Simoi and Sargent
[2009] FMCAfam 800
•29 January 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SIMOI & SARGENT | [2009] FMCAfam 800 |
| FAMILY LAW – Property – contribution – just and equitable. |
| Family Law Act 1975 ss.75(2), 79 |
| Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Norbis v Norbis (1986) 161 CLR 513 Pierce v Pierce (1998) FLC 92-844 Williams & Williams [2007] FamCA 313 |
| Applicant: | MR SIMOI |
| Respondent: | MS SARGENT |
| File Number: | WOC898 of 2007 |
| Judgment of: | Altobelli FM |
| Hearing date: | 4 December 2008 |
| Date of Last Submission: | 4 December 2008 |
| Delivered at: | Sydney |
| Delivered on: | 29 January 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Harper |
| Solicitors for the Applicant: | Kells The Lawyers |
| Counsel for the Respondent: | Mr Moss |
| Solicitors for the Respondent: | Kerrisons The Law Firm |
ORDERS
(a)That, within 42 days of the date of these Orders, the husband shall transfer to the wife all his right title and interest to and in the property known as Property Q, being the whole of land together with improvements erected thereon comprised in Certificate of Title Folio Identifier [1] ("the Property Q property") currently registered in joint names.
(b)That, at the time of the transfer mentioned in Order 1(a) above, the wife shall:-
(i)Discharge the mortgage loan with St George Bank Limited currently secured over the Property Q property.
(ii)Pay to the husband the amount of $121,864.00.
(c)That in order to facilitate and give effect to Order 1(a):-
(i)Within 14 days of the date of these Orders, the wife shall deliver to the husband a Transfer document in registrable form, for execution by the husband.
(ii)The wife and shall pay the legal costs and expenses associated with the transfer of the title into her name.
(d)That, up until the time of the transfer mentioned in Order 1(a), the wife shall be responsible for:-
(i)The payment of all outgoings, including council rates, water rates and insurance premiums.
(ii)The payment of all telephone, electricity and gas accounts (if any).
(e)That, in the event that the wife fails to pay the amount mentioned in Order 1(b) within the time stipulated for payment, then interest shall be payable on the amount outstanding or on the balance thereof as maybe owing at the rate prescribed under the Family Law Act from the date stipulated for payment to the date of final payment PROVIDED THAT the husband shall not be entitled to claim interest unless he is ready willing and able to perform his obligations under these Orders.
(f)That in the event that the wife fails to pay the amount mentioned in Order 1(b) (and Order 1(e), if applicable) within 3 months from the date of these Orders, the parties shall do all acts and things and sign all necessary documents so as to forthwith list the Property Q property for sale by private treaty with such agents as the parties agree to appoint, but in default of agreement as to agent, with such agent as the President for the time being of the Real Estate Institute of New South Wales or his nominee appoints following the request of either party to him to make such an appointment.
(g)That in the event that the Property Q property remains unsold for a period of 6 months from the date of making of these Orders, the parties do list it for sale by public auction should either party so require this to be done by notice in writing to the other party, and with such auctioneer as the parties agree to appoint, or in default of agreement with such auctioneer as the President for the time being of the Real Estate Institute of New South Wales or his nominee appoints following the request by either party to him to make such an appointment.
(h)That the reserve price for the purpose of such auction be such as the parties agree, or failing agreement, at an amount nominated as the fair market value thereof by the President for the time being of the Australian Property Institute New South Wales Division or his nominee at the request of either party PROVIDED HOWEVER in the event that the bidding at the said auction does not reach the reserve price then the parties shall attempt to negotiate with the highest bidders or any other interested person and effect a sale at a sale price which is not more than 2.5% below the reserve price.
(i)That in the event that the Property Q property remains unsold following the auction referred to in Order 1(g) above for a period of 9 months from the date of making of these Orders, the parties do list it by public auction a second time should either party so require this to be done by notice in writing to the other party.
