omitted) for (omitted).
The parties moved to Property T, west of Property M, New South Wales, for about six months in 1980 and then moved to Property M. They initially lived in rented accommodation but purchased a house at Property M, in February 1985 for $26,500.00. The purchase of the house was financed partly by a First Home Owner grant of $7,000.00 and the balance was financed by a mortgage to the (omitted) Building society.
The wife commenced seasonal work at (omitted) in 1982 and continued to work there until 1991.
The husband commenced working for (omitted) in 1987 or 1988. He remained working there for about 12 or 14 years. He then commenced to work at (omitted) at (omitted).
The parties separated for several months in 1987 when the husband left the wife and the matrimonial home.
The husband commenced his own business in 2000, selling (omitted) and (omitted) supplies. Later he commenced trading in (omitted).
The parties separated on 21 May 2007 when the wife left the matrimonial home and took up residence in the (omitted) at (omitted). In September of that year the parties divided the proceeds of their joint account at the (omitted) Credit Union equally between them.
The wife commenced these proceedings by filing an Application and supporting documents on 7 July 2009.
The parties attended no fewer than three conciliation conferences before a Registrar of the Court, on 19 October 2009, 10 May 2010 and 27 July 2010. No resolution was reached.
Issues
The parties differ about the size of the asset pool, which on either view appears to be relatively modest. The wife claims that the husband’s business has a value of $80,000.00 and submits that the husband has not made a full and frank disclosure of his assets. The husband put a value on his business of only $4,860.00.
The wife asserts that the net value of the asset pool is $374,891.00, whilst the husband claims it be only $296,851.00.
The wife claims a greater contribution both financially and non-financially to the disclosed assets. The husband submits that the only just and equitable order is that the net matrimonial asset pool be divided on the basis of a 50:50 split with the wife to pay the husband’s costs.
Orders Sought
The wife now seeks orders as set out in her Minute of Orders Sought. Those orders are:
1. That the Husband transfer to the Wife all his interest in the former matrimonial home at and known as Property M, NSW (“the home”) and that pending transfer, the Husband pay all rates and costs of ownership associated with the home, and that he also indemnify the Wife and keep her indemnified against all outstanding liabilities related to the home, that have been incurred and accumulated up until the date of transfer.
2. That contemporaneously with the Husband complying with the above order, the Husband shall leave the home in a neat and tidy condition, fair wear and tear excepted.
3. That subject to any charge over any part of the Husband’s per business, the Husband shall be the owner of the whole of his per business, including all livestock, (omitted), (omitted) supplies, plant and equipment.
4. The items listed in para 31 of the Wife’s affidavit.
5. That save for the above orders, each party shall as against the other party be the sole beneficial owner of all property that is now or may in the future be respectively in his or her possession or control.
The Husband seeks orders as set out in a Document filed on 26 November 2010 entitled “Precise Minute of Final Orders Sought”. Those orders are:
1. The net matrimonial property be divided between the parties on the basis that the husband receives 50% and the wife receives 50% thereof with the following property division to apply:
(i) The husband retain the former matrimonial home situated at Property M.
(ii) The husband retain the business (omitted) Sole Trader.
(iii) The husband retain the (omitted) Mitsubishi (model omitted) motor vehicle registration (omitted) and the wife do all acts and things necessary to transfer her interest, if any, in the said motor vehicle.
(iv) The husband retain the (omitted) Hyundai (omitted) motor vehicle registration (omitted).
(v) The husband retain all bank accounts currently held in his sole name including but not limited to savings, term and investment accounts.
(vi) The husband retain his First State Superannuation entitlement.
(vii) The husband retain all furniture items and personal effects currently in his possession.
(viii) The wife retain the (omitted) Hyundai (model omitted) motor vehicle registration number (omitted) and assume sole responsibility for the personal loan held with the (omitted) Credit (Union) in relation to same.
(ix) The wife retain all bank accounts currently held in her sole name including but not limited to savings, term and investment accounts.
(x) The wife retain all furniture items and personal effects currently in her possession.
2. The husband pay to the wife the sum of $45,000.00 within 28 days from the date of this order.
3. The husband return to the wife the following items:
(a) photograph of (omitted) located in the dresser in the lounge room at the former matrimonial home;
(b) 4 old steel spoke wagon wheels
(c) one windmill
(d) 2 old shoe lasts
(e) wooden salt & pepper shakers
(f) old milk can
4. That other than as herein provided the husband and wife each be declared the sole legal and beneficial owners of all items of property presently in their respective possession or control.
5. The husband and the wife shall execute each and every document so as to put into effect the terms of these Orders within fourteen (14) days of presentation to them or their solicitors.
6. If either the husband or wife shall fail or neglect to execute such document as aforesaid then the husband and wife appoint, pursuant to Section 106A of the Family Law Act, the Registrar or Deputy Registrar of the Family Court of Australia[1] at Canberra to execute each and every document on behalf of the defaulting party.
