SCOTT & SCOTT
[2015] FCCA 2394
•3 September 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SCOTT & SCOTT | [2015] FCCA 2394 |
| Catchwords: FAMILY LAW – Property – long marriage – initial contributions – Kennon argument – s.75(2) factors. |
| Legislation: Family Law Act 1975, ss.75, 78, 79,100B, 106A |
| Amador & Amador (2009) 43 Fam LR 268 Kennon & Kennon (1997) FLC 92 – 757 Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 Stanford & Stanford (2012) 247 CLR 108 Bevan & Bevan (2013) FLC 93-545 Pierce v Pierce (1998) FLC 92-844 Williams & Williams [2007] FamCA 313 S & S [2003] FamCA 905 |
| Applicant: | MR SCOTT |
| Respondent: | MS SCOTT |
| File Number: | ADC 870 of 2014 |
| Judgment of: | Judge Harland |
| Hearing dates: | 6, 7, 8 July 2015 |
| Date of Last Submission: | 8 July 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 3 September 2015 |
REPRESENTATION
| Counsel for the Applicant: | Ms Morosini |
| Solicitors for the Applicant: | Di Morosini & Co |
| Counsel for the Respondent: | Mr Mahadeva |
| Solicitors for the Respondent: | Legal Projects Pty Ltd |
ORDERS
That the applicant husband retain as his sole property without further claim of the respondent wife, the whole of his interest in the property situate at Property S, in the State of South Australia being the whole of the land comprised and described in Certificate of Title Register Book Volume [omitted] (“the Property S property”).
That the respondent wife shall within 14 days of the date of this order remove the caveat registered over the Property S property at the expense in all things of the wife.
That thereafter the applicant husband shall indemnify the respondent wife and keep her forever indemnified against any liability for all outgoings in respect of the Property S property.
That the respondent wife retain as her sole property without further claim of the applicant husband, the whole of her interest in the property situate at Property L, in the said State being the whole of the land comprised and described in Certificate of Title Register Book Volume [omitted] (“the Property L property”).
That thereafter the respondent wife shall indemnify the applicant husband and keep him forever indemnified against any liability for all outgoings in respect of the Property L property.
That within 30 days of the date of these orders each party shall do all such things and execute all documents necessary to transfer the property situated at Property A, in the said State being the whole of the land comprised and described in Certificate of Title Register Book Volume [omitted] (“the Property A property”) to the sole name of the respondent wife at the cost of the respondent wife;
Pending transfer of the property provided for in order 6, the respondent wife shall discharge the mortgage secured on the title of the Property A property and pay to [X] the sum of $8,000.
That in the event that the respondent wife does not comply with order 7 then within 7 days each party shall do all things necessary to cause the Property A property be forthwith placed on the market for sale with an agent agreed between the parties and the parties shall act on the advice of the nominated agent as to reserve price.
That upon settlement of sale of the Property A property and after discharge of the mortgage loan to Bendigo Bank and payment of commission and other associated sale costs, the net proceeds thereof shall be disbursed as follows:
(a)the sum of $8,000 to [X], the eldest child of the parties;
(b)the balance thereof to the respondent wife by way of payment to the respondent wife’s solicitor’s trust account.
That pursuant to s.78 Family Law Act 1975 (Cth) that each of the husband and the wife shall be and hereby are declared to be the sole and absolute owners at law and in equity of:
(a)all items of furniture, furnishings, personalty, chattels and jewellery;
(b)all monies (whether held in cash or in deposit with any financial institution);
(c)any motor vehicle;
(d)all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant;
in the possession, custody or control or each of in which either has an interest which are not otherwise dealt with in these orders.
That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to s.106A Family Law Act 1975 that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
IT IS NOTED that publication of this judgment under the pseudonym Scott & Scott is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 870 of 2014
| MR SCOTT |
Applicant
And
| MS SCOTT |
Respondent
REASONS FOR JUDGMENT
The husband was born in [country omitted] on [omitted] 1967. He is 48 years old. He migrated to Australia in 1991.
The wife was born on [omitted] 1973 in [country omitted] and she is 41 years old. The parties started their relationship in 1992. They married in [country omitted] on [omitted] 1993.