(j)That the parties shall each co-operate in every way with the Agents including (without limiting the generality foregoing):-
(i)making the key available to the Agents;
(ii)allowing inspection of the Property Q property at all reasonable times requested by the Agents;
(iii)doing or saying nothing to hinder or prevent a sale being effected;
(iv)ensuring that the Property Q property is in a neat and clean condition at the time of inspection by the Agents and prospective purchasers; and
(v)signing all documents reasonably requested by the Agents in relation to the listing for sale of the Property Q property except a Contract for Sale which has not been authorised by the Solicitors for the parties.
(k)That the Solicitors for the wife have primary conduct of the sale on behalf of the parties PROVIDED THAT the solicitors for the husband retained in relation to the family law proceedings shall be entitled to independently advise the husband, and the legal fees of each solicitor in relation to the sale shall form part of the “conveyancing fees in relation to the sale” for the purposes of Order 1(l)(ii).
(l)That upon completion of the said sale of the Property Q property the parties do all acts and things and sign all necessary documents, instruments, writing and authorities so as to cause the proceeds thereof be paid out in the following manner and priority, namely:-
(i)Payment or reimbursement of agent’s commission and auctioneer’s expenses, if any, in relation to the sale.
(ii)Payment of conveyancing fees in relation to the sale.
(iii)To the husband, the amount of $121,864.00 plus interest pursuant to Order 1(e).
(iv)To the wife, the remainder.
(m)That, at the time of completion of the said sale of the Property Q property, the wife shall discharge the mortgage loan with St. George Bank Limited.
(a)That, at the time of the transfer of the Property Q property referred to in Order 1(a), the husband shall transfer to the wife all his right title and interest to and in the property known as Property P, being the whole of land together with improvements erected thereon comprised in Certificate of Title Folio Identifier [7] ("the Property P property") currently registered in joint names.
(b)That in order to facilitate and give effect to Order 2(a):-
(i)Within 14 days of the date of these Orders, the wife shall deliver to the husband a Transfer document in registrable form, for execution by the husband.
(ii)The wife shall pay the legal costs and expenses associated with the transfer of the title into her sole name.
That unless otherwise specified in these Orders, each party shall be declared to be the sole and beneficial owner, to the exclusion of the other party, of all other property and chattels of whatsoever nature and kind in his or her possession as at the date of these Orders and for this purpose:-
(a)Items of furniture and other household contents are deemed to be in the possession of the person having those particular items at the date of these Orders.
(b)Accounts with banks or other financial institutions are deemed to be in the possession of the person whose name appears on the records of the bank or financial institution.
(c)Motor vehicles are deemed to in the possession of the person whose name appears on the registration papers thereof.
(d)Shares are deemed to be in the possession of the party whose name appears on the respective share certificates or otherwise appears in the company records to which the shares relate.
(e)Insurance policies are deemed to be in the possession of the person whose life is insured or the party whose property is insured thereby.
(f)Superannuation benefits are deemed to be in the possession of the person who is named as the member of any such superannuation fund.
That unless otherwise specified in these Orders:-
(a)Each party be declared to be solely responsible for payment of any liability encumbering any item of property to which that party is entitled pursuant to these Orders, and shall indemnify and keep indemnified the other party in this respect.
(b)Each party be declared to be solely responsible for payment of any liability incurred in his or her name, and shall indemnify and keep indemnified the other party in this respect.
That in the event that either party refuses or neglects to execute any deed or instrument required or contemplated by the time stipulated in these Orders, and that failure continues for a further period of 14 days, then the following provisions shall apply:-
(a)The Registrar or Deputy Registrar of the Court is hereby appointed to execute all such deeds and instruments in the name of the defaulting party, and do all acts and things necessary to give validity and operation to such deeds and instruments, pursuant to section 106A of the Family Law Act.
(b)The party in default is ordered to pay any and all foreseeable damages to the party not in default caused by his or her default.
(c)The party in default is ordered to pay all reasonable legal costs incurred by the party not in default for the purpose of enforcing this Order and proving his or her damages.
