SENDAK & SENDAK

[2013] FCCA 431

FEDERAL CIRCUIT COURT OF AUSTRALIA

SENDAK & SENDAK [2013] FCCA 431

Catchwords:
FAMILY LAW – Property dispute – fifteen year relationship – husband working while wife qualifying as [occupation omitted] – both parties likely to be assisted by family – contributions equal – husband earning capacity lower than the wife – whether husband should receive only, or predominately, superannuation out of property pool – wife having primary care of two young children – eight per cent loading in favour of wife. 

Legislation:
Family Law Act 1958 (Cth), ss.75(2), 79(2)
Evidence Act 1995, s.140

Cases cited:
Stanford v Stanford [2012] HCA 52
Erdem v Ozsoy [2012] FMCAfam 1323 at [116]

Applicant: MR SENDAK

Respondent: MS SENDAK

File Number: MLC 8317 of 2012

Judgment of: Judge Burchardt

Hearing dates: 14, 15 & 16 May 2013

Date of Last Submission: 16 May 2013

Delivered at: Melbourne

Delivered on: 28 May 2013

REPRESENTATION

Counsel for the Applicant: Ms Weldon

Solicitors for the Applicant: Septimus Jones & Lee

Counsel for the Respondent: Mr Williams (Pro bono)

Solicitors for the Respondent: N/A

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

FEDERAL CIRCUIT COURT OF AUSTRALIA
AT MELBOURNE

MLC 8317 of 2012

MR SENDAK

Applicant

And

MS SENDAK

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. I should say by way of introduction that this matter has been attended by a measure of haste, because a notice of default that constitutes exhibit R2 has been issued by the bank, and in effect a decision is needed before June 2013.  In these circumstances, I am giving these Reasons for Judgment orally.  For reasons which will become apparent the parties will still have some work to do, and the reasons will be recorded as they are being transcribed as a matter of urgency - I am going to request 24 hour turn around – and provide a copy to the parties.  The formal published version of the decision will be subject to only the very limited revision of the removal of egregious errors which invariably occurs. 

2. This matter is a property dispute.  Parenting issues have been resolved by consent orders following evidence given by Dr W.  The children, [X], born [in] 2006, and [Y] born [in] 2010, live with the mother and spend time in the ultimate of four nights per fortnight with the father.  There is a regime whereby that time will expand out to that amount. 

3. I will detail some background facts which are not in dispute.  The husband was born [in] 1974, and the wife [in] 1977.  They met when they were both young.  The mother says she was 17 at the time.  They married [in] 1997 when the wife was not quite 20.  She went from school to university and undertook a five-year course to become a [occupation omitted]. The husband was in the process of completing his apprenticeship as a [omitted] when the parties first met. 

4. They lived rent-free, one way or another, as a result of the generosity of the wife’s parents for a period of approximately 2 and a half years, and saved money to buy their first home.  Accepting, as I do, that the wife had part-time work while a student it is clear, nonetheless, that the husband would have contributed more to the parties finances in the initial period, especially since the wife says that she paid her HECS debt out of her earnings.  Effectively, the husband’s earnings, more probably than not, enabled the wife to complete her studies and become a [omitted], although the wife also clearly contributed both through her earnings and their own free accommodation provided initially by her family.

5. It is clear beyond doubt that both the husband and the wife come from close-knit families who have provided, and will continue to provide, assistance to them.  Separation occurred on 4 May 2012.  Given that the children’s issues are now resolved the circumstances in which this took place are not now as relevant as they otherwise would be, but it is clear, on any view, that a horrific assault took place by the husband and numerous others on the wife and her partner Mr P on that occasion.

   
   

   Dr W found that the husband was still upset and blaming his wife for his subsequent trial and conviction, and I accept Dr W’s evidence. 

6. The wife lives in rented accommodation and the husband lives with his parents in what is plainly a large property worth some $2.5 million dollars.  The husband’s most recent financial statement, filed on 21 March 2013, says his income is $1500 per week;  in other words, $78,000 per annum.  The wife’s income is $100,000 per annum.  I note that in her affidavit, filed on 18 October 2012, her income was then $85,000 per annum. 

7. Both parties have very precise positions as to the outcome they seek from the Court, but it is not possible to evaluate those proposals without first going through the usual methodology, as modified by the High Court in Stanford v Stanford [2012] HCA 52. The first step is to address the considerations arising under s.79(2) of the Family Law Act1975 (“the Act”).  Is it appropriate to make an order altering the parties’ property interests having identified the parties’ existing legal and equitable interest in their property? 

8. It should be noted, however, that in most cases an order will be made for the reasons indicated by Federal Magistrate Walters, as his Honour then was, in Erdem v Ozsoy [2012] FMCAfam 1323 at [116]; I fully agree with his Honour’s remarks. Neither counsel submitted that an order altering the parties’ property interests should not be made and I agree.