When reading the parties’ affidavits, it is apparent that there are many factual matters in dispute between the parties. The Court does not need to resolve all of those issues because the parties’ counsel agree that only the following issues need to be determined by the Court:
a)The husband seeks a 5% adjustment on contributions for his initial contribution of $26,000;
b)Apart from this initial contribution he says the parties’ contributions should be assessed as equal as they each worked hard in their respective spheres;
c)The husband says that overall the parties should receive an equal settlement as the wife should receive an adjustment of 5% of s.75(2) factors resulting in an equal division of property;
d)The wife seeks an additional adjustment due to her Kennon argument. Overall, the wife seeks an adjustment of between 65% and 80% for s.75(2) factors including the Kennon adjustment.
Initial contributions
The wife says that they both had some savings at the beginning of the marriage. The husband says that he had $26,000 in savings which he brought with him to [country omitted] and gave to the wife’s family.
The husband says that in addition to the $26,000, he was given Persian rugs as a gift from his father and he sold these rugs in 2007 for $18,500. He says he put that money towards the mortgage on the Property L property. He annexes a copy of the advertisement for sale of the rugs.
The parties lived in Sydney for the first 3 and a half years of their marriage before moving to Adelaide.
During the relationship, the husband worked as a [omitted].
The wife worked part-time running a [omitted] from home.
The husband was the primary income earner. The wife was the primary carer for the children.
Real estate
The husband purchased the property at Property S, in South Australia in 1997 or 1998 for $70,000. The husband says he paid the deposit of about $15,000 from savings and borrowed the rest by way of a mortgage to Bank SA. The property is tenanted and the rent is paid against the mortgage. The wife says the deposit was paid from both their savings.
The parties purchased a property in the wife’s name at Property L, in 2006 for $170,000.
The parties purchased a property at Property A, in 2011 for $315,000. The husband applied $94,000 in savings towards the purchase and borrowed the rest by way of mortgage. That property is held in joint names.
The husband says that during the marriage the wife would send money to her family in [country omitted].
The husband says that he made the greater contribution during the marriage “but is prepared to agree to an equal division”.
The wife says the husband buys and sells motor vehicles for profit. The husband says he has only done this with a couple of cars and not to the extent the wife alleges.
The wife says the husband earned a substantial amount of cash which he did not bank and believes he continues to do this.
The wife started her own business called [omitted]. That business is not currently registered. The wife says she cannot afford to re-register it at a cost of $10,000. She also says that the husband destroyed the material she had for it. She is currently studying to become a [omitted].
Children
The parties have three children [X] ([X]) born in 1994, aged 20, [Y] born in 1998, aged 17 and [Z], born in 2009, aged 6.
The husband says that he was actively involved in the children’s care. The wife says he was a disinterested father and did not have much to do with them. He says that the wife has turned the children against him and alienated them from him.
Property
There are some issues in dispute about what should be included in the pool but little time was spent on this. The disputed items are as follows:
a)
The wife says that her Toyota Corolla is worth $4,000 in her balance sheet, although in her financial statement sworn on
2 July 2015, she gives it a value of $2,500. In her February 2015 financial statement, she said it was worth $3,000. As the case outline is not evidence, I will take the value from the February 2015 affidavit. There is no explanation as to why the wife says it has dropped in value by $1,000 in 3 months. The husband says it is worth $8,000. There is no valuation evidence about this. The wife was not cross-examined about it. I will use the wife’s figure;
b) The wife says her Lexus is worth $8,000. The husband says it is worth $15,000. Again, the wife was not cross-examined about this and there is no valuation evidence. I will include the wife’s figure;
c) The wife says the husband has a pop-up caravan worth $1,000. The husband was cross-examined about this and says he sold it for $800 in 2012. I will not include this in the pool;
d) In his financial statement, the husband says his business is worth $2,000. In his case outline, he refers to having plant tools and equipment in the sum of $2,000. I assume this is the same thing. The wife gave a figure of $7,000 for the husband’s tools and equipment. He was not cross-examined about this. I will include the husband’s figure;
e) The husband says the wife has a wine collection worth $500. The wife does not include it in her financial statement. Again, inexplicably, on the balance sheet prepared by her lawyer, it has a value of $1,000 attributed to it. The wife said in cross-examination that she might have 30 bottles. I am not satisfied that it should be included in the balance sheet;
f) The parties have different figures for furniture and contents and no evidence as to value. I will order that each keeps what furniture is in their possession and will not include any figures in the balance sheet;
g) The husband claims in his case outline that the wife has $6,000 worth of jewellery. She was not cross-examined about this. I will not include this figure from the balance sheet;
h) The husband says the wife’s business supplies are worth $10,000. The wife gave evidence that when she attended the house, most of it was missing. The husband does not say how he arrived at this figure. The wife also gave evidence that she cannot afford the registration fees. I will not include it.