7. If either the husband or the wife are required as a consequence of a breach of these Orders to make application to the Family Court of Australia[2] at Canberra then the defaulting party shall be liable for the costs of the application on a full indemnity basis.
8. The wife pay the husband’s costs of an(d) incidental to this application (including any reserved costs) as agreed or taxed.
9. Such further or other order as this Honourable Court deems appropriate.
[1] sic
[2] Also sic
Evidence
The wife relied on the following documents:
a)her Application filed on 7 July 2009;
b)her affidavit of 11 November 2010;
c)her financial statement filed on 12 November 2010; and
d)the affidavit of the parties’ daughter X.
The husband has filed the following:
a)Response on 18 August 2009;
b)his affidavit of 12 August 2009;
c)his affidavit of 10 November 2010; and
d)his financial statement.
Both the wife and X (who is an adult) gave oral evidence.
The wife tendered a DVD showing the former matrimonial home. In cross-examination the wife said that the husband ran a (omitted) supply business from the double garage on the property. She agreed with the assertion by the husband’s counsel, Mr Dalzell, that it was “a pretty shabby set-up, a bit messy”.
The wife stated that the husband had telephoned her in September 2007 asking her to attend at the (omitted) Credit Union to split the proceeds of the parties’ joint account and said:
“So that’s what I did.”
It was a significant part of the wife’s case that the husband’s (omitted) business was very profitable. She deposed:
I do not accept the husband’s allegation that his (omitted) business is not profitable. I do not accept the husband’s allegation that his (omitted) breeding and sale of (omitted) is a hobby. It is, I believe, a lucrative part of his business operations.[3]
[3] Affidavit of Ms Schilling 11.11.2010 (re-sworn 1.12.2010) at paragraph [36]
In cross-examination, the wife was asked about her estimate that the husband’s business was worth $80,000.00. It was put to her that there was no evidence to support that assertion and she replied “correct”.
The wife also conceded that she had been shown a large number of files that had been produced at her solicitor’s office. It had taken her five hours to look through them all and she did not find any evidence of the husband selling any (omitted).
It is a significant part of the wife’s case that she seeks an order that the former matrimonial home at Property M, should be transferred into her name. Her reasons for seeking sole ownership of the property are that:
a)at all relevant times she has been a joint tenant of the property; and
b)the $7,000.00 first home buyer grant was granted to her and to the husband.[4]
[4] Ibid at [101]
The wife also deposed that her children and their families visit her on frequent occasions, including her daughter X, who visits her each day with her family:
I wish to return to the former matrimonial home so that they can visit me more frequently and in relative comfort. The former matrimonial home has 3 bedrooms with comfortable amenities.[5]
[5] Affidavit of Ms Schilling at [101(f)]
The wife also deposes:
The former matrimonial home is a modest, yet comfortable home. I accept the husband’s assessment of its value at $145,000.00. It is unlikely that I could find a similar house for that sum in Property M.[6]
[6] Ibid at [101 (h)]
The wife deposed that she was forced to leave the home because of the husband’s violence towards her and “years of physical and mental abuse”.[7]
[7] Ibid at [101 (1)] and [102]
The parties’ daughter, X, swore an affidavit which needed to be re-affirmed on the first day of the hearing.
Ms Schilling deposed that she lived at home with her parents until 1991, when she left home to attend university in (omitted). She stated that her father was breeding (omitted) at Property M before she left to go to University.
Ms Schilling returned to live in Property M in 1996 for twelve months, during which time she would visit her parents’ home two or three times a week. She deposed:
8. During those visits I saw that the whole of the left hand side of the backyard was full of (omitted) in sheds. Many of the (omitted) had been converted from (omitted).
9. Dad bred a number of different varieties of (omitted) including (omitted) and (omitted)…
11. I was present when Dad prepared a selection of (omitted) to take to shows. He told me that he sold (omitted) at shows. I did not go to shows with him.[8]
[8] Affidavit of Y 1.12.2010 at [8], [9] & [11]
Ms Schilling was cross-examined by counsel for the husband, and said that she did not recall seeing any price tags on the (omitted) cages when she was shown the (omitted). On one occasion her father showed her a rare hybrid coloured (omitted) which he told her was worth a lot of money.
The husband gave oral evidence. When it was put to him by Mr Brzostowski, senior counsel for the wife, that he had not produced a single invoice for the sale of any (omitted) he replied that his (omitted) were “a hobby”.
The husband denied that he had held himself out as a vendor of (omitted).
Submissions
Senior Counsel for the wife submitted that this was a long marriage (36 years), so it would be reasonable to conclude that the findings would lead to an equal outcome, subject to the matters referred to in subsection 75(2) of the Family Law Act, which favoured the wife.
