Sinatirra and Sinatirra

[2009] FamCA 467

FAMILY COURT OF AUSTRALIA

SINATIRRA & SINATIRRA [2009] FamCA 467

FAMILY LAW – PROPERTY SETTLEMENT

APPLICANT: Mr Sinatirra

RESPONDENT: Ms Sinatirra

FILE NUMBER: PAF 1201 of 2006

DATE DELIVERED: 13 February 2009

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Stevenson J

HEARING DATE: 27,28,29 October 2009

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Reeve,
Marsdens Law Group 

COUNSEL FOR THE RESPONDENT: Ms De Vere

SOLICITOR FOR THE RESPONDENT: Dimocks Family Lawyers

Orders

1. That the parties do all things and execute all documents required to effect the sale, for the best price reasonably obtainable, of the property situate at and known as L property in the State of New South Wales (‘the property’) and to distribute the proceeds as follows:

   1.1in payment of real estate agent’s commission and expenses

   1.2in payment of legal costs and expenses incidental to such sale

   1.3in payment of all amounts required to discharge the mortgage to the Commonwealth Bank

   1.4in payment of all council and water rates outstanding

   1.5in payment of an amount equal to 54.6% of the balance then remaining to the wife

   1.6in payment of the balance to the husband

2. That the parties do all things recommended by the real estate agent who has carriage of the sale of the property to ensure that it is presented for sale in a neat, clean and appropriate condition.

3. That the husband permit the wife and any other person whom she chooses to accompany her to enter and inspect the property on two occasions per week, on dates and at times to be nominated by her in writing.

4. That the parties have liberty to apply on 48 hours notice, in the event that any difficulty arises in the preparation for sale and marketing of the property.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAF 1201  of 2006

MR SINATIRRA

Applicant

And

MS SINATIRRA

Respondent

REASONS FOR JUDGMENT

The Proceedings

1. Mr Sinatirra (“the husband”), and Ms Sinatirra (“the wife”), are in dispute as to division of their matrimonial property.  The principal asset is the former matrimonial home, L property, with an agreed value of $800,000.  It was common ground that the parties will sell this property.  The wife sought an order for exclusive occupation, to enable her to prepare the property for sale.

2. At the beginning of the trial the husband sought an adjournment to enable him to obtain evidence from a handwriting expert and a forensic accountant.  I refused this application, because he has had two years since the commencement of the proceedings to obtain such evidence.  In fact, the parenting aspect of the parties’ dispute was finalised before another judge in July 2007 and the property component has languished for the subsequent period of 15 months.  I thus took the view that the husband has had more than adequate time to adduce the proposed evidence. 

Background

1. The husband, who is now 54, and the wife, who is now 53, began to live together in 1982.  They married in September 1984 and separated in December 2002.  The husband moved out of the former matrimonial home on 30 December 2002.

2. There are three children of the marriage: M, born in May 1985 (23), S, born in May 1988 (20) and E, born in January 1994 (15). E lives with the wife in rented accommodation at D. M and S live independently.

3. In 1979 the wife completed qualifications as a therapist and commenced work at R Hospital. The husband was employed by O Organisation when the parties began to live together.  He left O Organisation in December 1980 and embarked upon 17 years of employment with B Organisation.

4. In 1984 the wife established a business known as S Business.  This business had one employee until 1992, when that person resigned.  The level of trade has since decreased steadily and the business now has effectively ceased operation. 

5. In 1986 the parties purchased the former matrimonial home at L for $83,000.  The husband’s father made a gift of $10,000 and each of the parties contributed savings.  They obtained a mortgage loan of $65,000 from the Commonwealth Bank.

6. In January 1991 the wife commenced part-time work with the State public service.  This employment became full-time on 1 July 2003. 

7. In 1992 the parties borrowed an additional sum of $65,000 or $70,000 to carry out renovations to the L property.  The mortgage balance then increased to approximately $125,000. 