IT IS NOTED that publication of this judgment under the pseudonym Simoi & Sargent is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
WOC898of 2007
| MR SIMOI |
Applicant
And
| MS SARGENT |
Respondent
REASONS FOR JUDGMENT
(Ex tempore)
Introduction and background
This is an application for property settlement that raises discreet issues for determination. The background facts are relatively uncontentious and are drawn from the chronologies that were prepared by Counsel for both the husband and the wife. The wife is 36 years old, the husband 33 years old. In about 1996 the wife commenced business trading as [D]. In early 2000 the husband and wife commenced a relationship. There is little dispute about the fact that in March 2000 the wife purchased a property at Property M for $227,000 plus acquisition costs. This was funded by a loan from RAMS and a loan from her parents. A little later on that year the husband rented the property from the wife and paid the mortgage for her. At the time the mortgage payments were $1058 per month. In December 2000 the parties commenced living in a de facto relationship.
In that month, that is December 2000, the wife received a lump sum payment of $92,610 by way of property settlement from her former husband. After legal fees of $3810 the wife received approximately $88,000 and these are facts that are now conceded by both parties after the hearing of the evidence. Both the husband and the wife then participated in undertaking fairly significant renovations to the property at Property M.
In May 2001 the husband concedes that the wife's Ford Falcon station wagon which she held at the time of cohabitation was sold for about $12,250. In May 2001 there is documentary evidence that sums of money were used to reduce the RAMS mortgage. Firstly there was $40,000, then $30,000 was paid to the wife's parents and then there was a further cash payment of $12,000. The husband did not challenge the evidence and in fact conceded the payments of $40,000 and $30,000 respectively and it is conceded that these payments were payment in full, that is satisfaction of a loan, of $126,000 from the wife's parents which it will be recalled was used by her to purchase the property at Property M.
When that property, that is the Property M property was sold in January 2002 for $276,000 the RAMS loan was repaid and that balance was just under $77,000 and the net proceeds were received, about $188,000, an amount by the way which is not challenged by the husband, $181,807 was used for the purchase of property at Property Q for $276,000. The parties borrowed the balance of about $120,000 and it is important to note at this stage that by the time the property at Property Q was purchased the husband has made no financial contribution towards the purchase price other than the joint loan of $120,000.
In June 2002 the husband purchased a property at Property R, using the loan from RAMS. The property was extensively renovated. In October 2002 the parties married. In 2003 the husband purchased a Honda motorbike financed by a loan from St George, the bike was later sold and he keeps paying the loan and I have not included that asset or that liability on the joint balance sheet for that reason.
In December 2003 Property R was sold for $380,000 to the wife's parents. The wife says that the sale price was $300,000, so I just note that the husband asserts it was $380,000, the wife says it was $300,000. I suspect from the evidence that the husband was asserting that $380,000 is what the property was worth but there was actually no evidence before me to that effect, even though the wife concedes that her parents got a good deal on this property. The wife says the sale price was $300,000 and I accept this on the basis of the documents that she produced to verify this. So when that property was sold the RAMS loan was discharged and the mortgage on the former matrimonial home was reduced by a further $70,000 and I am satisfied that the documents establish this.
In November and December 2003 the wife alleges that she received a number of payments from her parents by way of gift. A payment of $14,000, $20,000, $5000 and then $11,212. The wife was not challenged in cross-examination about this so therefore I accept that the money was received and used for the stated purpose, that is reducing the RAMS loan over the Property Q property.
In January 2004 the parties purchased the factory at Property P for $297,500 using a loan of $360,000 from ANZ and in the course of this discharged the existing loan to RAMS. The wife asserts that the actual draw down on the loan was slightly more but nothing turns on this. The parties borrowed a further $30,000 from the husband's sister and there is a slight dispute about when but nothing that turns on this.
