Schrader& Hope

[2018] FCCA 2410

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCHRADER& HOPE [2018] FCCA 2410

Catchwords:
FAMILY LAW – Property dispute between self-represented parties – de facto relationship from 2002 to 2013 – husband’s earnings greater but wife worked and was primary carer of 3 children – husband wasting considerable amounts on mistress and motor vehicles – both parties evidence inadequate and incomplete – court doing best it can in the circumstances – contributions assessed 60/40 in favour of wife – wife’s future needs greater – final division 75/25 in favour of wife just and equitable.

Legislation:

Family Law Act 1975

Cases cited:

Stanford v Stanford [2012] HCA 52

Applicant: MR SCHRADER

Respondent: MS HOPE

File Number: MLC 7441 of 2014

Judgment of: Judge Burchardt

Hearing date: 19 July 2018

Date of Last Submission: 19 July 2018

Delivered at: Dandenong

Delivered on: 6 September 2018

REPRESENTATION

The Applicant: In person

The Respondent: In person

ORDERS

1. The Respondent retain Property A for her sole use and benefit and be solely liable for and indemnify the Applicant with respect to:

   (a)Payments due pursuant to the mortgage (or any other encumbrance) secured against the title to the property; and

   (b)All other outgoings relating to the property.

2. The Applicant do all such acts and things and sign all such documents as may be required to transfer to the Respondent at the expense of the Applicant all of his right, title and interest in the real property situate at and known as Property A.

3. If the Applicant refuses or neglects to sign any document necessary to implement these orders within 14 days of a request to do so, pursuant to s.106A of the Family Law Act 1975, the Registrar of the Federal Circuit Court of Australia is hereby appointed to execute all documents in the name of the Applicant and do all acts and things necessary to give validity and operation of such documents so as to effect the transfer to the Respondent.

4. That in relation to the Applicant’s accumulation component of his superannuation interest in (omitted superannuation fund):

   (a)There be an allocation for the purposes of Section 90MT(4) of the Family Law Act 1975 of a base amount of $80,000 from the Applicant’s accumulation component in the Fund, to the Respondent, Ms Hope;

   (b)That pursuant to Section 90MT(l)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the Applicant’s accumulation component in the Fund, Ms Hope shall be entitled to be paid an amount calculated in accordance Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount of $80,000 pursuant to subclause (a) hereof of these Orders and there shall be a corresponding reduction in the superannuation interest of the Applicant to whom such a splittable payment would have been made but for this Order;

   (c)That paragraph 5(b) of these Orders shall take effect from the Operative Time, being the fourth business day after the date on which a certified sealed copy of this Order is served upon the Trustee of the Fund;

   (d)That having been afforded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the Fund;

   (e)That the Trustee of the Fund and the parties in accordance with the obligations set out under the Family Law Act 1975, the Family Law (Superannuation) Regulations 2001 and the Superannuation Industry (Supervision) Act and Regulations 1994,  shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of and make the payment to Ms Hope in accordance with this Order;

   (f)That each party and the Trustee has liberty to apply, on not less than three (3) business days' notice, in respect to the implementation of the super splitting orders.

5. That within 28 days of this Order being made:

   (a)Ms Hope shall serve a copy of this Order upon the Trustee of the Fund;

   (b)Ms Hope shall serve a Notice upon the Trustee of the Fund pursuant to Regulation 72 of the Family Law (Superannuation) Regulations 2001.

6. That the Applicant be and is hereby restrained by himself, his servants and/or agents from executing a Binding Death Benefit Nomination in favour of any person or doing any act or thing that would render any part of his accumulation interest in the fund a non-splittable payment within the meaning of Regulation 12 of the Family Law (Superannuation) Regulations 2001 AND the Trustee of the Fund is ordered to give effect to this Order.

7. Each party retain to the exclusion of the other the chattels in their own possession.

8. The funds held by Perry Weston on Trust $1,200 be released to the Respondent, MS HOPE.

IT IS NOTED that publication of this judgment under the pseudonym Schrader & Hope is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

MLC 7441 of 2014

MR SCHRADER

Applicant

And

MS HOPE

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute between former de facto partners that has been rendered forensically extremely difficult by the self-representation of the parties, (whom for convenience I will refer to as husband and wife).  The evidentiary landscape is sparse indeed.  The applicant husband seeks a property division of 25 per cent in his favour and 75 per cent to the wife.  The wife seeks in effect, as best I understand it as the matter was never articulated, I think, in terms, that all of the parties' property vest in her, save for personal chattels belonging to the husband.

2. For the reasons that follow, I am going to order that there be a division of property as to 25 per cent to the husband and 75 per cent to the wife.