In particular, he noted that the wife had moved out of the former matrimonial home and had paid rent up till November 2010 in the sum of $20,385.00, whereas the husband had been able to remain living in the former matrimonial home, which was unencumbered. He referred the Court to the decision of the Full Court of the Family Court in Lalor and Lalor[9] where Nicholson CJ, Murray and Joske JJ held:
It is simply incorrect to stipulate that in an ordinary case the value of occupation should be set off against the payment of outgoings unless the outgoings are exceptionally high and have resulted in a substantial increase in the net value of the property. Equally it is incorrect to stipulate that the cost of accommodation should not be taken into account unless there was something particular or significant about it ‘as for example where a wife is forced to leave the home with a number of young children and is required to provide accommodation for those children at a significant cost over a substantial period’.[10]
[9] (1989) 14 Fam LR 282; (1990) FLC 92-164
[10] (1990) FLC 92-164 at 78,133
Mr Brzostowski submitted that whilst the wife may have more accumulated superannuation than the husband, it is not an asset that is immediately available.
Importantly, it was submitted that the husband had not made a full and frank disclosure of his assets, principally his (omitted) supplies and (omitted) breeding business. The submission is that this is a case that calls for a robust approach to be taken by the Court, and he referred to the decisions of Weir and Weir[11], Rand & Rand (No 2)[12], Gollings and Scott[13], Gould & Gould[14] and Gerber & Gerber[15].
[11] (1992) 16 Fam LR 154; FLC 92-338
[12] [2009] FamCAFC 155; (2009) 41 Fam LR 668; FLC 93-410
[13] [2007] FamCA 397; (2007) 37 Fam LR 428; FLC 93-319
[14] [2007] FamCA 609; (2007) FLC 93-333
[15] [2010] FamCA 861
The wife’s case depended on the application of circumstantial evidence, which can allow the Court to form a view that a fact has to have existed, or exists, even if there is no direct evidence of it. Mr Brzostowski referred the Court to the decision of Tryon & Clutterbuck (No 2)[16], where Warnick and Strickland JJ, in their joint judgment, referred at [132] to the decision of Atkinson J in the Supreme Court of Queensland, Court of Appeal, in Astway Pty Ltd v Counsel (sic) of the City of the Gold Coast[17], where his Honour said:
[43]…JD Heydon’s Cross on Evidence at [1170] explains that retrospectant evidence is a type of circumstantial evidence in which the subsequent occurrence of an act, state of mind or state of affairs, justifies an inference that the act was done or that the state of mind or affairs previously existed…[18]
[16] [2009] FamCAFC 176; (2009) FLC 93-412
[17] [2008] QCA 073
[18] (2009) FLC 93-412 per Warnick and Strickland JJ at [132]
Mr Brzostowski also referred to paragraph [133] of their Honours’ judgment, where they quoted from the decision of Griffith CJ in Cullen v Welsbach Light Co of Australasia Ltd[19] where his Honour said at 1002:
If the only party in possession of direct evidence withholds it he cannot complain that effect is given to the circumstantial evidence.[20]
[19] (1907) 4 CLR 990
[20] (2009) FLC at [133]
Senior Counsel for the wife submitted that the wife had made a greater contribution to the disclosed assets, both financially and non-financially. He submitted that the Court does not know the outer perimeters of the husband’s actual business operations. Even if it were not a business that attracted a goodwill component, the real problem is that the Court has been denied a true portrayal of the husband’s income and his (omitted) stock.
Counsel for the husband submitted that it had been difficult for the husband to meet the wife’s case, as she continued to maintain that the business was valued at $80,000.00. Notwithstanding the issue of some twenty subpoenas to the husband’s business suppliers the wife had failed to provide any valuation that supported her asserted value of $80,000.00. On the other hand, the husband had provided full disclosure of his business records, which provided a basis for his estimate of $4,860.00 for the business. The business is based in a double garage on a country road. The value of the business was no more than the value of the stock in hand.
It was further submitted that, despite the production of some nine volumes of exhibits nothing had been produced to show that there were substantial amounts of cash being derived from the husband’s hobby as a (omitted) breeder. Neither the wife nor X could attest to seeing the husband sell any (omitted).
Mr Dalzell submitted that the evidence showed that the husband had made a “paper loss” of some $21,000.00 in the previous year. He had provided to the best of his ability an adequate explanation of this loss. There was no evidence of any hidden funds.
Mr Dalzell described his client as a simple man running a small business. Like many sole traders he had declared a loss for that year, a minimal loss of $21,000.00. He paid his outstanding debts from his sales. There was a discrepancy between the husband’s ability and his bookkeeping.
It was submitted that the husband sought a 50:50 split with perhaps a subsection 75(2) adjustment. The Applicant’s claim, he submitted, relied on conjecture rather than true circumstances.
The Proper Approach to Determination of a Property Application
The way a court approaches property matters has been authoritatively set out by the Full Court of the Family Court in its decision of Hickey & Hickey[21] where their Honours said at [39]:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s. 79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…[22]
[21] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143
[22] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 per Nicholson CJ, Ellis and O’Ryan JJ at [39]
In this case, there is a dispute between the parties as to the size of the asset pool, which is the first matter that needs to be resolved.