8. In December 1997 the husband accepted a voluntary redundancy package from B Organisation and received a lump sum of $221,108.  Between January and May 1998 he paid approximately $116,500 from these funds to reduce the mortgage on the L property to $1,271.

9. After the husband left his employment with B Organisation he and two others incorporated a company known as T Company Pty Limited.  In January 1998 they secured a contract related to an overseas event.  As a consequence the husband worked overseas for several periods in 1998.

10. In November 2001 the husband’s company closed down and he took on a management role with EA Company.  This employment terminated in February 2003, when he received a lump sum payment of $45,134.

11. In February 2002 the parties established a joint account with the St George Bank, known as the ‘E’ account.  It seems that their only other joint facility was the Commonwealth Bank mortgage account.

12. Between 24 February 2000 and 13 December 2002 there were ten drawdowns on the mortgage account, totalling $30,900. The husband claimed that he had no knowledge of these drawdowns and is unaware of what happened to this money.  The wife alleged that both parties were involved in these drawdowns, which were necessary to meet expenses of the family. 

13. There were two further drawdowns after the separation in December 2002.  In December 2003 and July 2004 there were withdrawals of $10,000 and $2,000 respectively.  Again the husband said that he had no knowledge of these drawdowns or what happened to the funds.

14. On 2 May 2004 the husband’s mother provided him with $97,500 in cash and an airline ticket to Italy, at a cost of $2,500.  The husband spent approximately $16,000 from these funds on a holiday in Italy for himself and the parties’ daughter S. 

15. After the husband left the former matrimonial home in December 2002 he lived in a house at Z owned by a friend, Ms H.  They formed a romantic relationship, which ceased in January 2008.

16. In July 2006 the parties’ son M purchased a franchise in a home services business.  The husband provided $15,000 for the deposit and each of the parties signed a guarantee for a loan of $50,000 from the Commonwealth Bank.  The husband accepts no responsibility for this guarantee, apparently relying on a purported indemnity by the wife.  She swore a statutory declaration on 14 July 2006 (exhibit 9) which stated that she would accept full responsibility for the guarantee.

17. M defaulted on this loan and the Commonwealth Bank attempted to exercise a power of sale over the L property.  It seems, however, that the Bank never secured its proposed second mortgage and action to recoup this loan has stalled.  According to the husband, the matter is “in the hands of the Ombudsman”.

18. The case for the husband seemed to involve allegations of secretive financial dealings on the part of the wife.  For example, he gave evidence about the installation of two telephone landlines at the L property in 1998 and 2002.  These numbers were variously billed to the names of ‘RA’ and ‘KN’.  These numbers were reassigned to one ‘JL’ at an address in D in October 2005. 

19. I was informed at no stage what I should make of this evidence, nor of the husband’s account of two occasions early in 2007 when he and Miss H rang these numbers.  He said that the first call was answered with “Hullo, [wife’s first name’s] place, can I help you?” by a voice which he recognised as that of the wife.  On the second a different voice answered: “Hullo, [wife’s first name’s]’ place, can I help you?”.  The voice then added “who’s speaking?”.  The husband replied “Hi I am George”.  The voice then said “How can we help you tonight?”.

20. Likewise, I was not told what I should make of an email sent on 25 March 2000 by the wife to her sister (exhibit 11).  Inter alia, the wife wrote:  “And how are all the businesses doing, it is so hard to make the amount of money we deserve isn’t it?  It is just not fair”.   The wife said that she was referring to businesses operated by her sister. 

21. A large amount of material in the affidavit of the husband was properly objected to and excluded.  This material seemed to be part of the attempt to establish that the wife was involved in financial dealings which she chose to keep secret from the husband.  I will deal with the competing applications before me on the basis of evidence, not innuendo.