Agreed or uncontroversial matters

1. The husband was born 1972 and the wife 1976.  They commenced cohabitation in early 2002.  Their children, [X] born 2007, [Y] born 2009 and [Z] born 2010 followed.

2. In approximately 2008, the husband ceased his prior employment and commenced to conduct a business known as Company A.  That company is now in liquidation.

3. The parties bought the former matrimonial home in Property A for $362,500 in 2009, and the husband was removed from the property on 28 November 2013 after a fight.

4. The wife and children have continued to live in the family home ever since, and the children spent, according to the father, about 105 per nights per annum with him pursuant to Court orders made by consent before Judge Jones on 6 July 2016.

5. The husband is employed as (occupation omitted), and the wife is a full time homemaker and carer.

The Parties' affidavits

1. A considerable amount of the voluminous material on the Court file relates to the parenting dispute that was resolved in 2016.  Once the Independent Children's Lawyer's appointment was discharged upon the making of final parenting orders, the parties have been self-represented and the matter has in a sense somewhat limped to trial.  The parties' Financial Statements were filed as long ago as March 2017, and much of the affidavit material filed goes to unproductive discovery disputes between the parties.  Neither party has filed a single affidavit giving a coherent history of the parties' relationship and financial affairs.

2. It seems clear that the husband was incarcerated on two occasions for multiple breaches of Intervention Orders.  I note that according to the Family Report dated 23 May 2016 he was jailed in April 2014 for 10 days and given a 12 months CCO, and then subsequently served approximately 18 months in jail being released in March 2016.  He was also, if I understand the matter correctly, convicted of assault upon the wife.

3. Picking up the narrative, as I think is appropriate in the circumstances, with the parties' Financial Statements, that of the husband filed 2 March 2017 reveals that he had wages of $1,486.08 a week, an interest in the home at Property A worth $400,000, and an interest in Company A worth an estimate of $60,000.  His superannuation was worth an estimated $117,000, and his 50 per cent share of the mortgage was $160,000.  He also deposed to unpaid tax of an estimate of $17,000.

4. The wife's Financial Statement filed 2 March 2017 deposed to income of $748.50 per week, composed of statutory benefits and rent from Mr Hope the wife’s father.  The asserted total value of the wife’s property was just over a million dollars.  The matrimonial home was valued at $520,000 with a mortgage of $351,478.32, and the wife's superannuation was $17,217.50.  The wife also deposed to an interest in Property B, but if I understand the matter correctly, that was a factory that has now been sold.

5. The wife's affidavit filed 2 March 2017 merely annexes bank documentation relating to bank accounts held by the children.  Her second affidavit filed the same day in my view takes the matter no further.  The husband's affidavit filed 21 June 2018 is entirely concerned with allegations as to non-disclosure on the part of the wife.

6. The wife's affidavit filed 3 July 2018 is difficult to paraphrase consisting of 32 pages of closely typed material, much of which is either irrelevant or inadmissible.  I note that since 1 July 2016 the wife’s father has been living in the former family home and he is now 70 years old.  The wife is paid a carer's allowance of $413 per week.  Substantial complaint is made about non-discovery.

7. The affidavit details the commencement of the relationship and birth of the children.  She goes on to depose to the commencement of Company A in 2008.  She deposes that the father was in debt at the commencement of the relationship, although there are no details given as to the extent of this.  She details the purchase of an expensive Vehicle A in 2010, which if I understand the matter correctly was subsequently repossessed.  The affidavit makes considerable complaint about the husband's conduct during the relationship, including his family violence, infidelity and alleged inept financial dealings.

8. The affidavit notes that the wife still owes her former lawyers, Perry Weston, $43,000 having already paid $15,000.  She deposed to be $9,000 in arrears with the mortgage with (omitted mortgagee), and she deposed to the sale of the property in (omitted) by mortgagee auction in May 2015.

9. The husband's affidavit filed 10 July 2018 takes issue with the number of wife’s assertions, and sets out at paragraph 13 a number of payments allegedly received by the wife since separation, including $50,000 (omitted mortgagee) mortgage redraw, $22,000 extracted from the children's bank accounts, and $47,000 accessed allegedly by the wife by way of hardship payments from her superannuation.  Further, following the sale of the (omitted) property, there was $17,000 dispersed from the pool by Judge Jones, together with additional monies from Perry Weston such as there is now only $1,200 with Perry Weston on trust.  The husband also deposed that the liquidation of Company A would have no net proceeds at completion of liquidation which leaves only the matrimonial home, superannuation and the $1,200 in trust to be provided.

