Scott and Kent (No.2)
[2013] FCCA 128
•26 April 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SCOTT & KENT (NO.2) | [2013] FCCA 128 |
| Catchwords: FAMILY LAW – Property – application for property settlement – superannuation splitting order – contributions by the parties – gifts of money by applicant’s parents – adjustments under Family Law Act 1975 s.75(2) – whether just and equitable. |
| Legislation: Family Law Act 1975, ss.75, 79, 81, 90MT, 106A |
| Cases cited: Gosper & Gosper (1987) 90 FLR 1; 11 Fam LR 601; FLC 91-818 Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 Kessey & Kessey (1994) 18 Fam LR 149; FLC 92-495 Pellegrino & Pellegrino (1997) 22 Fam LR 474; FLC 92-789 Stanford v Stanford [2012] HCA 52 Williams & Williams (1985) 10 Fam LR 355; FLC 91-628 |
| Applicant: | MS SCOTT |
| Respondent: | MR KENT |
| File Number: | SYC 2313 of 2009 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 3 July & 21 November 2012 |
| Date of Last Submission: | 5 August 2012 |
| Delivered at: | Sydney |
| Delivered on: | 26 April 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jackson |
| Solicitors for the Applicant: | Anne Day & Associates Lawyers |
| Counsel for the Respondent: | The Respondent appeared in person |
ORDERS
In accordance with Section 90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of MR KENT from his interest in the [P] Superannuation ([P]) MS SCOTT is entitled to be paid by the Trustee of [P] the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using the base amount of $60,000.00 and there is a corresponding reduction in the entitlement MR KENT would have had but for these Orders.
The operative time for payment under the above Order (1) is four (4) business days after the service of the final Orders on the Trustee of [P] being [C] Superannuation.
This Order binds [C] Superannuation.
Within seven (7) days the Respondent is to do all acts and things and sign all documents necessary to transfer to the Applicant all of his right title and interest in the Toyota Corolla motor vehicle registered no. [omitted].
The Applicant is to indemnify the Respondent and keep him indemnified against any claims in respect of any debt owing in relation to the said Toyota Corolla motor vehicle.
Except as otherwise provided each party as against the other is solely entitled to the exclusion of the other of all other property including choses-in-action in the possession of that party at the date of these Orders.
In the event that either party refuses or neglects to execute any deed or instrument having been directed to do so by these Orders then the Registrar of this Court is hereby empowered pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the deed or instrument.
Written submissions in support of any application for costs are to be filed and served within 21 days of the date of these Orders and written submissions in opposition to any such application are to be filed and served within a further period of 14 days.
IT IS NOTED that publication of this judgment under the pseudonym Scott & Kent (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 2313 of 2009
| MS SCOTT |
Applicant
And
| MR KENT |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for settlement of property. The Applicant is the former wife of the Respondent. The property pool in contention is relatively modest, consisting mainly of the Respondent’s superannuation and a motor car.
The Respondent opposes the Application.
Orders Sought
The Applicant filed an Amended Application on 2nd July 2012 in which she sought these orders:
1. The husband’s superannuation interest with [P] Superannuation, Membership Number: [omitted], be split to create a superannuation interest for the wife as follows:
(a)That a base amount of $60,000.00 (“the base amount”) is allocated as required by Section 90MT of the Family Law Act 1975 to the wife[1] out of the husband’s interest in the [P] Superannuation.
(b)The wife is entitled to be paid the base amount of each splittable payment that becomes payable out of the interest held by the husband in [P] Superannuation.
(c)That whenever the Trustee makes a splittable payment out of the husband’s interest in [P] Superannuation the Trustee shall make a corresponding reduction in the entitlement the husband would have but for these orders.
(d)The operative time for payment under this Order is 4 business days after the service of the Order on the Trustee.
(e)This Order binds the Trustee of [P] Superannuation.
2. That within seven (7) days the husband do all acts and things and sign all documents necessary to transfer to the wife all his right title and interest in the Toyota Corolla motor vehicle registered [omitted].
3. Except as otherwise provided, each party as against the other is solely entitled to the exclusion of the other of all other property (including choses-in-action) in the possession of that party at the date of these Orders.