The Parties’ Property
The areas of dispute between the parties involve two main issues:
a)The value of the husband’s business; and
b)The value of the husband’s (omitted).
The parties have filed a document entitled “Schedule of Agreed and Disputed Assets and Liabilities”, from which it can be seen that the wife assesses the net value of the asset pool at $374,891.00 whilst the husband’s estimate comes in at $296,851.00.
The differences appear to be these:
a)The wife estimates the value of the Mitsubishi (model omitted) motor vehicle in the husband’s possession at $7,000.00, whilst the husband claims it is only worth $4,000.00;
b)The wife estimates the value of the Hyundai (omitted) motor car in the husband’s possession at $4,000.00, whilst the husband claims it is only worth $2,000.00;
c)The husband estimates the value of the Hyundai (omitted) motor car in the wife’s possession at $11,00.00, whilst the wife claims it is only worth $6,900.00;
d)The wife estimates the value of the husband’s (omitted) supplies business (presumably including the (omitted)) at $80,000.00, but the husband claims it is only valued at $4,860.00; and
e)The wife claims the boat and trailer sold by the husband for $2,000.00 should be added back as an asset on the husband’s side.
The parties agree that the liabilities, both on the wife’s side, amount to $7,438.00.
On examining the Schedule, the first thing to be stated is that there is a mathematical error in the wife’s estimate of the net value, because the value of the boat and trailer appears twice. In the wife’s calculation of the total assets, the boat and trailer is shown as a value of $2,000.00 on the husband’s side, whilst the husband values it at nil, because it has been sold. However, in the box entitled “Add-back”, each party shows the sale of the boat and trailer at $2,000.00 on the husband’s side.
The $2,000.00 for the boat and trailer cannot be considered twice. The wife, in her re-sworn affidavit of 1 December 2010, expresses scepticism about the husband’s claim to have sold the boat and trailer for $2,000.00, saying:
At separation, the husband owned a boat and trailer. In his Financial Statement sworn 12 August 2009, he claims to have sold it for $2,000.00. The name of the purchaser has not been disclosed. The boat and trailer remained in the rear yard of Property M. It was still there on 19 March 2009. Exhibited to me at the time of swearing this Affidavit and marked with the letter “V” (page 93) is a photograph of the boat which the husband claims to have sold in October 2008 taken on 19 March 2009.[23]
[23] Affidavit of Ms Schilling 1.12.2010 at [80]
The wife, if she claims that the husband has not sold the boat, produces no evidence of its value. The husband asserts that he sold the boat and trailer for $2,000.00 after the parties separated. Clearly, the asserted sale price of $2,000.00 should be added back into the asset pool as an asset held by the husband, but it cannot be claimed twice.
The parties do not agree on the value of the Mitsubishi (omitted) motor vehicle in the possession of the husband. The wife claims it to be worth $7,000.00. The husband claims it to be worth only $4,000.00. Neither party has produced a valuation of the vehicle. The wife said in cross-examination that she obtained valuations of the vehicles from the local Mitsubishi dealer, but produced no written document to that effect. She said that the dealer did write the values down on a piece of paper but she did not know what had happened to that piece of paper.
It is a matter of public knowledge that a Mitsubishi (omitted) is a light truck sold throughout Australia, but the Court has no other knowledge of the value of such a vehicle. The husband states that he purchased it in September 2004 for $21,990.00 with the assistance of a loan from a finance company.[24] He gave no evidence as to how he had arrived at his estimate of the vehicle’s value at the time of the hearing.
[24] Affidavit of Mr Schilling 12.8.2009 at [26]
The parties do not agree on the value of the husband’s Hyundai (omitted) motor car. The husband claims it is only worth $2,000.00. The wife puts its value at $4,000.00. Again, neither party has produced any documentary evidence of the valuation of the car. The husband has not given any evidence as to how he arrived at his estimate of the car’s value. The wife is presumably relying on the information she obtained from the local Mitsubishi dealer.
The husband states that he purchased the car in September 2000 for $19,500.00 with the aid of a finance company. He provides no other evidence that would assist the Court in ascertaining the value of the car.
The wife has a Hyundai (omitted) motor car which she purchased in August 2007. She estimates its value at $6,900.00, but said in evidence:
“My little car is worth probably about $6,000.00… I got it in 2007”, so it could be either 2006 or 2007”.[25]
[25] Transcript 1.12.2010 page 20
The evidence of the values of the parties’ cars is scant, to say the least. Senior Counsel for the wife has submitted that the cars are not worth “big money”. The vehicles were all purchased in or before 2007. Nevertheless, that does not greatly assist the Court in arriving at a value of the assets for the purpose of ascertaining the net value of the asset pool.
