Scrivens and Scrivens

[2016] FCCA 2681

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCRIVENS & SCRIVENS [2016] FCCA 2681

Catchwords:
FAMILY LAW – Property − whether money should be added back − whether any undisclosed asset.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79

Cases cited:
Pierce & Pierce [1998] FamCA 74

Applicant: MS SCRIVENS

Respondent: MR SCRIVENS

File Number: DGC 305 of 2014

Judgment of: Judge Phipps

Hearing dates: 13 & 14 July 2016

Date of Last Submission: 14 July 2016

Delivered at: Dandenong

Delivered on: 21 October 2016

REPRESENTATION

Counsel for the Applicant: Mr Howe

Solicitors for the Applicant: Warren Graham & Murphy Pty Ltd

Counsel for the Respondent: Ms Phelan

Solicitors for the Respondent: Julie Taylor

ORDERS

1. The parties do all acts and things and sign documents necessary so as to give effect to the sale of the property (Property T Volume (omitted) Folio (omitted)) for the best price reasonably obtained in the following manner:

   (a)List the property for sale by private treaty with such agent as the parties may agree to appoint, and in default of agreement of the agent within 14 days, such agent as the President of the Real Estate Institute of Victoria, or his or her nominee, shall appoint (“the Agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when they fall due;

   (b)The sale price at which the property be listed be mutually agreed upon by the parties or, in the absence of the agreement reached within 14 days of the date of this agreement, be the price nominated as the fair market value by a Valuer appointed by the President for the time being of the Victorian Division of the Australian Institute of Valuers and Land Administrators (Incorporated) (“the Valuer”), the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when they fall due;

   (c)The Valuer will, if requested by either the husband or the wife as at a date three calendar months after the date upon which the property is first listed pursuant to paragraph 2(a) of this agreement, and thereafter at three calendar month intervals until the property is sold, nominate a sale price other than the original nominated sale price;

   (d)The parties each co-operate in every way with the agent including (without limiting the generality of the foregoing):

   i.Making the key available to the agent;

   ii.Allowing inspection of the property at all reasonable times as requested by the agent;

   iii.Doing or saying nothing to hinder or prevent a sale being effected;

   iv.Signing all documents requested by the agent in relation to the listing of the sale of the property, except a contract or agreement for sale which has not been authorised by the party’s solicitors.

   (e)The parties each execute a Contract of Sale in the form prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties, or, in the absence of agreement, at or above the price nominated by the Valuer pursuant to paragraphs (b) and (c) of these orders;

   (f)The wife’s solicitor have the primary conduct of the sale on behalf of both parties, provided the husband’s solicitor be entitled to independently advise and represent the husband in respect of the sale and all related matters;

   (g)In the event the property is not sold by private treaty within three months:

   i.The parties will list the property for sale by public auction with the Agent appointed pursuant to order 1(a) hereof;

   ii.The reserve price for the purpose of such auction will be such as the parties agree upon within fourteen (14) days after the date upon which the property is first listed for sale in accordance with order 2(b) hereof or in the absence of agreement, a price determined by the Valuer appointed pursuant to order 1(b) hereof;

   iii.In the event the bidding at the auction does not reach the reserve price, the parties may negotiate with the highest bidders or any other interested person and effect a sale of the property at a price which is not more than 5% below the reserve price;

   (h)If the property remains unsold, the parties do all acts and sign all documents necessary to immediately relist the property for sale by public auction again, on a date nominated by the said Agent;

   (i)That pending the sale of the said property;

   i.The wife shall continue to occupy the property;

   ii.The wife shall pay rates, electricity and any other outgoings in respect to the real property of what so ever nature and kind.

   (j)That the proceeds of sale of the said property once sold be applied as follows:

   i.In payout of all costs, commissions and expenses of the sale;

   ii.Add $75,000 to the net proceeds and pay 70% of that total less $75,000 to the husband;

   iii.In payment of the balance to the wife.