4. In the event that either party refuses or neglects to execute any deed or instrument in order to give validity to these Orders, then a Registrar of this Court is hereby empowered pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the person who has so refused or neglected to comply.
[1] The Amended Application refers to the parties as “the wife” and “the husband” throughout, but in my view this is no longer appropriate. The parties are divorced and the Respondent has remarried. Accordingly, they will be referred to as the Applicant and the Respondent.
The Respondent filed an Amended Response on 27th June 2012 in which he seeks these Orders:
Assets - Superannuation
(1)Ms Scott’s proposed order number 1 to be set aside, that is, my superannuation interest with [P] Superannuation scheme ([P]) (membership[ number [omitted]) not be split 50/50 at this stage of the property dispute because such proposed split is not just and equitable.
(2)My superannuation interests in [T] Super (membership number [omitted]) and [M] membership number [omitted]) which have been rolled over into my [P] superannuation on 12 April 1999 ($1,196.03) and 32 July 1998 ($679.10) respectively be recognised and excluded from the valuation of my [P] superannuation on the basis that these interests represent my employment in [omitted] both of which had been terminated prior to 2 February 1998 and therefore represent my asset accumulated before marriage and thus not subject to the potential split.
(3)Earnings or notional earnings on my superannuation interests stated at (2) above be recognised and excluded from valuation of my [P] superannuation on the same basis as (2) above.
(4)If the court directs that my superannuation interest in [P] super should be split, the relevant period should only be from 1 July 1999 until 1 February 2008 on the basis that I commenced a de facto relationship with Ms Scott in July 1999 and that a family break-down occurred in February 2008 when I was living separately from Ms Scott.
(5)It is just and equitable that I keep my superannuation interest and Ms Scott keeps her superannuation interests in [F] Super without any need for splitting.
Assets – Other
(6)Ms Scott continue to keep and use her Toyota Corolla car registered [omitted] which was financed by a loan from Toyota Finance.
(7)Ms Scott return to me all photographs in her possession that feature me or me and people other than Ms Scott and her family.
(8)Ms Scott return to me about half of all photographs in her possession that were taken prior to around 1 January 2008 that feature [X] or [X] and people other than Ms Scott or her family.
Liabilities
(9)Ms Scott pay me half of the credit card debt that was accumulated during the married relationship (old joint credit card debt) and in respect of which Ms Scott did not reimburse me, that is, Ms Scott pay me 50% of old joint credit card debt as at 1 February 2010 by way of reimbursing me 50% for every credit card repayment I made and will make.
(10)Ms Scott pay me half of the personal loan debt that was accumulated during the married relationship (old joint personal loan debt) and in respect of which Ms Scott did not reimburse me, that is, Ms Scott pay me 50% of old joint personal loan debt as at 1 February 2010 by way of reimbursing me 50% for every repayment I made.
Background
These proceedings were conducted simultaneously with parenting proceedings relating to the parties’ son, who was born [in] 2003. He lives predominantly with the Applicant.
The parties were married [in] 1999 but lived together prior to that date. The Applicant claims that they commenced living together in February 1997 and the Respondent claims that their cohabitation did not commence until 1st July 1999.
They separated in 2008 (January, according to the Applicant, on 19th September, according the Respondent) and their divorce became final on 23rd November 2009.
The Applicant was born [in] 1977.
The Respondent was born [in] 1975.
There is one child of the marriage, [X], who was born [in] 2003. He lives with the Applicant.
Both parties have re-partnered.
The Applicant has formed a new relationship with Mr F, whom she met in 2008.
The Respondent has remarried. He married Ms A [in] 2010. They have one child who was born on [in] 2012.
Counsel for the Applicant, Mr Jackson, prepared a Case Summary Document for the purpose of the hearing. The Case Summary includes a Summary of Relevant Facts which has been utilised in part for the purpose of this decision.
On the Applicant’s evidence, the parties commenced cohabitation in February, 1997, at which time neither one had any significant assets. At that time the Applicant was undertaking a [omitted] degree and the Respondent was working for an [omitted] firm. They commenced living at the Applicant’s parents’ home in [omitted].
In 1998 the Respondent commenced working for [omitted], his current employer.
In 1999 the Applicant commenced working at [omitted].