The only effort that has been made to provide values of the parties’ cars for the purpose of this matter seems to have been made by the wife, who approached the local Mitsubishi dealer for valuations. Regrettably, the document upon which the dealer wrote the estimates of the cars’ values was not available.
It is unsatisfactory to have to rely on hearsay evidence of what was said by another person and written in a document. The document cannot speak for itself, as it is not in evidence and the wife does not know its whereabouts.
The husband has not provided any evidence about the value of any of the vehicles at all.
The Court is left with the wife’s account of the values of the vehicles, which was not challenged by the husband’s counsel. I propose to accept the wife’s figures for the three vehicles, which at least come from the one source.
Thus, I find the following:
a)The Mitsubishi (omitted) motor vehicle in the possession of the husband will be valued at $$7,000.00;
b)The Hyundai (omitted) motor car in the possession of the husband will be valued at $4,000.00; and
c)The Hyundai (omitted) motor car in the possession of the wife will be valued at $6,900.00.
The wife claims that the husband’s (omitted) supplies business, including his sales of (omitted), should be valued at $80,000.00, whilst the husband submits that the business should only be valued at $4,860.00.
Senior Counsel for the wife submitted that there was very significant circumstantial evidence that the husband must have had income of a very high order of magnitude to fund the deficits that the husband in his business of about $21,000.00 in 2007, about $7,000.00 in 2008 and about $7,000.00 in 2009. Even allowing for depreciation, “one can think in terms of $30,000.00 unaccounted for”. Mr Brzostowski went to submit:
You know, is it only the $30,000.00 that’s missing. Is it really that tight, or are we looking at another $60,000 or $80,000 or $90,000. We don’t know.[26]
[26] Transcript 2.12.2010 page 88
Counsel for the husband submitted that to extrapolate a value for the business of $80,000.00 from an unexplained loss of $30,000.00 was no more than a gross speculation.
However, it was conceded by counsel for the husband had given evidence in cross-examination that at separation that he owned (omitted) to the value of $6,000.00 and that they should be regarded as an asset in the hands of the husband[27].
[27] Transcript 2.12.2010 page 103
Senior Counsel for the wife asked the husband:
…Now, you say in your very first affidavit in these proceedings, on page 2 of the very first affidavit, you are listing assets, and you name a number of them, the last of which ‘business in my name operated as a sole trader (stock on hand) and you give a figure of $6,000?
The husband replied:
Stock-taking, yes.
Mr Brzostowski then asked:
Yes. Does that include (omitted)?
The husband replied:
(omitted) have got nothing to do with my business.[28]
[28] Transcript 2.12.2010 page 56
A short while later, the husband was asked what was the value of the (omitted) that he had at separation and he replied:
About $6000 I put down.[29]
[29] Ibid page 57
There is evidence that the husband retains a large number of (omitted), although he claims that the keeping of (omitted) is a hobby and not a business. The wife refers to scanning advertisements of (omitted) for sale, but neither she nor the daughter who gave evidence could provide any direct evidence of the husband actually selling any (omitted).
Black and Kellner[30] deals with the situation where the assets of the parties could not be ascertained in full because of obvious non-disclosures by one party. In those circumstances, the court may proceed to make a finding that was less favourable to that party than might otherwise be the case.
[30] supra
It was also submitted that, following Gould & Gould[31], K & K[32] and Weir and Weir[33], that the Court should increase the asset pool to take into account non disclosure by the husband.
[31] supra
[32] (2003) FLC 93-135
[33] supra
The difficulty with this argument is that whilst the husband did not disclose the value of the (omitted) which he kept as a hobby, there is otherwise no evidence of any deliberate non-disclosure by the husband of the true worth of his business. The evidence which is before the Court supports the finding that it is a small business and that the husband “lives out of the till” in conducting many transactions in cash. There is no evidence which would lay the foundation for a finding that the husband’s business should be valued at $80,000.00, or anything like that figure. The wife certainly gave evidence that at one stage the husband showed her an amount of $10,000.00 in cash, which he kept in the freezer. The vast amount of material subpoenaed and produced has not revealed any persuasive at all.
Senior Counsel for the wife asked, rhetorically perhaps:
Is it really that tight, or are we looking at another $60,000 or $80,000 or $90,000. We don’t know.[34]
[34] Transcript 2.12.2010 page 88
Mr Brzostowski submitted that the figure of $80,000.00 was not just “a figure plucked from the air”. Maybe not, but it appears to me to be speculative and not supported by evidence. Circumstantial evidence will only lead to an inference about a fact or circumstance if it is of sufficient weight to allow such a finding. In my view, the evidence here does not. It seems clear that this was a small business conducted by a relatively unsophisticated man whose bookkeeping skills are rudimentary.
I am satisfied that I should find that the value of the husband’s business to be $4,860.00.
I will also find that he has (omitted) to the value of $6,000.00. There is evidence that he has constantly kept (omitted) as a hobby and he estimated the value of the (omitted) at separation to be $6,000.00.