2. That otherwise each party retain possession and ownership of all assets and chattels and superannuation currently registered in their respective names or in their respective possession.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 305 of 2014

MS SCRIVENS

Applicant

And

MR SCRIVENS

Respondent

REASONS FOR JUDGMENT

Introduction

1. The parties dispute the distribution of their property.  The issues are:

   a)Whether two amounts, $150,000 and $137,000 should be added back into the property pool;

   b)The parties contributions;

   c)The adjustments under s.75(2).

2. Both parties propose that the principal matrimonial asset, the former matrimonial home at Property T be sold.  The wife proposes that the parties’ assets be distributed half to each.  The husband proposes that the net proceeds of sale of the Property T property be distributed 70% to him and 30% to the wife and that otherwise each party keeps the assets in their possession.  On the husband’s side this includes $75,000 in the bank so that the overall effect of his proposal is that he would receive 80% of the assets and the wife 20%.

3. Apart from the dispute about the amounts to be added back the parties agree that the assets are:

Asset	Ownership	Value
Property T property	Wife	$400,000 (to be sold)
Bank account	Husband	$ 75,000
Total	$475,000

1. The wife has two small superannuation accounts.  According to the husband they are (omitted), $1,907 and (omitted) Super $5,849.  The wife names both together and gives a combined value of $8,000.  The husband has no superannuation.  Neither party proposes a splitting order.  The wife’s superannuation can be treated as a financial resource.

2. The wife’s financial statement of 4 July 2016 states that she has a personal loan from (omitted) bank of $52,500 a (omitted) Mastercard of $6,450, a (omitted) Visa Card of $10,609 and an (omitted) Visa Card of $7,600.  The husband’s most recent financial statement of 21 September 2015 says he has an (omitted) Credit Card owing $8,000.  These amounts are post separation debts.

3. Between 13 May 2013 and 28 May 2013 the wife withdrew seven instalments of $1,000 each from the husband’s (omitted) Credit Card account.  The wife acknowledges that she did so and says that she did this while the husband was in the (country omitted).  She says that at the applicable time she and her family were struggling.  The husband says that at that time the wife was working as were her three adult sons.  He says all outgoings in respect of the property were paid and she was not struggling.

4. The husband says that towards the end of 2014 the wife, without his permission, withdrew $4000 from his (omitted) Bank account, doing this in four lots of $1,000.  The wife denies that she did this.

5. The husband claims that both amounts, $7,000 and $4,000, should be added back into the property pool.  The amounts making up the $7,000 were drawn out prior to the date on which both say separation under the one roof occurred.  The wife says that she used them for the household’s living expenses.  The husband says they were not needed.  The wife was able to withdraw the amounts because she had the husband’s account number and PIN.  The evidence does not allow a finding of any extravagant spending by the wife of the $7,000.  There is no basis for adding it back into the property pool.

6. The husband asserts that the withdrawals of four $1,000 amounts making up the $4000 taken from his (omitted) Bank account were towards the end of 2014.  The husband acknowledges he has difficulty remembering events.  Without more evidence there can be no finding that the wife withdrew those amounts.

7. The husband is an aged pensioner.  He receives $870 a fortnight and otherwise lives on his savings.  The wife works in (occupation omitted) 42 hours a fortnight earning $730 a week.

8. There are two or three motor vehicles, an old horse float and a 40-year-old yacht.  The husband has been living on the yacht.  There are no professional valuations of any of these items.  The parties give some estimates, all low.  There is no evidence that any have a realisable value.  I will not include them as assets.

9. The husband was born on (omitted) 1942.  He is 74.  The wife was born on (omitted) 1966.  She is aged 50.  The parties commenced cohabitation on (omitted) 1996 and married on (omitted) 2005.  They separated on 1 October 2013.  At the commencement of the cohabitation the wife had no assets of significance.  She has three children born of a previous relationship in the (country omitted).  They came to live with the parties about (omitted) 1999.  They were then aged 12, 11 and 7.