The parties purchased a home unit at [R] for $290,000.00. The Applicant’s parents provided a deposit of $58,000.00.
The parties were married [in] 1999. Their son [X] was born [in] 2003.
The parties sold the home unit at [R] in 2005. The net proceeds of sale amounted to $30,000.00, of which $15,000.00 went towards a personal loan in the Respondent’s name.
In 2006 the Applicant’s parents gave her an amount of $86,000.00, which she used to purchase the [K business].
The parties separated in February 2008, according to the Applicant. Their son [X] lived with her. She claims she did not receive Child Support from the Respondent for four years.
Between April 2009 and January 2010 the Applicant paid the sum of $300.00 per week to the Respondent, which was used to pay of his credit card debts.
Early in 2012 the Applicant sold the business being [K].
In January 2012 the Respondent purchased a house in [O].
In February 2012 the Respondent commenced paying child support to the Applicant.
Evidence
The Applicant relied on the following:
a)her affidavit of 28th June 2012;
b)her Financial Statement of 28th June 2012; and
c)the affidavit of Mr S of 2nd July 2012.
The Respondent relied on
a)his affidavit of 8th June 2011[2];
b)his affidavit of 22nd June 2012;
c)his affidavit of 3rd July 2012; and
d)his Financial Statement of 22nd June 2012.
[2] The Respondent filed two affidavits dated 8 June 2011, one relating solely to parenting matters and the other relating to property matters.
The Applicant’s evidence was that she and the Respondent purchased the unit in [R] for $290,000.009 in 1999. Her parents gave them $58,000.00 for the deposit. During the marriage the parties travelled for several months every year, increasing the mortgage to fund the travel.[3]
[3] Affidavit of Ms Scott 28.6.2012 at paragraph [58]
After their son was born, the Applicant gave up work to care for him on a full time basis for the first six months of his life, and then she returned to work on one day a week until the child was a year old. She then returned to work on three days a week.[4]
[4] Ibid at [59]-[60]
The Applicant deposed that:
In 2005 Mr Kent and I sold the unit at [R] and received net proceeds of $30,000.00. we paid about $15,000.00 towards a personal loan in Mr Kent’s name. The balance was used for living expenses.[5]
[5] Affidavit of Ms Scott 28.6.2012 at [62]
As to the [business], the Applicant deposed:
In 2006 my parents gave me $86,000.00 to purchase [K business]. I had to close the business in early 2012. This was the source of my income until 2012. The premises the [business] was located in were old and owned by the [S]. No renovations were done by the [S] (sic) although it was promised they would be. Due to the age of the building I was not becoming compliant with [omitted] (sic) Regulations. It was too expensive to undertake the renovation work, so I closed the [business] as I did not have the capital need(ed) to fix the building.[6]
[6] Ibid at [63]
The Applicant deposed that when she and the Respondent separated in 2008 the Respondent had credit card debt. She had used the cards but did not receive any statements and was not sure of the debts that the Respondent had. She deposed:
I paid Mr Kent $300.00 per week from April 2008 until January 2010 towards these debts. I paid the funds in(to) a joint account. The credit cards were in Mr Kent’s name.[7]
[7] Ibid at [65]
The Applicant relies on an affidavit by Mr S of 2nd July 2012. Mr S is an accountant and an annexed to his affidavit is a report in which he values the interest of the Respondent in [P] Superannuation at $122,252.82 as at 20th November 2010. Mr S was not required for cross-examination.
In his affidavit of 8th June 2011 the Respondent claims that the parties’ de facto relationship commenced in July 1999:
…because that’s when we began living together as a de facto couple in our own unit in [R]. In 1997 I lived with my mother in [omitted]. In 1998 I lived with my mother on some days and with Ms Scott’s parents on other days. By the beginning of 1999 I was living only with Ms Scott’s parents. However, prior to July 1999 we did not live as a de facto couple. For example we did not share the same bed until about May 1999 and we did not run the household while living with Ms Scott’s parents. It was just a case of us still dating and lodging there to save money.[8]
[8] Affidavit of Mr Kent 8.6.2011 at paragraph [1]
The Respondent deposed that he entered the parties’ de facto relationship with three superannuation assets:
a)[T] Super valued at $1,196.03 as at 12th April 1999;
b)[M] valued at $679.10 as at 31st July 1998; and
c)[P] valued at $8,010.09 as at 30th June 1999.