The parties’ legal and equitable interests are as follows:
Assets
Property S $230,000
Property L $240,000
Property A $305,000
Husband’s Toyota Hilux $11,500
Husband’s Audi $9,000
Proceeds of sale of husband’s Toyota RAV4 $6,500
Wife’s Toyota Corolla $3,000
Wife’s Lexus $8,000
2 trailers $3,800
Husband’s frequent flyer points $1,500
Husband’s tools and equipment $2,000
Wife’s Suncorp super $1,000
$821,300
Liabilities
Mortgage secured over Property A $91,000
Loan to [X] $8,000
$99,000
Superannuation
Wife’s Suncorp Super $1,000
Net Total $723,300
The husband made a strange error in his affidavit. He refers to his parents as being deceased and there being no prospect of him receiving an inheritance. He corrected this is the witness box saying his parents are alive. His explanation for this mistake was changed and one point he suggested that he did not know what ‘deceased’ means even though he says he went through his affidavit with his lawyer before signing it. He then said that part of the affidavit was “not my problem, my problem is the marriage”.
The husband denied all allegations of violence made against him by the wife and his oldest son. He says the wife would call the police for no reason. He denied he was ever charged although when faced with the documents annexed to the wife’s affidavits he said that someone bailed him out and he went to court. He said his oldest son is not telling the truth.
He then said that he worked for 20 years and she took care of the kids and that he did not know why he was here.
He conceded that he has not been paying child support and said that there is an arrangement to pay the arrears of child support of approximately $,3000 on the sale of property. The husband denied buying and selling cars. He said that maybe he sold one and that he is a [omitted] by trade. He has a [omitted] licence and also has a TAFE qualification in information technology. The husband says he instructed his accountant to provide whatever documents the wife’s lawyers asked for about the lease and for his accountant to make it clear that they did not possess most of the documents. They circled documents that he had to provide. The husband blamed his accountant or his lawyer for not providing documents. He then said he prepared a two page summary of his calculations for his accountant to prepare his tax. He says that he does not give people written quotes and invoices as he is mostly doing small jobs.
He said that the money he receives, he deposits into his bank account. It was put to him that he could keep some of the cash and not bank it, depending on how he was paid. He says he does everything for his family. He then said he is paid in cash and does not have any paperwork. His answers were contradictory and confused as he first said that whenever he received cash he put it in the bank but then said that he does keep cash sometimes.
The husband said that he uses computer invoices and does not print them out. He acknowledged he was aware that the wife’s lawyers had asked for discovery and that his desktop and laptop computers be made available for forensics examination but that he did not provide them. He said the invoices on the computers crashed it and said his lawyers had told him he had to provide them but he chose not to.
The husband says he saved $26,000 over the two year period that he was first in Australia. He says he paid for airfares and accommodation on top of that. He says he put the $26,000 in the [country omitted] bank account. This is a significant sum of money to take out of the country and is a significant amount to save in such a short period of time in addition to having sufficient money for the other expenses he said he paid for.
The husband says he recalls the wife asking him to allow her to go to [country omitted] with their eldest son when her mother was sick. He said he did not have the money for the fare. Wife’s counsel suggested that it was because he was controlling. He said that he was not but that he could not afford the $2,200 fare and could not borrow it. This seems incongruous against all the other money he says he saved and contributed to the properties over the years. The more likely explanation is that he did not want the wife to leave the country with their son.