Approach To These Proceedings

1. According to guidelines established through a series of leading decisions, the Court is required to determine the following matters on the evidence:

   ·firstly, the assets, liabilities and financial resources of the parties to the marriage are to be determined

   ·secondly, all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other

   ·thirdly, the matters in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution

   ·finally, an order under section 79 must not be made unless the Court is satisfied that, in all the circumstances, it is just and equitable to make the order.

The Assets, Liabilities and Financial Resources

Assets

1. The parties agreed on the identity and value of the following assets:

Non-Superannuation Assets
1.	L property	$800,000
2.	Furniture, Motor Vehicle and Personal Effects (W)	$8,465
3.	Furniture and Personal Effects (H)	$1,984
4.	Bluscope Shares (H)	$246
Superannuation Assets
5.	SASS (H)	$9,511
6.	Perpetual Trustee (H)	$63,586
7.	SASS and SANCS (W)	$83,932

1. There was a dispute as to the following assets:

1.	Redundancy Payment Received by the husband in February 2003	$45,134
2.	Proceeds of Sale of BHP Shares	$300-$500

1. During final submissions the legal representative of the husband referred to a potential ‘addback’.  I was not told what amount should be added back to the list of assets, nor were any reasons identified as to why I might take such a course.  In these circumstances, I have difficulty with this submission.

2. On behalf of the wife it was submitted that the husband’s redundancy payment should be included as an asset, as he received this money only two months after the separation.  The husband’s evidence was that he gave $3,800 in cash to the wife and purchased airline tickets to Hobart for her and their daughter E.  Otherwise, he used these funds for his own financial support. 

3. I will not include the husband’s redundancy payment in the list of assets, in circumstances where he used this money primarily to support himself while he was out of the workforce. His unchallenged evidence was that he worked intermittently between February 2003 and August 2006, when he began to receive a disability pension.  There was no medical evidence adduced in his case but I am prepared to accept that he suffers from some form of cardiac complaint.

4. The husband’s evidence was that he sold the BHP shares for $300 to $500.  I will treat the lower figure of $300 as an admission against interest and include the proceeds of sale of these shares as an asset at that value.

5. I thus find the assets of the parties to be as follows:

Non-Superannuation Assets
1.	L property	$800,000
2.	Furniture, Motor Vehicle and Personal Effects (W)	$8,465
3.	Furniture and Personal Effects (H)	$1,984
4.	Proceeds of Sale of BHP Shares (H)	$300
5.	Bluscope Shares (H)	$246
$810,995
Superannuation Assets
6.	SASS (H)	$9,511
7.	Perpetual Trustee (H)	$63,586
8.	SASS and SANCS (W)	$83,932
$157,029

The Liabilities

1. The parties agreed on the existence of the following liabilities:

1.	Commonwealth Bank mortgage	$84,000
2.	Council Rates	$650
3.	Australian Credit Union (W)	$3,424
4.	Australian Credit Union (W)	$449
5.	Visa Card (W)	$600
6.	MasterCard (W)	$4,600
7.	Visa Card (H)	$3,000
$96,723

There was a dispute as to whether the sum of $97,500 advanced to the husband by his mother and the $50,000 loan guarantee for the parties’ son M should be included as liabilities.

1. The husband’s mother said she that sold a parcel of real estate and, from the proceeds, she provided $100,000 to each of her three sons.  She was clear that she expects full repayment from each of the husband and his two brothers.  On the other hand, she said:  “what can I do?” in response to a question as to what would happen if her sons failed to repay her in full.  Her other sons have repaid $80,000 and $20,000 respectively to her.

2. There is no legal obligation on the husband to repay these funds to his mother.  There was no evidence as to the terms of the purported loan, such as the timeframe for repayment or the rate of any interest.  There has been no attempt by the husband’s mother to secure the return of the money in the last four and a half years.  I thus regard the husband as having a moral obligation, at best, to repay this money to his mother.  The arrangement seems to be in the nature of sharing of funds within a family, rather than a situation of genuine debt.  I will not include this sum of $97,500 as a liability for the purpose of determining the value of the net pool of property. 