In respect of those superannuation interests, the Respondent claims in his affidavit at paragraph [4]:
The above superannuation assets should be recognised as my personal property not accumulated during de facto relationship or marriage and therefore not subject to the potential split.[9]
[9] Ibid at [4]
The Respondent claimed in his affidavit that after the parties separated in around August 2008 he and the Applicant agreed that she would keep the Toyota Corolla motor car and she would pay the car loan from Toyota Finance.
He also deposed that he and the Applicant agreed that she would retain all of the items of furniture, white goods and electrical appliances that were joint property and were situated at the Applicant’s rental accommodation in [omitted]. He calculated the market value of those items and the Applicant paid him a sum equivalent to 50% of the total.
The Respondent took issue with the Applicant about the question of liabilities for the parties’ credit card debts, all of which were in his name. He deposed:
Ms Scott used at least 80% of these cards and she always received copies of statements from me.[10]
[10] Ibid at [17]
The Respondent calculated that as at or about 1st February 2010, when he claims that the Applicant ceased making payments towards the credit card debts, a total of $17,480.78 was still owing, of which he claims that the Applicant is responsible for one half, being $8,740.39.
The Respondent asserts that between 26th February 2010 and 28th April 2011 he has paid an amount of $2,447.83 off the old credit card debts.[11] He also asserts that between 1st March and 28th September 2010 he paid an amount of $3,522.21 off an old personal loan from the Community First Credit Union, thereby paying the loan of in full. He claims that the applicant’s share of that debt is $1,761.11.
[11] Affidavit of Mr Kent 8.6.2011 at [31]
The Respondent was highly critical of the Applicant’s contributions as homemaker and mother, saying:
Ms Scott’s contribution to the family’s welfare was small. She basically wasn’t a good wife or a good home maker. To put it bluntly, I made a very big mistake when I married Ms Scott.[12]
[12] Ibid at [62]
The Respondent reiterated that information in his affidavit of 22nd June 2012. However, he provided some updating information about child support, stating:
In January 2012 Ms Scott applied for child support, stating that her income was zero and that she no longer runs her business.
Ms Scott did not tell me what happened to that business or whether it was sold. I am now paying child support $575 per month from February 2012.[13]
[13] Affidavit of Mr Kent 22.6.2012 at [29]
The Respondent commented on the Applicant’s Amended Application, Financial Statement and affidavit of 28th June 2012 in his affidavit of 3rd July 2012, claiming that the Applicant has not made a full financial disclosure. As to her Financial Statement he asserts:
At item 2 it is stated that Ms Scott’s total personal expenditure is $663 and her total average weekly income is $133.That means Ms Scott’s personal expenditure exceeds her income by $530 weekly. That further means that if Ms Scott has any additional expenditure someone other than Ms Scott has to pay for it.[14]
[14] Affidavit of Mr Kent 3.7.2012 at [6]
The Respondent also deposed that the Applicant did not disclose her father as a financial resource:
At item 57 Ms Scott did not disclose other financial resources she can access. Her multi-millionaire father and ex-prominent [occupation omitted] Mr S is able to give her large amounts of money upon request. He gifted her large amounts of money upon request in the past – e.g. around $50,000 in 1999 and around $80,000 in 2007.[15]
[15] Affidavit of Mr Kent 3.7.2012 at [10]
Both the Applicant and the Respondent gave oral evidence, but the cross-examination of each was directed almost entirely towards parenting matters, except that the Respondent asked the Applicant about his payments of child support. She confirmed that he was paying child support.
Application to Reopen
The Applicant applied to reopen her case on 10th September 2012 for the purpose of tendering correspondence from the trustee of the Respondent’s Superannuation Fund. The Proceedings were re-listed on 21st November 2012 and the Applicant’s solicitor tendered letters dated 18th July and 23rd August 2012 from the [C] Superannuation relating to the Applicant’s proposed Orders.
The letter of 18th July 2012 states that the [P] Superannuation Board has been renamed [C] Superannuation. The letter of 23rd August 2012 gives approval to a draft minute of Order forwarded by the Applicant’s solicitor.