He says he received rent of $300 per week cash from the Property L property and it went straight to the wife. He acknowledged that this was not in his affidavit. Aspects of the husband’s evidence were unsatisfactory. It appears that he has earned significant sums of cash over the years. It is not surprising that the wife thinks that the husband has not disclosed all of his income.
Family violence
The wife says the violence started when she first moved to Sydney and that she was isolated and spoke little English. Her mother died in [country omitted] in 1996. She says the husband refused to allow her to go to [country omitted] to see her before she died. It is clear that she is still upset about this.
The wife says they separated in 2004 for a period because of violence but the husband apologised and they reconciled. She says that when he was studying he would query her and say she was a bad mother.
She says in 2010 he physically assaulted her after he found receipts in her bag for three rings that she bought from cash converters. She says the husband became angry because she did not buy milk at the shop. She says he threw a booklet at her and that when she left for the police station, he followed her. She says that when she returned home the husband became increasingly angry and broke the door, grabbed her by the hair, dragged her from the hallway into the kitchen and hit her head against the fridge.
The husband says that towards the end of the marriage the wife took a wide range of prescription and non-prescription medications. He says the wife became angry.
The husband denies the wife’s allegations of family violence and says that whenever the police were called to their home, he was the victim and that no charges were laid against him. He says that the wife blames him for her losing her employment as a [omitted] but annexes a letter from her employer [omitted] which states that she had been absent from work without consent and without notification. This could be because of family violence rendering the wife unable to work.
The husband annexes a photo of himself and the wife on holidays in Sydney on 4 October 2013 and at the [omitted] Bowling Club on
11 October 2013 and says in his affidavit at paragraph 81.7 “these photographs do not depict a woman who has suffered continued violence and lived in the perpetual fear of her husband.” Photographs are merely a snapshot of a moment in time. They do not discount there being a volatile and violent relationship. I do not place any weight on the photographs one way or the other.
He refers to the Child Inclusive Memorandum prepared by a family consultant and says that the criticisms that [X] and [Y] make of him have been coloured by the wife’s negative influence.
The wife says that the husband was violent towards the children and that he would throw objects near them; beat them with belts and high-tech toys. He also called the children dumb and stupid and would say “you are just like your mother.” She says the father would turn on her when she intervened.
The wife says that there was verbal and physical abuse throughout their marriage. She says the husband hit her when she was crying after the death of her mother. She says the eldest son was 2 years and 6 months old at the time and was hiding under the table. She said she did not tell anyone about it. She said it was very shaming. She says that in 1998 she lost a tooth after he hit her lip. She said the dentist said to her “did he hit you?” and she said no because she felt shame. The wife acknowledged that she had a mental health plan and that she had been taking antidepressants but that they made her dizzy and so she stopped taking them. She said that she told her doctor about what was happening and that she felt that it was all her fault because that is what her husband had told her. She says that on one occasion the husband tried to poison her - she saw blue tablets then became very ill.
The wife says that the husband killed a dog of theirs. She said it is not the dog that he still has with him but a different dog called [name omitted]. She believes the husband took the dog because he told her the dog was dead. He did not tell her that he killed it.
The husband says the wife has a wine collection. The wife says that she was given wine as presents from friends in [country omitted]. She has maybe 30 bottles but she has not counted them. There is no evidence about the value of the wine collection.
She had to acknowledge that the husband had offered for the wife to collect her belongings. She said a lot of things were broken and gone. She does not believe that the husband sold the camper trailer in November 2012 for $800.
The wife says that over the years of their relationship they had several separations. In some instances they remained under the same roof and in other instances the husband moved out.
There is no doubt that the parties had a volatile relationship with multiple separations before the parties finally separated in November 2013.
It goes beyond this however. The wife and the parties’ eldest son gave evidence about the husband’s violence. The wife also relied on an affidavit of her treating general practitioner Dr P who was also cross-examined.
The husband’s counsel claims that there is no corroboration of the wife’s allegations about the husband’s violence apart from the eldest son witnessing one incident. That is not [X]’s evidence. Furthermore I do not accept that the medical notes from two medical clinics do not corroborate her evidence. It is also necessary to point out corroboration is not necessary in order for the court to make findings about family violence. Family violence tends to take place behind closed doors. Often there are not witnesses apart from those directly involved.