10. At the commencement of cohabitation the husband was self-employed in partnership in a business under the registered business name of (business omitted) in (omitted).  He worked full time until he retired at age 60 in 2002.  During the relationship the wife had some casual employment and from 2009 until 2012 received a disability pension.  Since then she has worked about 42 hours a fortnight in (occupation omitted).  Largely the husband’s income and investments supported the parties and the wife’s three children while they lived with them.

11. At the commencement of the relationship the husband owned a property at Property S.  It was unencumbered.  The parties lived there for about two years.  The husband estimates its value at the time was approximately $250,000.  The husband had an interest in the partnership known as (business omitted).  He had no interest in freehold only the business.  He estimates the value of his interest at the commencement of cohabitation as approximately $150,000.  He had superannuation with (omitted) Super which had a share in a house in (omitted).

12. Approximately two years after cohabitation, the Property S property was sold for approximately $250,000 net.  That money was used to acquire the freehold of the property on which the former matrimonial home at Property T is constructed.  The property comprises two titles, one being 200 acres of land with the house and the other being 200 acres of bush.  The first title was acquired for $300,000 using proceeds of the sale of the Property S property and the other with funds the husband had saved.  At about the same time the superannuation fund purchased a factory in (omitted).

13. In about 2002 the husband sold his interest in (business omitted) in (omitted) for approximately $100,000.  The money was used for the purchase of 200 acres of bush adjoining the Property T property.

14. Following the husband’s retirement, the 200 acre bush block adjacent to the property on which the home was constructed was sold for approximately $240,000.  The husband says that was paid into an account in his name and was used to support the family including the wife’s three sons.

15. The husband says that when he retired his interest in (omitted) Super was about $300,000.  He says that as a result of the Global Financial Crisis the value of that fund halved.  He says the factory in (omitted) was sold by the fund for $60,000.  He says he recalls he drew down this amount from the fund and it was used to support the family.

16. The husband says he had intended to retire to (occupation omitted).  There were seven years of drought and he could not afford to (occupation omitted) and there was no return.  He subdivided off 180 acres of the land at Property T leaving approximately 20 acres on which the house is constructed.  He says that to the best of his recollection that piece of land was sold for approximately $195,000.  This money was used in part to buy a shack at (omitted) for approximately $140,000 and the balance was used for living expenses.

17. The husband says he transferred his superannuation in (omitted) to a  (omitted) Account purchasing the annuity for $150,000 on 7 June 2010.  Whether that is exactly the way the purchase happened is not clear as appears later.  That amount of $150,000 paid an annuity of $800 per month.  The husband subsequently cashed in the (omitted) annuity account for $137,000 suffering, he says, a penalty of about $10,000 in doing so.

18. Both parties regularly travelled to the (country omitted).  Occasionally the wife took her three sons with her.  Money was sent to the wife’s family in the (country omitted).

19. The wife’s claim that there should be amounts of $137,000 and $150,000 added back arises in this way.  On 25 March 2010 the husband had an amount of $336,033 in his (omitted) Bank account.  On 20 April 2010 a payment of $24,666 from (omitted) was paid into that account.  The husband acknowledges that this is all correct.  On 7 June 2010 two amounts of $150,000 were withdrawn from the (omitted) Bank Account.  The (omitted) Annuity was purchased on 7 June 2010 so that one of the withdrawals went for this purpose.

20. The wife says that she believes that at this time the husband had investments with (omitted) Superannuation in an amount of at least $150,000.  She refers to “Centrelink correspondence” attached to materials from (omitted), the organisation through which the husband purchased the (omitted) Annuity.  The Centrelink document is not dated.  The husband says that his recollection is that years prior he had investments with (omitted) Superannuation.  He says he has no memory when they were cashed in.

21. On 13 December 2011 nine amounts totalling, in round figures, $147,500 were paid into the husband’s (omitted) Bank account.  They are recorded as “from (omitted) withdrawal”.