Submissions
Both parties filed written submissions. The Applicant’s submissions were filed on 25th July 2012. The Respondent’s submissions, in the form of an affidavit, were filed on 7th August 2012. Whilst the Respondent did not seek leave to file an affidavit after the hearing, and any factual matters raised should be disregarded, it would not do justice to him not to give his submissions proper consideration, merely because he chose to file them in the form of an affidavit.
Counsel for the Applicant submitted that there does not appear to be any dispute as to the asset pool, and prepared a useful balance sheet. As to contributions, he submitted that the parties were in a fairly long marriage of over ten years in duration and that the contributions favour the Applicant by about 58% to 42%. In particular, he pointed to contributions by the Applicant’s parents of $58,000.00 in 1999 and $86,000.00 in 2006. As to the weight that should be attached to those contributions, he referred the Court to the authorities of Gosper & Gosper[16], Kessey & Kessey[17] and Pellegrino & Pellegrino[18].
[16] (1987) 90 FLR 1; 11 Fam LR 601; FLC 91-818
[17] (1994) 18 Fam LR 149; FLC 92-495
[18] (1997) 22 Fam LR 474; FLC 92-789
In addition, he submitted that the Applicant had, until February, “had to endure an absence of child support.”[19]
[19] Applicant’s Submissions page 18 at [84]
Counsel for the Applicant submits that the s.75(2) factors should lead to an adjustment of 12% in the Applicant’s favour, provided that the proposed parenting orders are consistent with her proposal, for the reasons that:
a)the Respondent’s income greatly exceeds that of the Applicant; and
b)the Applicant will have more of a burden of financial responsibility in raising the parties’ son, [X], who is still now only ten years of age.
In summary, Mr Jackson submitted that, if there were any tangible assets to divide, there should have been a division of the net matrimonial pool of 70% in the Applicant’s favour to the Respondent’s 30%. However, the Applicant seeks a superannuation splitting order and submits that the Respondent’s superannuation entitlement is “the only species of property of any substance. It also reflects a significant compromise on the (Applicant’s) part.”[20]
[20] Ibid page 20 at [91]
The Respondent’s submissions as to property orders are essentially contained in his Amended Response and in his affidavits. Essentially, his case appears to be that there should not be a superannuation splitting order because the Applicant has not made a full financial disclosure, including disclosing her own superannuation entitlement. He agrees that the Toyota Corolla should be transferred to the Applicant, as that was what the parties had agreed upon when they separated.
He also seeks an order that the Applicant repay to him an amount equivalent to half of the joint credit card debts and personal which he paid off after the parties separated.
The Proper Approach to determination of a Property Application
The way a court approaches property matters has been set out by the Full Court of the Family Court of the Family court of Australia in its decision of Hickey & Hickey[21]. In the decision, the Full Court held at [39] that the 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 and 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 (citations omitted).[22]
[21] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
[22] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 at [39] per Nicholson CJ, Ellis & O’Ryan JJ
The Court should also have regard to the recent decision of the High Court of Australia in Stanford v Stanford[23], where the majority (French CJ, Hayne, Kiefel and Bell JJ) set out the way a court hearing a property application should deal with the requirement in subsection 79(2) of the Act that prescribes:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
[23] [2012] HCA 52
Their Honours held at [36]:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s. 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured.[24]
[24] [2012] HCA 52 at [36]
The three fundamental propositions are:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s. 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added)…
38.Second, although s. 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion…
40.Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s.79(4).[25]
[25] [2012] HCA 52 at [37]-[38] & [40]
Clearly, the decision in Stanford means that the Court must consider the requirements of s.70(2) before embarking on the four-step process set out in Hickey, or at least before taking the second step, identifying and assessing the contributions of the parties. In other words, satisfaction that it is “just and equitable” to make an order is a condition precedent to considering the matters referred to in s.79(4). First of all, the Court must be satisfied that it is just and equitable to make an order at all.
It would follow that the Court must consider whether it is just and equitable to make a particular order when the Court is considering “what order (if any)” should be made under s.79. Thus, the requirements of s.79(2) must again be borne in mind, in my view, after the Court has undertaken the third step in the process, as the Full Court of the Family Court has held in Hickey.