3. On behalf of the husband, it was suggested that it may be appropriate to “leave [the Commonwealth Bank guarantee] where it falls”.  The result would be to allow the Bank to collect the sum of $50,000 as it is able.  I am not aware of the whole of the circumstances surrounding the execution of the guarantee documents and the options open to the Bank.  It thus seems to me that the course suggested on behalf of the husband is appropriate.  I will not include the sum of $50,000 in the list of liabilities.

4. In the Outline of Case document submitted on behalf of the wife, her counsel wrote:

   “the wife acknowledges that the debts outlined above as being attributed to debts of the wife are not the joint debts of the parties”.

   Relevantly for present purposes, these liabilities included the two credit union debts, the Visacard and the MasterCard.  I infer that the wife incurred these debts after the separation and thus conceded, fairly, that no notional responsibility should be attributed to the husband.

5. In my view, the same analysis applies to the husband’s Visacard debt.  The wife should not be required to share in this liability.

6. For the purposes of determining the value of the net pool of property, I thus find the liabilities to be as follows:

1.	Commonwealth Bank mortgage	$84,000
2.	Council rates	$650
$84,650

Financial Resources

1. The wife has a financial resource in the form of an inheritance from her parents, who died early in 2008.  She said that she anticipates that she will receive approximately $100,000 at some unspecified time in the future. 

The Contributions of the Parties

1. The wife claimed that she had savings of $5,000, a motor vehicle and personal effects at the commencement of cohabitation.  This evidence was unchallenged. 

2. The husband maintained that he had approximately $15,000 in savings and a small parcel of BHP shares at the commencement of cohabitation.  The wife said that she was unaware of the extent of his assets and liabilities.  This evidence, too, was unchallenged.

3. It was common ground that the husband’s father gifted to him or the parties a sum of $10,000 when they purchased the L property in December 1986.  It was also undisputed that the husband’s mother advanced to him cash of $97,500 in 2004.  From this money the parties’ daughter S received the benefit of about $6,000, being the cost of a holiday in Italy.

4. The wife conceded that she received some benefit from the money advanced by the husband’s mother.  The husband said that he gave to her $3,000 in cash between May and July 2004 and the wife did not seem to dispute this evidence.

5. In the case for the husband, considerable reliance was placed on his redundancy payment of $221,108 in December 1997.  It was suggested, effectively, that this payment was a weighty factor in his favour in the assessment of contribution.  The fact is, however, that 15 out of the 17 years of the husband’s employment with B Organisation took place during the parties’ cohabitation.  During that lengthy period both parties made contributions of various kinds, in terms of their employment, the improvement of the L property and the raising of their children.  In other words, the husband’s entitlement to the redundancy package arose during the course of 15 years of family life and not because of any isolated endeavour on his part.  I am thus not inclined to attribute substantial weight to the husband’s receipt of these funds.

6. As noted, there was an issue between the parties as to how the drawdowns from the mortgage account occurred and what became of this money.  Essentially the husband alleged that the wife withdrew $30,900, before separation, and $12,000 after he left the matrimonial home, without his knowledge or consent.  He conceded that there were two drawdowns totalling $10,000 in 1999 and 2001, of which he had knowledge and to which he consented.

7. The wife said that, during the two years prior to the separation, the husband was frequently absent from the former matrimonial home and provided little money for the support of the household.  She maintained that she felt uncomfortable asking him for money.  On the other hand, she claimed that she recollected several occasions when the parties attended their bank together and withdrew funds from the mortgage account.  In particular, the wife recalled two such occasions in 2000.

8. The wife accepted that her business, S Business, received a total of $6,350 in 2000, as the husband alleged, from money drawn down on the mortgage account.  She said that she used the sum of $2,000 drawn down in 2004 to meet most of the cost of a new fence at the L property. 