22. On 24 August 2011 the husband received a payment into his (omitted) Bank account of $134,624.  On 20 December 2011 the husband withdrew $140,000 from his (omitted) Bank account.  Documents from (omitted) show account details setting out a contract date of 20 December 2011.  This shows a list of various managed investments and cash totalling $136,734.01.  The investment is known as “(omitted)”.

23. The husband agrees that the documents show he withdrew $140,000 from his (omitted) Bank account on 21 December 2011 and he agrees that the (omitted) material shows a contract with (omitted) dated 20 December 2011.  He says he has no recollection of the matters referred to or having withdrawn the account balance of $136,737.

24. The husband says he believes that his recollection is that the amount of $140,000 withdrawn on 21 December 2011 was used for the acquisition of a car, to pay credit card debt and living expenses.

25. The husband both in his affidavit and in his oral evidence says that he has been under significant stress by reason of what he describes as physically and economically abusive situations in his home and that large sums of money have been expended.  He says all that he can surmise is that the money was there and has been expended on lifestyle and living expenses.  He says that approximately $30,000 in cash was removed from his bedroom.  In his oral evidence he said he had that money to purchase a car.

26. The husband also says he believes that his wife sent substantial amounts of money to her family in the (country omitted).  There is evidence of the wife withdrawing amounts of money at or in the vicinity of gambling venues.

27. The husband says that his (omitted) Investment of $150,000 was withdrawn and that he has approximately $75,000 left.

28. The various investments described as the (omitted) Investment, the (omitted) Investments and the (omitted) Investment may all be one.  All were done through the one financial adviser, (omitted).  One of the withdrawals of $150,000 on 7 June 2010 is acknowledged by both parties as having gone into the (omitted) Investment.  The husband says his recollection is that the amount of $140,000 which he received on 21 December 2011 from (omitted) Bank he used for the acquisition of the car, to pay credit card debt and living expenses.  The source of the $140,000 may have originally been the other withdrawal of $150,000 on 7 June 2010.  If all this as correct the transactions are explained.  The amount of $75,000 still held by the husband is what is left from one of the $150,000 withdrawals.  The other withdrawal has been spent.

29. The husband says that he believes that in early 2010 the most he had was the $336,000 in the (omitted) Bank.  He believes that there has been a doubling in the wife’s analysis.  He believes that the amounts referred to in the (omitted) Bank account and the (omitted) subpoenaed material derived from this amount.  He does not offer the possible analysis I have set out above.  The analysis does show that what the husband says is possible.

30. The husband says that he is unwell and his memory is poor.  He now lives on the yacht on the (omitted) except when he has stayed in friends’ houses to mind their animals while they were away.  He cooks on a spirit stove in the boat and says that while it is satisfactory living there during summer months there is no heating in winter.

31. The husband was cross examined on the basis that the amounts of money available could not have been spent on the parties living expenses.  The husband’s position is that all he had in early 2010 was the $336,000 in the (omitted) Bank.  Both parties travelled to the (country omitted) and the wife’s children did on some occasions.  The husband accepts that money was sent to the wife’s family in the (country omitted) and he had no objection.  He asserts that more than he knew about may have been sent.

32. Taking all this into account I cannot find on the balance of probabilities that there are the two amounts of $150,000 and $137,000 which are unexplained and should be added back into the property pool or treated as undisclosed assets.  I consider there is a reasonable hypothesis that the husband’s total cash assets in early 2010 were about $336,000 and that except for $75,000 that money has been spent.

33. The steps in determining a property application under s.79 of the Family Law Act 1975 (Cth) are to determine the parties’ assets and liabilities, whether it is just and equitable to make an order, then determine the parties contributions and then whether any adjustments should be made for the matters set out in s.75(2).

34. The parties’ assets are the house and the husband’s bank account of $75,000.  The parties agree the value of the house is about $400,000.  The house will be sold which will determine its value.  The parties’ relationship has come to an end; the basis upon which they shared their finances is over.  Both apply for an order.  It is just and equitable to make an order.