Just and Equitable
Applying the decision of the High Court in Stanford, the first matter to be considered is whether it is just and equitable to make an order under s.79. In my view, it is just and equitable, as the parties are now divorced and the Respondent has in fact remarried. Their communication is very poor in respect of matters concerning their son, and their communication appears to be, for the most part, restricted to text messages and emails.
There is a need to make such orders as will finally determine the financial relationship between the parties and avoid further proceedings between them (see Family Law Act, s.81).
The Parties’ Property and Liabilities
The first matter to be dealt with is the Respondent’s claim in his Amended Response and in his affidavits of 8th June 2011 and 22nd June 2012 that his superannuation interests which he took into the relationship should not be included in the asset pool. His claim is most succinctly set out in at proposed orders (2) and (3) in his Amended Response, where he says:
(2)My superannuation interests in [T] Super (membership number [omitted]) and [M] (membership number [omitted]) which have been rolled over into my [P] superannuation on 12 April 1999 ($1,196.03) and 31 July 1998 ($679.10) respectively be recognised and excluded from the valuation of my [P] superannuation on the basis that these interests represent my employment in [omitted] both of which had been terminated prior to 2 February 1998 and therefore represent my asset accumulated before marriage and thus not subject to the potential split.
(3)Earnings or notional earnings on my superannuation interests stated at (2) above up until 30 June 1999 be recognised and excluded from the valuation of my [P] superannuation on the same basis as (2) above.
The Respondent’s contention is misconceived. The superannuation interests to which he refers are assets which he brought into the marriage. Section 79 does not only apply to assets which came into existence or came into the hands of one of the parties after the date of marriage or the start of cohabitation.
The Respondent has disclosed that he owns in his own name a property at [O] which he values at $620,000. It is subject to a mortgage which currently stands at $631,600.00. Thus, it would appear that the Respondent has a negative equity of some $11,600.00.
The Applicant’s counsel has prepared a balance sheet and says that “There does not appear to be any dispute as to the extent” of the net asset pool, but it is clear that what has been omitted is the Toyota Corolla motor car which the Applicant discloses in her Financial Statement although the Respondent does not refer to it.
At Item 40 of the Financial Statement the Applicant discloses a 2007 Toyota Corolla registration no. [omitted] in the names of the Respondent and herself. She gives the value of the car as $5,000.00 and claims that she is entitled to a 50% share.
Non-Superannuation Asset Pool
I find the value of the non-superannuation asset pool to be:
a)Applicant’s St. George bank Account $500.00
b)Applicant’s household contents $2,000.00
c)Respondent’s property at [O] $620,000.00
d)Respondent’s Bank Account $250.00
e)Respondent’s 50% share in Honda Jazz motor car $3,000.00
f)Respondent’s household contents $ 4,000.00
g)Toyota Corolla motor car $ 5,000.00
TOTAL $634,750.00
Liabilities
The Applicant’s balance sheet, both in the Case Summary and in the Submissions also contains a reference to a debt owing by the Applicant to the [S] in the sum of $26,000.00. An examination of the Applicant’s Financial Statement shows that the debt is actually $6,000.00. Item 53 of the Financial Statement states:
[S] of NSW (remaining rent owing regarding [omitted] business – in negotiation) $6,000.00.
I find the parties’ liabilities to be the following:
a)Applicant’s debt to the [S] $6,000.00
b)Amount owing on mortgage of [O] $631,000.00
c)Respondent’s St George Bank loan $10,000.00
d)Respondent’s ANZ MasterCard debt $6,315.00
e)Respondent’s Westpac MasterCard debt $5,559.00
TOTAL $658,874.00
Superannuation
I find the value of the parties’ superannuation to be:
a)Applicant’s [F] Super $24,000.00
b)Respondent’s [P] Superannuation $122,252.00
TOTAL$146,252.00
The net value of the parties’ non-superannuation pool is minus $24,124.00
The net total, combining the net non-superannuation pool with the superannuation, amounts to $122,128.00.
The Parties’ Contributions
The parties had very little in the way of assets when they commenced cohabitation. The Respondent had some superannuation, as he deposes in his affidavit.