I find the non-superannuation asset pool to be:
a)The former matrimonial home at Property M $145,000.00[35]
[35] Agreed value
b)Wife’s (omitted) account (omitted) $994.00[36]
[36] Agreed value
c)Wife’s (omitted) account (omitted) $989.00[37]
[37] Agreed value
d)Wife’s (omitted) account (omitted) $3,600.00[38]
[38] Agreed value
e)Husband’s (omitted) account (omitted) $836.00[39]
[39] Agreed value
f)Husband’s (omitted) account (omitted) $4,684.00[40]
[40] Agreed value
g)Wife’s (omitted) investment $13,082.00[41]
[41] Agreed value
h)Husband’s Bendigo Bank investment $5,127.00[42]
[42] Agreed value
i)Mitsubishi (omitted) motor vehicle (with husband) $7,000.00
j)Husband’s Hyundai (omitted) motor car $4,000.00
k)Wife’s Hyundai (omitted) motor car $6,900.00
l)Husband’s (omitted) supplies business $4,860.00
m)Husband’s (omitted) $6,000.00
n)Wife’s furniture and furnishings $20,000.00[43]
o)Husband’s furniture and furnishings $5,000.00[44]
p)Husband’s trailer $100.00[45]
q)Added back value of boat and trailer sold by husband $2,000.00[46]
Total non-superannuation assets $228,372.00
[43] Agreed value
[44] Agreed value
[45] Agreed value
[46] Agreed value
The parties’ liabilities are agreed as totalling $7,438.00. They are both on the wife’s side, being:
a)(omitted) Credit Union Hyundai car loan $6,966.00
b)Credit card debts $472.00
Total liabilities $7,438.00
The net value of the non-superannuation asset pool stands at $220,934.00.
Both parties have superannuation.
The wife has superannuation agreed by the parties to be $61,434.00.
The husband has superannuation agreed by the parties to be $19,583.00.
The total value of the parties’ superannuation is agreed by the parties at $81,017.00.
The net total, combining the net non-superannuation asset pool and the superannuation pool amounts to S301,951.00.
The Parties’ Contributions
The marriage between the parties was a long marriage. The parties commenced living together in 1971 and were married on (omitted) 1972. They separated on 21 May 2007 and were divorced on 15 August 2009.
The period of cohabitation is approximately 36 years.
Neither party brought any substantial assets into the marriage. They had a modest amount of furniture and personal effects. Initially they lived in rental accommodation. The husband owned a motor car.
The husband worked during the marriage and his financial contribution was greater than the wife’s on some occasions.
The husband became unemployed in 1982 and later obtained work at the (omitted). He left that job after a short time and went back on unemployment benefits.
The husband left the wife and their three children in 1987 and remained away for about three to five months. He paid no money to the wife during that time and she had to apply for social security to support the children and herself. When the husband returned he was unemployed.
The wife worked on a casual part-time basis during the marriage, commencing in 1973 when she worked on the night shift at the (omitted) in (omitted) for about six weeks. She worked at the (omitted) during the (omitted) from 1982 to 1991. She (duties omitted) for 10 to 12 hours a day.
The wife obtained permanent work in 1995 at (omitted) in Property M.
The wife applied the proceeds of her earnings towards the upkeep of the family, particularly the children. She purchased various appliances and items of furniture. The wife estimates that she was largely responsible for the vast bulk of the mortgage repayments.
The wife received a gift of $10,000.00 from her father in 1997.
The wife was the primary caregiver for the parties’ three children whilst they were growing up. Both parties worked around the house.
Taking into account the wife’s financial contributions by working at various times during the marriage and receiving the sum of $10,000.00 from her father, and noting the husband’s periods of unemployment and, particularly, the fact that he left the wife and children for several months in 1987, leaving them without financial support, I find that the parties’ financial and non-financial contributions under paragraphs 79(4)(a) and (b) of the Family Law Act, and contributions to the welfare of the family under paragraph 79(4)(c) of the Act favour the wife.
I assess the parties’ contributions at 55% to the wife and 45% to the husband.
Other Factors Taken into Account under subsection 79(4)(d) to (g)
Paragraph (d) of subsection 79(4) requires the court to take into account the effect of any proposed order on the earning capacity of either party.
There are no proposed orders that would have an effect on the earning capacity of the wife. However, the wife seeks an order that, as part of the distribution of property between the parties, the husband should transfer to her all of his interest in the former matrimonial home at Property M.
If this order were to be made, it would have an effect on the husband, because his (omitted) supplies business is located on the premises. He would not only have to re-house himself, he would have to re-locate his business. This would not only require him to demolish the (omitted) he has built there, he would have to re-locate all his stock from the (omitted) supplies business.
The effect on the husband would not appear to be permanent, but such an order would clearly have a short term effect on his earning capacity.
The Court is required by paragraph (e) of subsection 79(4) to consider the matters referred to in subsection 75(2) so far as they are relevant.