In this regard I refer to the Family Violence Best Practice Principles, Third Edition, October 2012, page 6:
Importantly, the FLA does not require independent verification of allegations of family violence (such as police or medical reports) for a court to be satisfied that it has occurred. As the Full Court of the Family Court said in Amador & Amador (2009) 43 Fam LR 268:
Where domestic violence occurs in a family it frequently occurs in circumstances where there are no witnesses other than the parties to the marriage, and possibly their children. We cannot accept that a court could never make a positive finding that such violence occurred without there being corroborative evidence from a third party or a document or an admission.
The victims of domestic violence do not have to complain to the authorities or subject themselves to medical examinations, which may provide corroborative evidence of some fact, to have their evidence of assault accepted.
Page 63 of the wife’s trial affidavit is a bail agreement dated 14 April 2011 about the father in relation to two charges of aggravated and two charges of property damage with respect to assaults against the wife on 5 December 2010 and damage to her car. This relates to the incident the wife described in her affidavit after she returned from shopping. The police records at page 68 are notes that the police officer observed: “bruising and scratch marks to the upper and forearms of the victim as well as a cut lip and the photographs were taken of her injuries.” The police further note that when the husband was interviewed he claimed that he was the victim of assault by her rather than the reverse. He admitted to damaging mirrors on her vehicle as he was upset. There is no indication that the officers observed any marks on the husband. The wife also annexes the police incident report from 26 November 2002 and from 2 May 2012.
The wife gave detailed evidence about the violence and was consistent in her affidavit, under cross-examination and in what she told police and her doctors. The husband denied the wife’s allegations and said he was the victim. His evidence was vague. I prefer the evidence of the wife on the issue.
Dr P
Dr P is the wife’s current general practitioner. She prepared an affidavit and was cross-examined. She says the wife first consulted her on 15 November 2013. She performed a physical exam on that day and measured bruises on the wife’s left hand, left arm and left shoulder and another bruise on her right. The wife also had a tender neck and restricted neck and shoulder movements. The wife told her that her husband assaulted her on 10 November and 12 November 2013. She noted subsequent visits in her affidavit and says that the wife consistently complained about pain in the neck and shoulder, numbness in the left side of her face and left side of her body, chest pains, difficulty sleeping and low moods. She annexed her medical records to her affidavit and also the medical records of the wife’s previous general practitioner Dr F. Dr P says that the wife continues to suffer from anxiety and depression and poor concentration and that this affects her ability to work. Further, she said that her injuries are consistent with post-traumatic stress disorder; anxiety and depression which she says are commonly associated in patients who have experienced domestic violence. She says that the wife has been receiving psychotherapy since 2010 and that this together with physiotherapy will need to continue. Her notes of 15 November 2013 are consistent with the evidence the wife has given. The wife next visited her on 20 November 2013, complaining of neck and shoulder pain and the general practitioner created a mental health care plan for her. The wife returned on 25 November still complaining of neck pain, chest pain and anxiety. The wife continued to see her general practitioner regularly over the next several months still complaining of anxiety and sleeplessness. She was seeing a psychologist at times and notes that she was unfit for work.
Dr F records the wife attending on 6 December 2010. She notes that the wife reported that the husband bashed her the day after she reported him to the police. She was crying in distress. She noted a 1 centimetre laceration to her lip and a bruise on her upper right arm. She was going to bring forward her appointment with her psychologist. The wife had a further appointment a few days later still complaining of pain. The wife attended the surgery on 2 February 2012 reporting that the husband had hit her on the head the night before. She had some bumps on her head and swelling slightly on her left hand.
Evidence of children
The wife’s counsel did not proceed with the application for [Y]’s affidavit to be admitted into evidence and for him to be subjected to cross-examination. It is important to discuss this issue. [Y] is 17 years old and therefore s.100B of the Family Law Act 1975 applies. The mother’s counsel wished to call him because he could give corroboration evidence as to the family violence. He said this would assist with respect to the Kennon argument. The argument against this is that he is not independent; he is estranged from his father and has taken his mother’s side. It is a rare case indeed that the Court permits a child to give evidence in proceedings and for very good reason. There could be no more invidious position for a child then to be in the court room with one’s parents and being cross-examined about their parents’ relationship and violence.