The parties are at odds about the date when their cohabitation commenced. The Applicant claims that it was in about February 1997, although she does not provide any detail.
The Respondent claims that their cohabitation did not start until they moved into their first home together in July 1999. He claims in his affidavit that he was still living with his mother in 1997 and he spent some time living with his mother and some time living with the Applicant’s parents in 1998. He further stated that it was not until the beginning of 1999 that he started living full-time in the home of the Applicant’s parents.
Neither party was cross-examined about the discrepancy of about two years and five months in the time when they started cohabitation. However, the absence of detail in the Applicant’s affidavit and the detailed evidence in the Respondent’s affidavit material allows a finding that the parties were not in any way cohabiting in 1997 or 1998.
In my view, the beginning of 1999, when the Respondent claimed that he was living on a full time basis in the home of the Applicant’s parents, is the appropriate starting date. It is immaterial that the parties did not share a bed in the Applicant’s parents’ home until May of that year.
The parties cannot agree on a date of separation, either. The Applicant claims that they separated at “the beginning of 2008”.[26] The Respondent deposed in his affidavit of 22nd June 2012 that:
The final family break-up occurred in February 2008 at which time both parties were living separately.[27]
[26] Affidavit of Ms Scott 28.6.2012 at [6]
[27] Affidavit of Mr Kent 22.6.2012 at attachment 2 paragraph [3]
In my view, the Court should regard February 2008 as the date of separation. Thus, the matter should be considered on the basis that the parties were together not for over ten years, as the Applicant claims, but for approximately nine years.
The Respondent was in full-time employment during the time the parties cohabited. The Applicant initially worked full-time until their son [X] was born, at which time she became his full-time caregiver for six months, before returning to work part-time, first one day a week and then three. She later purchased a [omitted] business which has ceased trading.
The factor that, in my view, takes the parties’ contributions away from equality is the gifts from the Applicant’s family, first the gift of $58,000.00 in 1999[28] and then a gift of $86,000.00 to purchase the ill-fated [business] in 2006.[29]
[28] Affidavit of Ms Scott 28.6.2012 at [57]
[29] Ibid at [63]
Counsel for the Applicant has submitted that these contributions should be attributed entirely to the Applicant, citing the decisions of Gosper & Gosper[30], Kessey & Kessey[31] and Pellegrino & Pellegrino[32].
[30] (1987) 90 FLR 1; 11 Fam LR 601; FLC 91-818
[31] (1994) 18 Fam LR 149; FLC 92-495
[32] (1997) 22 Fam LR 474; FLC 92-789
Gosper is a decision of Fogarty J in the Family Court. The principles to be derived from this decision are:
a)Where there has been a gift by a relative to one or both of the parties the first step is to determine the ownership of that gift. Normally the transfer of the title to the property would be the strongest indicator of the intention of the donor.
b)The next step is to consider the application of s.79 to all of the property of the parties, including property received by way of gift from a third party. This would involve consideration of the question of contributions under s.79(4)(a) and if relevant, the s.75(2) factors.
c)Where a relative of one of the parties gifts property to both of the parties to the marriage it is open to the Court to look at the actuality and treat that as a “financial contribution made directly on behalf of” the spouse relative.
Kessey is a decision of the Full Court of the Family Court (Baker, Finn and McCall JJ) in which their Honours cited the decision in Gosper with approval. The Full Court held that a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes that it was not the intention of the parent to benefit only his or her child.
Pellegrino is a decision of Chisholm J in the Family Court. His Honour followed the decisions of Gosper and Kessey and held that I determining the intention of the wife’s parents in providing a benefit to the parties, judicial notice may be taken of the fact that parents frequently make provision for their children in a manner which does not involve the formulation or consideration of whether they intend to benefit their own child, or both parties to the marriage. In this case, the wife’s parents made a generous provision to the parties which they intended to benefit their daughter, and, although they were aware that it would also benefit the husband, the provision of rent-free accommodation should be treated as a contribution made on behalf of the wife.
In my view, the above authorities clearly indicate that the gifts of money by the Applicant’s parents in this should be treated as a contribution made on behalf of the Applicant.