The parties’ ages and the state of their respective health are clearly relevant.
The wife was born on (omitted) 1955. She is now 57 years old. She is apparently in good health.
The husband was born on (omitted) 1950. He is currently 61 years old and will turn 62 in two months’ time. His evidence is that he sustained a back injury in 2000 and suffers from back pain. Annexed to his affidavit of 10 November 2010 is a report dated 10/2/2010 from Dr A, his treating general medical practitioner.
Dr A reported that he examined the husband’s medical notes examined him. He stated:
He was noted to have a L4/5 disc herniation compromising the right L5 nerve root at its origin (CT Lumbosacral spine 18/08/1994). This leads to severe back pain restricting his ability to continue his usual work and apparently led to his retirement. He uses regular oral pain relieving medicines to continue his daily activities.
On examination he was found to have very restrictive back movement and focal tenderness at the lower lumbar spine although no neurovascular compromise was noted.[47]
[47] Affidavit of Mr Schilling 10.11,2010 Annexure “C”
The wife’s Financial Statement filed on 12 November 2010 shows her total average weekly income to be $706.00 and her total personal expenditure to be $837.00 per week.
The wife gives the total value of her property as $111,065.00 and the total gross value of her superannuation as $61,434.20. Her liabilities are $7,438.00. She has no financial resources.
The husband filed a Financial Statement on 10 November 2010. He gives his total average weekly income as $252.50 and his total personal expenditure as $228.99. He also shows the total value of the property he owns as $96,677.96 and the total gross value of his superannuation as $19,593.00. He has no liabilities and no financial resources.
The wife does not give evidence of any physical or mental restriction on her capacity for gainful employment.
The husband’s medical report from Dr A throws some doubt on his future physical capacity for work:
Considering the above mentioned facts it seems unlikely that he will be able to return tot work in full functional capacity in the future and his back problem would be a major hurdle in him attaining a full time job.[48]
[48] Affidavit of Mr Schilling 10.11.2010 Annexure “C”
Neither party has the care or control of a child of the marriage who has not attained the age of 18 years. The children of the marriage are all adults.
Neither party has a duty to maintain a child or another person.
Neither party has a responsibility to support another person.
The wife does not claim to be eligible for a pension, allowance or benefit.
The husband disclosed in his Financial Statement that he was in receipt of Newstart allowance from Centrelink in the sum of $248.50 per week.
The parties are both separated and divorced. The orders sought by the parties may affect their standard of living.
Neither party gives evidence of cohabiting with another person.
Child support under the Child Support (Assessment) Act 1989 is not relevant, as the children of the marriage are all adults and live away from home (s. 75(2)(na) and s. 79(4)(g)).
Senior Counsel for the wife submits that the Court should take into account that the husband has, since separation, been living in the former matrimonial home, which is unencumbered, whilst the wife has been living in rental accommodation. The wife’s evidence is that she was obliged to leave because of the behaviour of the husband. She deposed in her affidavit that on 7 October 2008 the Police at Property M applied for an Interim Apprehended Violence Order on her behalf.
The wife also deposed in her affidavit that the mortgage encumbering the former matrimonial home was discharged on 21 November 2003. Thus, the husband has been living in the home rent free and mortgage free. On the other hand, she deposed that she had paid out a total of $20,385.00 in rent.
Senior Counsel for the wife submitted that the Court should take this factor into account, referring to the decision in Lalor and Lalor.[49] In that case, the Full Court of the Family Court found “quite unimpeachable” this finding by the trial Judge:
…Firstly, Mr Lalor has occupied the matrimonial home since the parties physically separated in May of 1987. This of course has meant that he has not had to pay any rent, also the home is unencumbered and thus he has not faced any mortgage repayments…Mrs Lalor has, of course, paid rent during this time and as her husband was using an asset at the very least jointly owned by her there must be an adjustment made in her favour for this…[50]
[49] (1989) 14 Fam LR 282; (1990) FLC 92-164.
[50] (1990) FLC 92-164 at 78,133-4
In my view, the facts of this case are similar. This appears to be a fact that, in the opinion of the Court, the justice of the case requires to be taken into account.
There is no financial agreement binding on the parties.
The parties both have superannuation interests. Whilst the wife’s superannuation is significantly greater than that of the husband, neither party is in a position to access their superannuation entitlement at this stage.
The husband’s back condition is, in my view, a factor to be taken into account in his favour. The fact that the wife has been living in rented accommodation since separation whilst the husband has been living in the former matrimonial home rent free and untroubled by mortgage payments is a factor to be taken into account in favour of the wife.
The only other Order made under this Act that affects the parties to the marriage is the Divorce Order made on 15 August 2009. It has no financial impact on the parties.
Setting off these factors against each other, it appears that there should be a slight adjustment in favour of the wife.
The adjustment to the parties’ contribution based entitlements is assessed at 5% in favour of the wife.