9. The husband implied that the wife improperly caused his signature to be affixed to the withdrawal slips which were used to extract money from the mortgage account.  The evidence does not warrant such a finding.  The wife said that she saw the husband sign the withdrawal slips.  She denied that any other person signed the husband’s name at her request.  Having regard to her demeanour, I found this evidence convincing.

10. The husband carried out a tracing exercise, in respect of the money drawn down from the mortgage account, and set out the results in his affidavit.  The wife accepted that she received the money located in accounts in her name or that of S Business.  She said that she used the money which she received for the support of the family.

11. The wife said that she recollected being present at the bank with the husband, when money was drawn down on the mortgage account.  She said that she recalled seeing him leave the premises with cash.  It was not put to the wife that this evidence was incorrect.

12. The husband said that the wife took on the role of manager of the family’s finances and that he received little information as to their affairs.  In these circumstances it could well be that he now looks back on the past with unwarranted suspicion.  I am not satisfied that the wife had use of funds drawn down on the mortgage account for her sole benefit.  I consider that she used the money withdrawn from this account, and which was traced to her accounts, for the benefit of the family.

1. It is clear that the husband was a hard worker and a good financial provider during the marriage.  I have no doubt that he made all of his income available for the benefit of the family.

2. The husband alleged in his affidavit that the wife mislead him as to the extent of her work hours during the 1990s.  He seemed to complain that she worked only 19 to 25 hours per week between 1991 and the separation.  In my view, it should be remembered that she was primarily responsible for the care of the children and the running of the household during these years.  The husband was free to engage in full time employment during this period.

3. Since 1998 the husband has made no mortgage repayments, despite having known of the extent of the liability since May 2006 and being in occupation of the L property since about July of that year.  The wife, too, has made very little in the way of mortgage repayments.  There is no doubt that she was fully aware of the extent of the liability to the Commonwealth Bank at all times.  In these circumstances it seems to me that both parties must accept responsibility for the current level of the mortgage debt.

4. Despite all of the husband’s complaints as to the wife’s financial conduct, it was ultimately submitted on his behalf that contribution should be found to be equal as at the date of trial.  On behalf of the wife, it was submitted that contribution should be found to be equal as at the date of separation but to favour the wife by “at least 10%” over the ensuing period of six years.

5. I am not persuaded that then wife’s post-separation contributions favour her by a minimum of 10% of the net pool.  The children were aged 17, 14 and 8 in December 2002, so she cared for and supported M for only 5 months until he turned 18.  The husband did make various payments which assisted with the support of S and E.  He also took S on a holiday to Italy.

6. The wife occupied the L property for 3 years and 9 months after the separation, while making practically no contribution to the mortgage repayments.  During this period the husband lived with Ms H, to whom he paid nominal rent or board.

7. It is true that the wife has shouldered most of the responsibility for the financial support and physical care of E for the six years since separation.  On the other hand, the husband has provided some funds and the wife had the use of the L property, at minimal cost to her, for a substantial time.

8. It is my view that contributions favour the wife, during the period between separation and trial.  I consider that her contributions exceed those of the husband by 2.5%, primarily because of her care and support of the parties’ daughter E.  I thus find that contribution should be assessed at 52.5% to the wife and 47.5% to the husband.

Section 75(2) Factors

1. I have considered all of the factors set out in section 75(2).  I will refer, however, only to those factors which seem to me to be relevant to the present proceedings.

2. The husband is now 54 and the wife is 53 years old.  There was some suggestion that the husband suffers from a cardiac complaint and, certainly, there was no challenge to his evidence that he has received a disability pension since August 2006.  There was nothing in the evidence to indicate that the wife suffers any health problems.

3. The husband has not engaged in paid work since 2006.  He said that he hopes to resume employment on a part time basis.  The wife works full time as a therapist and earns approximately $70,000 per annum. 

4. The wife has sole responsibility to care for the parties’ 15 year old daughter E.  She receives no child support from the husband.  Unfortunately E spends no time with her father, for reasons of which I am not aware.