9. This brings us to the pool.  There are some agreed aspects of the pool.  There is equity in a partly-completed property at [C], asserted as $209,000.  There is the husband’s property at [S], which I have been informed has an agreed value of $5,000. 

10. There is the husband’s Mitsubishi Triton motor vehicle, now agreed at $20,000, and the wife’s RAV4 motor vehicle, $1,000.  The husband has a Harley-Davidson, agreed at $15,000, and the most recent figures for superannuation are, respectively, $60,631, in respect of the wife, and $3,400 in respect of the husband.  There are agreed liabilities in as much as the wife’s tax at separation, there was a debt of $4,000, and the husband’s tax at separation, which I have rounded off at $9,000. 

11. There are, however, a number of disagreed matters.  I note it appears common cause that the entirety of the proceeds of the former matrimonial home have been distributed or applied to the benefit of the parties.  That matter is therefore no longer extant.  There is a property at [G].  In 2009, or early 2010, the husband and wife agreed to join a sort of partnership/joint-venture with the wife’s father, and other family members, to develop at first what was contemplated as over fifty, and later nineteen, units on this site. 

12. The property was bought for $1.3 million;  the three respective parties were to put in $600,000 of this with the husband and wife putting up $150,000.  The development was to be conducted through a company, [omitted] Proprietary Limited, and shares were allocated to the husband in it.  The husband and wife appear on their own account to have contributed approximately $80,000 towards paying interest on the $690,000 borrowed, but they never drew down on the $150,000 facility they obtained which was originally intended to be their contribution, and they never made any capital input as a result into the project.

13. In fact, the wife’s father put up all the $600,000, including $152,000 advanced to meet the husband and wife’s putative share.  I roundly reject the husband’s assertion that this was a gift.  It is quite clear, having heard the wife and her father give evidence, that these were funds to be contributed by the husband and wife.  I regret to say I find the husband’s explanation unbelievable. 

14. There has been dispute over whether there is a notional equity at a maximum of approximately $36,000 in any event available to the husband and wife in this [G] property. 

15. Having heard the wife’s father’s evidence, it is clear there is no equity in the property in any meaningful sense at the present time; his evidence was cogent and believable. The shares should be transferred to the wife’s father as he is the person who put up all the capital investment in the project, and should have the benefit of it. The $80,000 contributed by the parties - and I note that the wife’s affidavit said at one point that they contributed nothing at all, and that all payments were made by her father and her brother-in-law – that the $80,000 apparently contributed is effectively just a bad and most unfortunate joint-investment by the husband and wife. [G] has no value to the parties, and should in any event be excluded from the pool.

16. The next matter in dispute is the husband’s alleged 10 per cent ownership of his parent’s home in [P], with an agreed value of $250,000.  This matter can be dealt with shortly.  It is quite clear that the husband’s family registered him as 10 per cent owner of this property to enable him to get a loan to join the [G] project.  It is quite clear that there was no intention to gift him 10 per cent of the property.  It is quite true that the husband’s mother will let him use it as a resource;  she made this concession very candidly when she was cross-examined.  But this is clearly a future resource, not a present, realisable asset. 

17. The husband clearly owns his 10 per cent on trust for his parents, and while the property is a resource in the sense I have described available to the husband, it is not part of the pool. 

18. The next issue in dispute is the credit card debt at the time of separation.  The wife’s counsel says I should split the parties’ estimates of $20,000 and $30,000 to produce a total of $25,000.  I accept the submission made by counsel for the wife that the husband has not produced documents going to this matter even though requested. 

19. There is scarcely any compelling evidence as to what the figures were.  The wife’s oral evidence was that the range of in which the credit debt stood at the relevant time was between $27,000 and $33,000.  Her evidence on this point was given with a measure of conviction and I am prepared to accept a total of $27,000 in this regard. 

20. The next matter to be addressed is the wife’s jewellery and cash.  The wife says that she had an engagement ring worth $15,000, jewellery worth a further $15,000, and cash in the property at the time of separation amounting to $8,000.  It is put that all of this was abstracted by the husband.  There is no challenge, per se, to the value of the jewellery; the husband said that he did not, however, know how much cash there was at the time in the house.  I accept the wife’s figure. 

21. The husband says he knew nothing of the value of the wife’s jewellery.  I have to say that his answers about this issue were thoroughly unconvincing.  He has lived with this woman for many years and the state of ignorance he purported to evince was not, in my opinion, believable, nor was his answers given in a convincing fashion.  However, he also said, without challenge, that the wife has changed the locks.  The wife submitted that she had not been cross-examined about the issues of jewellery or cash, and that this, taken with the husband’s clearly still subsisting anger, should lead to a conclusion that he stole all of these items.  

22. Despite the force of the wife’s submissions, I cannot find that the husband took the jewellery and cash. It would require findings of theft and perjury. These are matters that give reason to the operation of s.140 of the Evidence Act 1995.  Of course, it is possible that the husband stole this jewellery and cash and lied about it, but the evidence is not clear enough to say that allegations are made out.  It is possible that this may have been done by third parties, and I note that the husband mentioned a cleaner without challenge.  It is also conceivable that somehow they have been just lost in the general turmoil of a separation.  They are not to be included, therefore, in the fashion that the wife seeks.