10. The wife filed at the hearing of the matter an affidavit sworn on 18 July 2018.  It constitutes a comprehensive response to the husband's affidavit material and makes further complaints about the alleged non-disclosure on the part of the husband.  I note that she makes reference to a partner, Mr S who has recently obtained employment.  Nothing else is said about Mr S as to where he lives or what he does, and to the extent to which he might be supporting the wife and her household.  The affidavit annexures large amounts of bank statements which are at least in part designed to show the father's wastage on his mistress over time.

The submissions made and evidence given at Court

1. What follows is taken from my notes.

2. In his opening, the husband said that the parties separated in 2013.  The children lived with the mother and spent 105 nights a year with him.  He pays Child Support as assessed.  They met in 2001 and commenced a relationship in 2002 which produced three children.  The pool consisted of the business in liquidation.  The factory had been sold and would likely generate a $12,000 shortfall.  There would be capital gains tax payable (no indication was given as to how much).  He said he had proven debts in relation to the business, for materials in the sum of $44,000, and holiday pay $30,429.  A final dividend of some 90 to 97 per cent was likely.  The wife's employee entitlements were paid after separation.  His superannuation was $153,000 about the end of 2017 and it is now about $160,000.  The former matrimonial home is worth $760,000 and at separation the mortgage was $260,000.  The unit had been sold and the monies put into trust, which were $35,000 net.  The wife received four payments and he received two.  There is still $1,200 in trust.  This is obviously the money with Perry Weston.

3. The children’s bank accounts had been emptied and the wife had withdrawn all of her superannuation of $47,000.  There was a $50,000 mortgage redraw after separation.  The wife received $17,000 from the sale of the unit plus two other sums of $2,500 and $3,000, whereas he had received only $7,500.  He can get a job.  His chattels have no value.  He sought a 25/75 division in the wife's favour, but that superannuation be excluded.  He said it was inevitable that the house would be sold.

4. The husband then was sworn and adopted his Financial Statement and affidavits.  Under cross-examination by the self-represented wife, the husband said he had paid the mortgage on Property A as long as he could but then he was jailed.  He did not pay for the property at (omitted) for a year.  He stuck to the proposition that he had paid $415 per week for Property A until he was jailed on 9 November 2014.  His last payment on the (omitted) property was when he was jailed.  When cross-examined about the monies owing to Perry Weston, the husband said he had sought an injunction because he had bumped into a friend who had told him things that caused an injunction to be applied for.  He denied that this was a spiteful or non-genuine application.  The husband conceded he spent about $40,000 on his affair over a year.  He agreed that separation took place on 28 November 2013.  When cross-examined about debts to his family and criminal lawyers he said he had not heard from his family lawyer who was not chasing him.  He would not know where he is.

5. When cross-examined about a (omitted jewellery) valued at $7,500 bought in 2013, he said this was stolen from his sister's house.

6. Some of the cross-examination, which at times came close to resembling a family argument than a proceeding in a Court, assumed an easy familiarity with the parties' affairs that the Court of course does not have.

The submissions and evidence of the wife

1. In opening, Ms Hope confirmed that she met the husband in 2001 and they entered a de facto relationship in 2002.  They started the business in 2008 solely in the husband's name.  The husband had made an application for an urgent injunction in 2014 having bumped into a friend.  She only had five days to get a lawyer.  A custody agreement was sought.  The husband sought an Intervention Order which included the children.  He made an assertion about a sexual assault on the middle child which was unsubstantiated.  He was jailed for 16 months.  He had not properly disclosed.  He sold a (omitted) motor vehicle.  He had not made disclosure about the investment property.  She had had $33,000 released on hardship grounds and had redrawn the mortgage $22,000 since separation.  The mortgage is now $320,000.  The property is worth $760,000 but work needs to be done before it can be sold.  The main bedroom has been lifted up by the neighbour's tree.  The property has gone up $250,000 since separation.

2. The wife hopes to retain Property A.  She sought that the Court consider her legal fees.  She sought a superannuation split and sought payment of the monies that the husband would obtain in the liquidation.  As indicated, this appears to be everything there is.

3. The wife was called and adopted her affidavits as true and correct.

4. When challenged as to disclosure, she said she had provided the documents sought.  It is difficult to get statements from (omitted mortgagee) because she is behind in her payments.  She had provided bank statements.  She had withdrawn $22,000 on the mortgage in 2014 at separation and the mortgage had increased to $290,000 as a result.

5. The wife candidly admitted emptying the children's bank accounts in the total of $18,000.  She had herself deposited the monies to those accounts, to which she was a signatory.  She had taken out her superannuation in $10,000 lots over the last three years.  She complained that the husband had sacked her from her employment with Company A and repossessed her car.