[Y]’s older brother is over 18 years old and is entitled to give evidence. It was somewhat concerning that the mother’s counsel asked if [Y] could be in the courtroom after the decision was made. Although [Y] will be an adult in a few months’ time he is still a child of this relationship and it would do him no good at all to be in the court hearing very personal things about his parents’ relationship. I raised this with [X] after he gave evidence. I told him that whilst he was entitled to be in the courtroom, that given the nature of the issues discussed, he may prefer to stay outside with his younger brother. He did so.
[X]
[X] is the parties’ oldest son. He is 20 years old. He swore an affidavit. He says that the father was always aggressive and violent towards the whole family. He says his parents’ relationship was turbulent and that they argued frequently. He says that his father would threaten to take the children away from the wife. He says he saw his father hit his mother on a number of occasions. He said in 2010 when he saw his father hit his mother, he pushed his father off her. He says in 2013 he was woken in the middle of the night by his mother crying. He went into his parents' bedroom and saw the father hitting her. He pulled his father off his mother and removed him from the room. He says after that the father kicked him out of the house.
[X] then referred to the incident on 13 November 2013. He says that the mother returned home to collect school clothes for his brother. The mother took [Z] to school and returned to the home where [X] and [Y] were about to leave. [X] took [Y] to school and returned about 15 minutes later. When he returned, the police were attending and he saw his mother in tears.
[X] was cross-examined. He was asked about the incident in November 2013. He said he had stayed over because he had an exam. He said he heard his father yelling at his mother and his mother saying that she only came over to grab some clothes. He said there was an incident in early 2013 when he saw his father push his mother against the wall and bang her chest. This took place in the dining room. He was in his room when he heard raised voices. When he came out he saw the mother against the wall and the father pushing against her, punching her in the chest and arms with a closed fist. He grabbed his father from behind, pulled him away and took him outside and told him to be calm.
He said that his father kicked him out of the home because he did not like his current girlfriend and was in trouble for going out on Wednesday night’s meeting for a group project. He said that this occurred maybe a week before his mother left.
He also said he saw his father take cash from the bedroom and that his father told him he used to buy and sell cars. He did not want any contact with his father.
Periods of Separation
The husband says the parties separated in 2010 for 4 or 5 months and the wife and children moved out of the former matrimonial home.
Events on 10 and 12 November 2013
The husband says that on 10 November 2013 the wife left the former matrimonial home and told him that she was separating from him. He says she returned on 11 November 2013 saying she wanted to talk but she became agitated and scratched his face causing it to bleed. He says the police attended the home and removed the wife. He said the police asked if he wanted her charged but he declined.
The wife says that in November 2013 they argued because the applicant took money she had saved from her drawer. When she queried him about it he became angry and threw a receipt book at her face and then punched her into a wall. She says he then threatened to kill her. She says she took two suitcases one for her and one for [Y]. She went to stay with a friend.
The wife says she returned to the home on 12 November 2013 to collect [Z]’s school uniform. She says she did not see the husband’s car and thought he was not at home. She says she went inside and looked for his school uniform and saw the applicant in their bedroom. She said she went into the kitchen and the applicant followed, swearing at her. She says he went very close to her face and continued to yell at her. She says she asked [X] to take [Y] to school. She then says that she took [Z] to school because he was scared of the father and went back to talk to the applicant about property. She says that as they were talking about property he became enraged and started hitting her, punching her shoulders and head and pulling her hair. She says she was on the floor and the husband was strangling her. She says he said “I’m going to kill you and no one will know”. She says she scratched the husband thinking that she would have his DNA under her fingernails if he did kill her. She says she went to the police and went to a refuge. She says when the children and she returned to the property it had been trashed.