23. The next matter raised is the wife’s post-separation contributions.  It is clear that the wife contributed $17,500 to pay the mortgage post-separation.  The husband has not paid Child Support save for two terms worth of school fees.  His assertion that he had not done so because he had not been asked rang rather hollow.  There seem to be some contribution issues, but it is not clear if the wife seeks that the $17,500 be re-credited.  I will hear, if need be, further from the parties in this regard.

24. Turning to the issue of contributions, the parties were in a relationship from 1997 at the least to 2012;  a period of 15 years.  The two and a half years rent-free from the mother’s parents helped, but the husband was earning the major part of the income while the wife got qualified, albeit that I note that the husband did not work for some time in more recent years.  Both parties clearly contributed as best they were able to the finances of the relationship.  It is clear that the mother did most of the child-rearing although not much evidence was given about this, but the final outcome would reflect that conclusion – that is to say the final outcome as to children’s issues. 

25. Nobody has made any express submission that contributions should be assessed as other than equal, and taken overall, in my view, it is clear that both parties should be held to have contributed in equal proportion.  I should note that the asserted savings of the parties in the first two years of $80,000 seemed quite substantial given their financial position at the time, and I think that the rental was only a relatively small putative part of that in any event. 

26. So far as future needs are concerned the husband lives with his parents and pays no rent.  According to his Financial Statement his parents pay $200 per week for his board and food to his benefit.  The children will live predominately with the wife; the husband’s intention to pay Child Support must be open to some scepticism.  The husband’s health is good and he seems likely to have on-going employment of at least $78,000 per annum. He has not re-partnered. The wife is paid $100,000 per annum for four days work per week.  She is in good health, apart, perhaps, from the sequelae to the assault to which I have referred.  Her salary has increased from $85,000 when she filed her Financial Statement on 18 October 2012 and I find she is in secure long term employment. 

27. Although it is clear her salary will increase, and more probably than otherwise more than the husband, I accept she is not on the path to [occupation omitted].  Her evidence in this regard was given with conviction and accords with her need to care for the children for the foreseeable future.  She has re-partnered, however.  I found the wife’s evidence in this respect, in part, less compelling.  She has taken Mr P on holiday to Thailand with the children and, if I understand the matter, will be taking him again on a cruise in December.  She sees him several times per week.  She is more involved with Mr P than she admits and has been so for a year or more, but I accept that there is no decision on her part to remarry and the future is not sufficiently clear to give this matter any significant weight. 

28. The husband has assistance from his parents readily available.  He can borrow on his notional 10 per cent of the parents’ home and will clearly be assisted, in any event, as his mother candidly conceded.  The wife, in my view, will also be assisted by her family.  Her father was perfectly content to advance $152,000 effectively to her benefit in 2010.  While little has been said about the wife’s family and their resources, it is clear that they will also help too, although, as with the husband, evaluating the precise parameters of such assistance is difficult. 

29. The wife seeks a 10 per cent adjustment in respect of future needs and the husband says no more than five per cent.  The wife will make more money than the husband.  She has $60,000 in super and the husband $3,400.  This might be thought to be, in part, indicative.  But the wife has the children, and that is a major matter.  In all the circumstances, I think an adjustment of some 8 per cent in the wife’s favour is appropriate. 

30. That brings us to the final question as to whether such an adjustment and orders would be just and equitable.  I think 8 per cent is a just and equitable outcome in the all the circumstances of the case, but what needs to be considered is how this result should be achieved.  That brings me to the parties’ proposals.  The wife wants to keep Property [C] and she says, and I accept, that it will cost her about $100,000 to make it liveable. She wants to give the husband all of her superannuation and pay the husband cash to produce the relevant result. 

31. The husband, in effect, says sell up and split the property and equalise superannuation.  He says there should be no s.75(2) adjustment if he obtains only superannuation.  I think the superannuation should be divided in proportions of 58 per cent in favour of the wife and 42 per cent in favour of the husband.  Both will need superannuation even though it is some way off.  It is not appropriate to distort the outcome of this proceeding and it would not be a just and equitable result by giving the husband, in effect, only, or almost only, superannuation.  He has to restart his life too, and the wife will, in any event, earn more than he does.  If the wife can pay the husband out in the light of my decision and keep [C], so much the better.  If not, she will have to readdress her circumstances.  Sadly, this is all too common where parties separate. 

32. Both parties should clearly retain their chattels and tax debts and the husband retains the [S] property. The parties are to confer about $17,500 unquestionably paid by the wife and the credit card liability of $27,000. I would expect the parties, following consideration of these reasons, to produce draft minutes of orders.  If they are not able to agree, I will hear the matter further 

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date:  31 May 2013