Thus, I assess the parties’ entitlements at 60% to the wife and 40% to the husband. However, the Court must consider whether this would be just and equitable.
Just and Equitable
Subsection 79(2) of the Family Law Act provides that the Court shall not make an order under s. 79 unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. It has been held that subsection 79(2) should be read in conjunction with subsection 79(4) and is not a condition precedent to a consideration of s. 79(4):
What is just and equitable depends on a proper consideration of the factors set out in s. 79(4).[51]
[51] In the Marriage of W (1980) 6 Fam LR 538; FLC 90-872 per Nygh J at 549
The concern here is that the order that the wife seeks requiring the husband to transfer his interest in the former matrimonial home to her would entail the husband moving himself out and relocating his business. This would have a considerable effect on him, as it would presumably involve the dismantling of the (omitted) and other facilities on the property and re-establishing himself elsewhere.
The wife’s proposed orders do not mention any financial adjustment to be made by her, but presumably the husband retaining his (omitted) supplies business would be seen as a sufficient set-off, as the wife has advanced the case that it is worth some $80,000.00. Regrettably, that contention has not been accepted, and the husband’s business and (omitted) combined have been assessed as worth only $4,860.00 and $6,000.00 respectively, a total of $10,860.00.
The wife’s reasons for wanting to move back into the former matrimonial home are that:
a)she would like to have a place where her adult children and grandchildren can visit her and stay in comfort when they visit, rather than in her current two bedroom unit; and
b)she does not believe that she would be able to find a similar house in Property M at the same value of $145,000.00.
The wife’s reasons are not overwhelmingly convincing. She provides no evidence of comparable real estate values in Property M in support of her claim.
The wife also claims that she wishes to the home that she left because she feared for her life and because of “years of physical and mental abuse…”[52]
[52] Affidavit of Ms Schilling 1.12.2010 at [102]
The wife’s reasons for regaining possession of the former matrimonial home are not convincing and I am not satisfied that making such an order would be just and equitable.
However, if the Court makes an order that would see the husband remaining in the former matrimonial home, the wife will either continue to live in rented accommodation or she will need to purchase somewhere else to live. If the wife has to re-house herself, this will involve her in expense which she would otherwise not have had.
It follows that, if it is just and equitable not to require the husband to leave the former matrimonial home, there should be a further small adjustment in favour of the wife to allow for the fact that she will have to re-house herself. In my view the Court should allow a further adjustment of 5%.
Thus, the wife will receive 65% of the net value of the matrimonial assets and the husband will receive 35%.
The parties do not seek any superannuation splitting order. It follows that they will retain their superannuation interests intact.
The net total of the assets amounts to $301,951.00.
The wife will be entitled to 65% of the net assets, which amounts to $196,268.00 in round figures. The husband will be entitled to 35% of the net assets, which amounts to $105,683.
She will retain:
a)her (omitted) account (omitted) $994.00
b)her (omitted) account (omitted) $989.00
c)her (omitted) account $3,600.00
d)her (omitted) investment $13,082.00
e)her Hyundai (omitted) motor car $6,900.00
f)her furniture and furnishings $20,000.00
g)her superannuation $61,434.00
$106,999.00
The husband will retain:
a)his (omitted) account (omitted) $836.00
b)his (omitted) account (omitted) $4,684.00
c)his Bendigo Bank investment $5,127.00
d)his Mitsubishi (omitted) motor vehicle $7,000.00
e)his Hyundai (omitted) motor car $4,000.00
f)his (omitted) supplies business $4,860.00
g)his (omitted) $6,000.00
h)his furniture and furnishings $5,000.00
i)his trailer $100.00
j)proceeds of sale of boat and trailer $2,000.00
k)his superannuation $19,583.00
$59,190.00
The husband will also receive the former matrimonial home at Property M, which has an agreed value of $145,000.00.
In order for the wife to receive her entitlement of $196,268.00, the husband will have to pay her the sum of $89,269.00, which should be paid within three months.
The husband will also be ordered to transfer to the wife a number of items referred to in paragraph 31 of the wife’s affidavit of 1 December 2010. No value has been attached these items and they would appear to have only sentimental value. It seems regrettable that this issue could not have been resolved significantly earlier. The wife deposed in her affidavit that the husband contacted her solicitors on 2 June 2010, offering to make “certain items” available for collection the next day. The wife went the next day at the appointed time, but:
Some goods which he offered to give me were not made available by him. I refused to take what he offered.[53]
[53] Affidavit of Ms Schilling 1.12.2010 at [32]-[33]
The wife clearly had no immediate need of any of the items if she refused to take any of them at the time, as she set out in her affidavit. They appear to have only sentimental value. The husband can make them available within seven days.
If the husband is unable to raise the amount of $89,269.00 within the time specified, then the former matrimonial home will need to be sold so that the wife can receive her entitlement.
I certify that the preceding one hundred and sixty-three (163) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 28 May 2012
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