The wife saw two different doctors within three days after this incident. She agreed that the police asked her to leave the home and she did so. She says she went to stay with a friend and her friend said she would take her to the doctor who was close to her friend’s home. She says when she left the home on 10 November 2013 that [X] was staying with friends because the husband kicked him out a few days before and [Y] was studying for exams. She took the youngest child with her and returned two days later to get his school uniform. It was suggested to her that given she was saying he was so angry he would not be in the right frame of mind to talk about property issues with him. She said screaming to him was normal and that she thought that once he got the anger out he would calm down. She admitted that he asked her to leave and she did not. She says that when she asked him for the Audi he hit her. She says that although it was in his name, he made her pay for it so it was her car. When he punched her she tried to run away from him and she was on the floor. He was choking her and she scratched him. She says she thought she was going to die. She says the old man living next door saw them but the husband told him to go inside.
Section 75(2) factors
The husband has a [omitted] license. He works as a handyman carrying out various repair and maintenance tasks and painting work. He says he no longer contracts for a company and so does not get big jobs. He says that he does not issue written quotes or invoices for small jobs. Although he has qualifications in computer science he does not prepare computer generated invoices. His evidence also is that he prepares a two page summary for his accountant. The accountant prepares his tax return from that and he signs it. The husband also says that he does not deposit all of his income which he earns as cash but keeps some depending on his expenses at the time. His evidence varies a bit in this regard as he later said that all his income went into his bank account
The husband says there has been a down turn in work and that he expects to earn a low income in future.
The husband says the wife can work as a [omitted] and was employed in this capacity from February to November 2013. He says that they have the same income earning capacity.
The wife says that the husband has hidden or destroyed most of her business equipment and it would cost about $10,000 to reopen her business and register, which she cannot afford.
She says she suffers from anxiety and stress because of the husband’s treatment of her and says she has significant medical expenses. She says she cannot work with [omitted] because of stress and anxiety and the pain she feels in her arm. She says she plans to return to part-time work once the proceedings are over. She says that [Z] has learning disabilities and will need additional support.
The two youngest children live with her full-time and [Y] is in year 12 this year. [X] lives with her part of the time and with his girlfriend. It is likely that the wife will continue to have the sole care of [Z]. [Z] is 9. The wife’s responsibilities to care for the two children under 18 is a relevant consideration in her favour.
The wife started casual employment as an [omitted] a few months before the final hearing. The wife says that she cannot continue her employment in [omitted] because of the intervention order in place.
The husband has arrears of child support of about $3,000.
She says she continues to have significant expenses because of her injuries including physiotherapist treatment.
I am not satisfied that the husband has accurately disclosed his income. It is likely that he earns cash that he does not declare and that he has done this for year. It is consistent with the amounts of cash he refers to contributing during the relationship. Due to the cash nature of his business it is unlikely that the wife will receive more than minimal child support. The husband did not comply with his obligations to make full and frank financial disclosure. I am not satisfied that the husband’s earning capacity is the same as the wife’s as I am not satisfied that his tax returns reflect his actual income.
All of these factors favour an adjustment being made in favour of the wife.
Submissions
The wife’s counsel submits that there should be an additional adjustment between 10 and 20% in the wife’s favour because of the family violence. He also referred to the husband’s non-disclosure and the unsatisfactory evidence about his income. The wife has ongoing health needs and has the care of [Z] who has a learning disability. She says her employment as a childcare worker was interrupted and that the house has been damaged and needs remedial work so that overall, the wife should receive between 65 and 80% of the property pool.
The husband’s counsel submits that there should be a 5% adjustment in the husband’s favour for his initial contributions of $26,000 plus the proceeds of sale of the Persian rugs. With respect to the Kennon argument she said the onus is on the wife and that she had not provided corroborating evidence and that what she told her doctors could not satisfy the onus referred to in Kennon. In the alternative, even if the Court finds that the wife has discharged the onus, she has failed to show the causal effect on her contributions and she has not shown how her contributions were made more arduous. She said that there should be an equal division of the overall pool, recognising a 5% adjustment for s.75(2) factors in wife’s favour.
Legal Principles and their application to this case
Part VIII of the Family Law Act1975 is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in ss.79(1); 79(2); 79(4); & 75(2) of the Act.
Pursuant to s.79(1) the Court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in s.4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to s.79(2) the Court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a Court is to make an order altering marital property interests.