6. The wife said that including the carer's pension and other benefits, her annual income was approximately $22,000.  She has no rent assistance from her father.  A girlfriend lives with her but pays no money.  Her partner lives with her but her children do not.  The girls share the master bedroom and her son has a room.  The partner does not live with them.  Her father contributes about $400 per month to the costs of the family.

7. Much of the cross-examination, it seemed to me, covered matters of no significance such as Property B that has now been sold.  Similarly, the wife's cosmetic surgery seems to be a matter of no moment.  The wife confirmed that she is about $9,000 behind in the mortgage.  Child Support is now paid directly but is still sometimes late.  She started the business with the husband and was the Business Development Manager working mainly from home.  She delivered pamphlets.  Turnover had increased to $2 million.  She did not know about it being $3-$4 million.  She did not claim her holiday pay in the liquidation, but was paid $4,855 in 2014 for her holiday pay.  Her solicitors have a caveat over the property.

Final submissions

1. The husband said the wife had done a good job.  He had a good relationship with the children.  He had made mistakes since separation.

2. The wife said that the father had provided no documents throughout the court process.  His initial application was dishonest.  She had paid the mortgage for the last four and a half years and has no superannuation left.

Stanford v Stanford

1. The Court's first task to ascertain the legal and equitable interests of the parties and to determine whether a property adjustment is just and equitable.  In this case, each of the parties desire such an adjustment and it is plainly appropriate there be one.

The pool

1. Doing the best I can the pool appears to consist of:

   Assets:

   ·Value of former matrimonial home $760,000;

   ·Husband's likely distribution in the liquidation $70,000 (approximately 95 per cent of the $74,429 asserted);

   ·$1,200 held in trust by Perry Weston;

   ·Half the Husband's superannuation $80,000;

   Liabilities:

   ·Mortgage $320,000.

   TOTAL      $591,200

2. It should be noted that I have included half the husband’s superannuation in the pool.  While there is no direct evidence save the estimate in the husband’s Financial Statement, it seems more probable than not that his superannuation has increased significantly in the five years since separation.  Furthermore, albeit that the relationship lasted eleven years, it is likely that he had already accrued some of his superannuation before it commenced.  Doing the best I can do, as

   
   

   I have said above, half his superannuation should be included.

3. I have not included any amount for possible Capital Gains Tax.  There is no evidence at all of how much these might be, and further it would appear to relate to the business that has been liquidated.

Contributions

1. The relationship lasted from 2002 until 2013.  The wife worked for appreciable periods of this time and was also as I find the primary homemaker and carer of the children.

1. The husband likewise worked, but on his own case he dissipated at least $40,000 on his mistress over about a year.  His dealings with the Vehicle A seem to have been feckless and cost quite a substantial amount of money.  In circumstances where the property pool in terms of hard assets is so small these are not insignificant matters.

2. Doing the best one can in the light of the absence of clarity in the parties' evidence, I would assess the contributions as 60 per cent by the wife and 40 per cent by the husband.

3. It should be noted that the husband's business endeavours ultimately have been disastrous.  Nonetheless it is well-established, and in my view only commonsense, that both parties should wear the negative outcome just as they would have shared the beneficial outcome had there been one.

Future needs

1. Neither side has deposed, as far as I am aware, to any matters affecting their health likely to impact upon their future.

2. The wife's earning capacity will necessarily be significantly reduced by the need to care for both the children who are still relatively young, and by the care of her father for an unascertainable, but undoubtedly it is to be hoped, lengthy period.  Nothing was said by the parties themselves of any moment as to the wife's future earning capacity in the sense of her qualifications and past employment history, apart from her employment by Company A until the end of the relationship.  It is implicit in the father's formal position that he accepts that the wife's future earnings are likely to be substantially less than his own.

3. Insofar as both sides make allegations of wastage against the other, I have already dealt with the husband's wastage above, and in my view, while the wife has undoubtedly received more interim amounts than the husband, she has had to support herself and her family and these matters should not be held against her.

4. In all the circumstances, and most particularly, the husband's greater earning capacity and the wife's need to care for the children, a further adjustment of some 15 per cent is appropriate.

Conclusion

1. In all the circumstances, in my view a 75/25 split of the parties' total assets including superannuation is indeed appropriate.  The husband will keep his half superannuation that I have included in the pool together with the $70,000 in the liquidation.  The resultant total of $150,000 is only $2,200 more than the 25 per cent of $591,200.  I will not make him pay that amount.  It is less than 0.05 per cent of the pool and further adjustment is in my view inappropriate. 

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 6 September 2018