In April 2004 the wife commenced trading in the new property and changed the business name to [D] and Interiors. There were a number of subsequent transactions including the sale of the Mazda motor vehicle, the husband cashing in his long service leave to pay capital gains tax, the refinancing of a loan, the parties refinanced to ANZ and borrowed approximately $392,000, thus taking over the existing loan of 360,000 and 30,000 repaid the husband's sister. On 18 June 2006 the parties actually separated.
The applicant husband says that the property settlement should be in general terms, an equal 50/50 division. The respondent wife says that the property settlement should be in general terms a 70/30 split in her favour.
Issues
The material before me gives rise to the following issues. How should contribution be assessed at the date of cohabitation and how should contribution be assessed at the date of separation and trial? There was no serious claim for s.75(2) adjustments except in the very broad sense by the husband who says he made a contribution to the upbringing of the wife's daughter from a previous marriage, [X], and then other than the contribution issues I need to decide what is a just and equitable order to make.
Applicable law
The applicable law in these matters is set out in the following cases. Firstly, the Full Court in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 states that property settlements involve four inter-related steps of identifying and valuing the property liabilities and financial resources, secondly identifying and assessing contributions, thirdly identifying the ss.79(4) and 75(2) adjustments and then considering the effect of the above and determining what is a just and equitable order.
One of the legal issues that arises is whether I adopt a global or asset by asset approach to contribution and the High Court's decision in Norbis v Norbis (1986) 161 CLR 513 makes it clear that either approach is available to me in whole or in part and my discretion should be exercised having regard to the facts.
In a case such as the present one where I need to weigh and assess initial contributions and contributions made during the course of the marriage, the Full Court's decision in Pierce v Pierce (1998) FLC 92-844, discussed in a later Full Court decision of Williams & Williams [2007] FamCA 313, provides guidance and in particular the later decision of Williams & Williams, a 2007 decision of the Full Court states in effect that I must not only identify the contributions of each party but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
Contribution at cohabitation
Let me deal firstly then with contribution and cohabitation. The husband conceded in evidence that at cohabitation the wife had the following. Firstly, her Ford Falcon station wagon sold for $12,500. Secondly her business. Now in relation to the business the value is unknown and as there is no evidence I must treat it as a nil value and I note that the onus of proof to establish the value was always on the wife. However, she also had the proceeds of a property settlement established at $88,000 and it was conceded in closing submissions that she had the equity in the property at Property M, of about $96,785, so in total the husband conceded in the proceedings that at cohabitation or thereabouts the wife had assets totalling $192,285.
Turning to the husband's assets at cohabitation the wife conceded in evidence that at cohabitation he had firstly savings totally $20,000 consisting of money in the bank which was established by documents and then repayment of some joint venture funds held by his sister. Secondly, he had a superannuation entitlement of about $9079 and then thirdly that his motor vehicle which was later sold for $13,000. In other words the wife conceded in evidence that at cohabitation the husband had assets of $42,079.
I therefore make findings in these terms. At cohabitation the total assets of the parties amounted to $239,364. The husband contributed about
18 per cent of that and the wife contributed about 82 per cent of that.
Asset pool
The next question I need to determine is what is the current asset pool. Now there are only two contentious issues as between the parties. The first issue is whether the wife's ANZ visa card should come onto the balance sheet as a joint liability. I heard the wife's evidence in relation to the use of this and as a result of that I accept that it is a joint liability. The second issue is whether the husband's loan of $9000 from his parents should come onto the balance sheet as a joint liability. The husband's evidence is that the loan was used to re-accommodate himself after separation, however his Counsel could cite no authority to establish why the liability should become a joint liability. At best the argument is that if he had used joint funds to re-accommodate himself he could resist a claim for add back, but here the situation is different. He was earning money and there is no evidence to indicate why he could not self support. Accordingly his claim in this regard is disallowed. The pool of assets I find to be as follows. Firstly, there is Property Q agreed $370,000. Nextly, there is Property P agreed $390,000. Then there is the wife's business agreed $64,440, that's a total of $824,440. Then there are liabilities. There is the St George Bank loan agreed $387,266 and then the ANZ visa that I find to be a joint liability $4700, total liabilities $391,966. That means there is a net property pool of $432,474.