It is also relevant that the Applicant had the primary care of the parties’ child from the date of separation in February 2008 for a period of four years until February 2012 without receiving child support payments from the Respondent. This can be regarded as a contribution to the welfare of the family under s.79(4)(c) (see Williams & Williams[33]).
[33] (1985) 10 Fam LR 355; FLC 91-628
In my view the contributions favour the Applicant. The parties’ contributions are assessed at 55% by the Applicant and 45% by the Respondent.
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 does not appear to be any effect on the earning capacity of either party.
Paragraph (e) of subsection 79(4) requires the Court to take into account the matters referred to in subsection 75(2) so far as they are relevant.
The Applicant was born [in] 1977. She is 36 years of age and apparently in good health.
The Respondent was born [in] 1975. He is 38 years of age and also in apparent good health.
The Respondent’s income greatly exceeds that of the Applicant. He is employed by [omitted] and earns a before-tax income of $1,971.00 per week. He also receives rent in the amount of $600.00 per week.[34]
[34] Respondent’s Financial Statement 22.6.2012 Part D
The Applicant’s Financial Statement shows she receives child support from the Respondent in the sum of $133.00 per week and receives a further $783.00 per week from her partner Mr F.[35]
[35] Applicant’s Financial Statement 29.6.2012 Parts D and F
The Applicant has the care and control of a child of the marriage who has not attained the age of 18 years. The child [X] was born [in] 2003 and is therefore ten years and [omitted] months old. He will not attain the age of 18 years until [omitted] 2021.
The Respondent has remarried. His wife has an average weekly income of $494.00.[36] They have a young child named [omitted] who was born [in] 2012. The Respondent has a duty to maintain his child.
[36] Respondent’s Financial Statement 22.6.2012 Part E
The Applicant has also re-partnered. She discloses in her Financial Statement that her partner, Mr F, has an average weekly income of $1,500.00 per week.
The Respondent pays child support for [X] in the sum of $133.00 per week (s.75(2)(na); s.79(4)(g)).
The parties are divorced by an Order of this Court which became final on 23rd November 2009.
Although counsel for the Applicant has submitted that the s.75(2) factors call for an adjustment in the Applicant’s favour of 12%, I am more of the view that 10% is appropriate in the circumstances.
The parties’ entitlements are therefore assessed at 65% to the Applicant and 35% to the Respondent. However, the Court must still consider whether orders to be made reflecting those percentage entitlements would be just and equitable. The Respondent has already submitted that a superannuation splitting order would not be just and equitable.
The fact is that the only property of any substance, apart from two motor cars of relatively low value, one of which is apparently still subject to finance, two modest bank accounts and some household contents, are the parties’ superannuation interests. The Respondent’s property at [O] is the subject of a mortgage, the amount currently owing under which exceeds the estimated value of the property by about $11,600.00. It is safe to say that the Court will not be making any orders against the Respondent’s real estate.
The value of the Respondent’s superannuation, at $122,252.00, is more than five times greater than the Applicant’s modest superannuation of $24,000.00.
It is just and equitable for the Respondent to retain his motor car, his bank account, his real estate and his household contents. It is also just and equitable for the Respondent to transfer to the Applicant the interest that he has in Toyota Corolla motor car, subject to her continuing to indemnify him against undisclosed amount of the debt still owing on the car, for which she is required to pay $113.00 per week.
I am not satisfied that the Respondent has proved that the Applicant has any liability to repay him in respect of the credit card debts.
I note the submission by Mr Jackson of counsel that there should be a superannuation splitting order because the Respondent’s superannuation entitlement is the only species of property of any substance. This submission is clearly correct.
Mr Jackson also submits that the Order sought, with a base amount of $60,000.00, reflects a significant compromise on his client’s part. Bearing in mind the fact that the Court has found the Applicant’s entitlement to be 65% of a modest asset pool rather than the 70% he submitted on her behalf, it would appear that the “compromise” to which he refers is not quite as significant as he asserts.
Nevertheless, in all the circumstances, I am satisfied that a superannuation splitting order as sought along with an order that the Respondent transfer his interest in the Toyota Corolla to the Applicant and an order that the parties otherwise retain all other items in their possession, will be just and equitable.
I will order accordingly.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 24 April 2013
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