Paragraphs (a), (b) and (c) categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the Court to take into account any order regarding the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the Court to consider a list of matters contained in s.75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs. Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until the High Court decision in Stanford & Stanford (2012) 247 CLR 108, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].
The High Court considered the operation of s.79 in the matter of Stanford. In this case, the majority stated at [35]-[36] that:
“It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:
1.Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.
2.Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
3.Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).
In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.
The High Court also pointed out that what is just and equitable is different in every case.
Stanford casts doubt on the correctness of adding back notional amounts to the pool for the purposes of property settlement. The Full Court confirmed this in Bevan & Bevan (2013) FLC 93-545. The Full Court said at paragraph [79]:
“We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2 (o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.”
Both parties seek property adjustment orders. Some of their property is in joint names. I am satisfied that it is just and equitable to make property orders, adjusting the parties’ legal and equitable interests.
In Pierce v Pierce (1998) FLC 92-844 at paragraph 28 the Full Court said:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.”
In Williams & Williams [2007] FamCA 313 the Full Court states at the paragraph 26:
“We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.”
Whilst I am satisfied that the husband made an initial contribution of some cash and early on in the marriage sold some rugs, the contribution was modest and took place many years ago. I do not find that a 5% adjustment is warranted. I will make a 2% adjustment.
The wife’s Kennon claims
The wife seeks an adjustment in her favour taking into account the family violence and relies on the Full Court decision of Kennon and Kennon (1997) FLC 92 – 757. The Full Court said:
“our view is that where there is a course of violent conduct by one party toward the other during the marriage which is demonstrated to have had a significant adverse impact on that parties contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties respective contributions within s79.”
I am satisfied that during the relationship the husband was violent towards the wife. However as the extract from Kennon makes clear more than this must be established. The wife did not lead evidence as to how the violence made her contributions significantly more arduous. The Court is not entitled to assume that the husband’s violence has made her contributions more arduous. The comments of the Full Court in the unreported decision of S & S [2003] FamCA 905 are also applicable here:
There is no doubt that domestic violence may be a relevant factor in assessing contribution. The difficulty as presented in this case and many others is that inadequate evidence makes a proper assessment by the trial Judge either very difficult or impossible.
…
An insufficiency of evidence in the present case leaves the Court with a limited ability to deal with allegations in the context of section 79 proceedings. As Kennon has established, it is necessary to provide evidence to establish:
• The incidence of domestic violence;
• The effect of domestic violence; and
• Evidence to enable the court to quantify the effect of that violence upon the parties’ capacity to "contribute" as defined by section 79(4).
We do not agree that the evidence in this case could properly have led to an adjustment pursuant to section 79. There was no suggestion by counsel of the wife that his Honour did not correctly summarise the evidence in relation to this topic. The particular deficiency apart from those referred to by the trial Judge is the complete absence of evidence as to how the husband’s conduct affected her ability to contribute.
In this case the wife’s evidence did not address the issue of how her contributions were made more arduous because of the husband’s violence. She gave very limited evidence about how the violence has impacted on her. I am unable to be satisfied that she lost her job and is unable to work as a child care worker because of it.
The evidence falls short of establishing that there should be an adjustment due to the factors set out in Kennon.
Conclusion
The contributions, apart from the initial and early financial contributions of the husband are equal. There are significant factors favouring an adjustment to the wife for s.75(2) factors. I find the wife is entitled to a 15% adjustment in her favour. This means that overall the wife is entitled to 63% of the property pool.
The husband will retain the following assets:
Toyota Hilux $11,500
Audi $9,000
Proceeds of sale of the RAV4 $6,500
Trailers $3,800
Frequent Flyer points $1,500
Tools and equipment $2,000
Property S, $230,000
$264,300
The wife will retain the following assets:
Toyota Corolla $3,000
Lexus $8,000
Suncorp Super $1,000
Property L, $240,000
$252,000
On a strictly mathematical approach the wife would need to make a payment to the husband of $3,321. That would require the wife to make cash payment which would mean selling the Property A property. The wife should be given the opportunity to keep the Property A property. She will need to refinance the mortgage and pay the loan to [X]. If she is unable to do that then the property will need to be sold.
I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Judge Harland
Associate:
Date: 3 September 2015
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