5. Each of the parties has superannuation benefits.  There was no evidence as to when either party is likely to access these funds.

6. The wife has a financial resource, in the form of her inheritance from her parents.  As noted, she expects to receive approximately $100,000 at some unspecified future time.

7. The salient factors, pursuant to section 75(2), seem to me to be the imbalance in the capacity of the parties to engage in gainful employment and the wife’s responsibility to care for and support E for the next three years.  The wife has the security of full-time employment with a State government department.  The husband hopes to obtain part-time work but his health is such that he has received a disability pension for over two years.

8. If the husband succeeds in finding part-time employment, he would not be assessed to pay a large amount of child support for E.  To some extent, his limited working capacity offsets the weight to be given to the wife’s responsibility toward E.  I also bear in mind that the wife has a pending inheritance of approximately $100,000.  Ultimately, however, I conclude that the balance weighs in favour of the wife.  I find that there should be an adjustment of 2.5% in her favour on account of section 75(2) factors.

Result

1. I thus find that the net pool of non-superannuation property should be divided as to 55% to the wife and 45% to the husband.  Neither party sought a superannuation splitting order, so these benefits will remain in their present beneficial ownership.  The difference in the gross values of the benefits of each of the parties is not sufficiently significant to warrant further consideration.

2. The value of the net pool of non-superannuation property is $726,345, 55% thereof equals $399,490 and 45% equals $326,855.

3. The husband has or has had the following assets:

1.	Furniture and personal effects	$1,984
2.	Proceeds of sale of BHP shares	$300
3.	Bluescope shares	$246
$2,530

He thus he requires an additional $324,325 from the proceeds of sale of the L property.

1. The wife has only her motor vehicle, furniture and personal effects valued at $8,465.  She thus requires $391,025 from the proceeds of sale of the L property.

2. I have no evidence as to the likely sale costs of the L property.  I will thus frame orders as a percentage distribution of the proceeds of sale.

3. The differential in the amounts to be taken by the parties favours the wife by $66,700.  Primarily, this differential exists because of her responsibility to support and care for the parties’ daughter E for the next three years.  If the husband succeeds in obtaining part-time employment, she should receive child support for E.  For these reasons I regard this outcome as just and equitable.

The Application for Exclusive Occupation

1. The wife sought an order that she have exclusive occupation of the L property, pending its sale.  She maintained that the husband has allowed the condition of the property to deteriorate, thus jeopardising the parties’ prospects of obtaining an optimal sale price.

2. A single expert, Mr B, inspected the property for valuation purposes in November 2007.  Mr B described the property as “poorly presented” and referred to “overgrown” yard areas, which “have been unmaintained for an extended period of time”. 

3. Mr B reported:

   “The dwelling overall is considered to be in generally below average condition and whilst appearing generally structurally sound, its lack of maintenance over several years and accumulation of stored material throughout markedly, affects its presentation and appeal.”

4. The wife gave evidence of her observations of the state of the property in November 2007.  She, too, described overgrown grounds and generally poor presentation of the property.

5. I am concerned that there is no more recent evidence of the condition of the property.  I am also mindful that the husband now is confronted with the prospect of maximising his own benefit from the sale of the property.  Obviously, it is in his own interests to ensure that its condition is optimal.

6. I will not require the husband to leave the property for the short period before a sale.  I will order that the husband do all things recommended by the real estate agent to ensure that the property is presented for sale in an appropriate condition.  I will make orders which provide for full access to the wife or her agent.  If she or the real estate agents have concerns about the condition of the property, an application can be made on short notice.

7. The wife sought orders in relation to the distribution of chattels in the Minute included in the Outline of Case submitted on her behalf.  There was no evidence at all, nor any submission, to justify the making of these orders.  The parties will simply have to work out for themselves how they divide the chattels which remain in the L property.

I certify that the preceding eighty (80) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson

Associate:     

Date:              13 February 2009