The superannuation pool consists of the husband's super of $49,000 and the wife's super of $6711, so that is a total of $55,711. I note in these proceedings no super split is proposed and the total combined pool of assets, the combined net pool of assets, is $488,185.
Contribution at separation and hearing
I turn now to consider contribution as at the date of separation. Both the husband and the wife worked hard in their respective capacities and both worked to conserve and improve the assets they had during cohabitation and marriage. There is nothing to distinguish their respective contributions up until the date of separation except the further financial contribution made by the wife by her parents between 10 November 2003 and 11 December 2003 that I referred to above and which total $53,000, all of which was used to reduce their liability to RAMS. This is almost 10 per cent of the combined net asset pool and it is too large and too recent to ignore.
I note here that I have specifically rejected the husband's submission that just because he earned more money than the wife that this ipso facto means that he has a greater contribution. I do not accept that submission. In this case there were myriad contributions by the husband and the wife working both ways in the context of the partnership of marriage.
I turn now to the issue of contribution at the date of the hearing. The husband says he made approximately six months of mortgage payments after the date of separation even though he did not have the benefit of possession of any of the properties. He says he further contributed via allowing the wife to occupy the factory property at a significantly less than market rental but this is offset I think by only making contributions to the mortgage for six months. The husband says he has met payments on the visa card.
The wife says she has made substantial contribution by way of servicing the mortgage and improving the properties. Interestingly none of these matters were challenged in evidence in any meaningful way. Accordingly I find that in dealing with contribution from the date of separation to the date of the hearing the contributions made in this post separation period tend to offset each other.
Summary
How then do I assess contribution? I think this case is appropriate for a global approach. I am going to treat it as a combined pool, especially as the value of the superannuation is minimal in proportion to the value of the property, that is the non super assets, and no splitting order is sought. The wife says 70/30 in her favour, the husband says 50/50. It is clear that the wife made a greater contribution at cohabitation and at the date of separation and in dollar terms this amounts to $192,000 plus $50,000 or in other words $242,285 or 50 per cent of the value of the current asset pool. It needs to be noted that it is not just 50 per cent of the current value of the pool but this is a situation where the relationship is relatively short and there are no children.
The husband contributed $42,079 or 9 per cent of the pool and yet he claims 50 per cent, a claim that is ill-conceived and quite incomprehensible. To give the wife 70 per cent would be to give her credit for the full value of her contribution but to fail to recognise the contribution made by the husband during the course of their relationship and the authorities and in particular the Full Court's decision in Williams talks about the myriad contributions made by spouses during a relationship.
I recognise that a contrary argument however is that to give the wife
70 per cent recognises in a meaningful way the value to the parties of the money that she contributed. In this case doing the best I can I assess the wife's contribution at 65 per cent and the husband's at 35 per cent, thus on a combined pool of assets the wife would receive 65 per cent or $317,320.25 and the husband would receive 35 per cent or $170,864.75.
The husband's pool consists of his super of $49,000 and therefore a payment to him by the wife would be $121,864. Now I note that this falls far short of the $209,000 sought by the husband and is marginally more than the $100,000 proposed by the wife. Finally I ask myself what is the just and equitable order to make under the circumstances. I believe the order that I propose is just and equitable having regard to the substantial contributions made by the wife and the short length of the relationship. Both parties seek similar orders, that is to say that the husband transfer to the wife his interest in both properties in return for a cash payment, but I note there is a difference in relation to the division of furniture and effects in the former matrimonial home. The husband says that it should be divided as agreed. The wife says each keeps what they have. Strangely there was no evidence or submissions about this so I will simply declare that each keeps what they have as a means of avoiding further conflict between them.
Accordingly the effect of the orders that I make and I will now make those orders available to the parties is that the properties be transferred from the husband to the wife in consideration of a payment of $121,864 and I otherwise make orders in the terms of the orders that I now provide to the parties.
I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of Altobelli FM
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