35. The husband’s assets at the commencement of the relationship were the house in Property S valued at about $250,000, his interest in (business omitted) which he sold for $100,000 in 2002 and his (omitted) superannuation which he valued at $300,000 at the time of his retirement but which then halved at the time of the Global Financial Crisis.  The value of his assets at the commencement of the relationship was $500,000 to $600,000.

1. The party’s relationship was from (omitted) 1996 until October 2013, about 17 years.  The husband worked until his retirement in 2002 and then the party’s income was social security payments, including a disability payment to the wife from 2009 to 2012.  The wife commenced work as a (occupation omitted) in 2012.  From her evidence it appears that she has worked about 42 hours a fortnight.  Following separation the wife has remained living in the property in Property T.  After the husband retired the parties income was not enough to pay their expenses and the husband’s savings were used.

2. The wife’s three children lived with the parties supported by the husband.  The wife did not work until 2012.  For a time that was because of a heart condition.  Otherwise she carried on the task of homemaker and she cared for her children.

3. In Pierce & Pierce [1998] FamCA 74 the Full Court said at [28 – 29]:

   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 the present case that use was a substantial contribution to the purchase price of the matrimonial home: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J. at page 10).

   29. In the instant case, his Honour identified what he described as the greater initial financial contribution of the husband and his post separation contribution, but, in our view, he failed to properly assess such contributions. The period of cohabitation was ten years. At about the date of the marriage the husband had very significant assets. His Honour found that the husband had assets to the approximate value of $226,000. At the date of the trial, the parties had assets of a net value of $319,190 which included the matrimonial home valued at $260,000 to which the husband had contributed about $200,000 from moneys to which the wife had made no contribution.

4. The Full Court concluded that the trial judge’s discretion had miscarried in assessing contributions at 55% by the husband and 45% by the wife.  The Full Court considered that proper distribution to be 70% by the husband and 30% by the wife.

5. In this case the husband made all the initial financial contribution.  All the assets, the property at Property T and the $75,000 bank account come from his initial contribution.  He made by far the greater financial contribution which includes the use of his savings for both party’s expenses and the wife’s children’s expenses.  The children are not children of the marriage and so the wife’s care for those children cannot be taken into account as a contribution.  Nonetheless, she acted as homemaker and did not work until 2012.  From 2009 she did not have the ability to work.  Prior to that the wife not working was a joint decision made by the parties.

6. The exercise of assessing contributions is not a mathematical one.  In Pierce & Pierce the court assessed contributions as 70/30 after 10 years and the husband’s initial contribution was a significant factor in this.  It is not a matter of doing a mathematical adjustment taking the Full Court’s 70/30 assessment after 10 years as a base.  All factors, including the 17 years of the relationship, must be taken into account.  Nonetheless, taking the husband’s initial contribution together with his substantially greater contribution during the marriage together with the wife’s role as a homemaker but not as child carer, the proper assessment of contributions is 70% by the husband 30% by the wife.

7. The relevant adjustment factors under s.75(2) are the age and state of health of the parties and their ability to earn income. The wife has a small amount of superannuation as a financial resource but otherwise none of the other factors are relevant to determining whether there should be any adjustment.

8. The husband is dependent upon the age pension and what is left of his savings. The wife has the ability to work earning about $1,400 a fortnight. The wife is 50 and while capable of working in (occupation omitted) 42 hours a fortnight now may not be able to into the future. While the age pension is a modest amount the husband does have it as a reliable income. If the wife is unable, for whatever reason, to continue with her employment she will depend on disability benefits if she is eligible otherwise on unemployment benefits. Overall there should be no adjustment for matters under s.75(2).

9. The just and equitable way of putting this into effect is for the husband to retain the $75,000 in a bank account and to order the sale of the house and that the net proceeds be divided 70% to the husband and 30% to the wife after taking into account that the husband has already received $75,000.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Phipps

Date: 21 October 2016