SINGLETON & SINGLETON

[2013] FCCA 9

FEDERAL CIRCUIT COURT OF AUSTRALIA

SINGLETON & SINGLETON [2013] FCCA 9

Catchwords:
FAMILY LAW – Property dispute – thirty year relationship – husband in secure and long term well-paid employment – wife’s financial future uncertain – wife’s significant health problems – four year separation during relationship – weight to be given to separation in division of superannuation assets – weight to be given to husband’s greater contributions.

Legislation:
Family Law Act 1975, ss.75(2), 79(2), 79(4)

Cases cited:
Stanford v Stanford [2012] HCA 52
Erdem v Ozsoy [2012] FMCAfam1323

Applicant: MS SINGLETON

Respondent: MR SINGLETON

File Number: MLC 3439 of 2012

Judgment of: Judge Burchardt

Hearing dates: 6 & 7 February 2013

Date of Last Submission: 7 February 2013

Delivered at: Melbourne

Delivered on: 15 April 2013

REPRESENTATION

Counsel for the Applicant: Mr Williams

Solicitors for the Applicant: Hughes Legal

Counsel for the Respondent: Ms Smallwood

Solicitors for the Respondent: Lampe Family Lawyers

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 3439 of 2012

MS SINGLETON

Applicant

And

MR SINGLETON

Respondent

REASONS FOR JUDGMENT

1. This is a bitterly fought property dispute.  That agreement has not been reached is not surprising when you consider the positions of the parties.  The applicant wife wants 80 per cent, or alternatively 70 per cent, of the property pool, less superannuation, which is essentially to be split equally between the parties.  The respondent husband seeks that the property pool be divided 55/45 in his favour and a superannuation split that gives the wife one third of his superannuation at the time of final separation. 

2. In my view both parties have wildly over-estimated the strength of their cases and as it happens the just and equitable disposition of the matter, for the reasons that follow, is exactly half way between their positions.  There will be an Order that the wife receive 62 ½ per cent of the relevant items in the property pool, together with $158,482 of the husband’s superannuation. 

The facts which are uncontroversial

1. The wife was born [in] 1961 and is employed as a [occupation omitted] on a limited salary of $506 per week according to her most recent Financial Statement ($471 per week in her most recent Affidavit filed 29 January 2013).  The wife has no professional qualifications and her future employment prospects are limited.

2. The husband was born [in] 1960 and has for very many years been employed by [omitted] with whom he earns an excellent salary, together with ancillary conditions, including it would appear bonuses and preferential share treatment.

3. Although the parties married [in] 1984 (although they are now divorced it is convenient to continue to refer to them as husband and wife), they had been in a relationship since their teens.  They managed to purchase their first property from their pre-marriage savings. 

4. The parties have three children of the marriage namely [X] born [in] 1992, [Y] born [in] 1994 and [Z] born [in] 1995.  [X] and [Y] live with their father.  [X] is a university student and [Y] is a trainee. [Z] is in year 12, and pursuant to some recent events is presently living with his mother.

5. The parties bought and sold properties from time-to-time as part of their common endeavours.  The wife worked until the birth of her first child and returned to work at a later point in 2007.  The husband worked throughout.

6. It is common cause that the wife has had difficulties with alcohol from time-to-time but their timing and extent is a matter in issue to which I shall return.

7. It should be noted that one of the properties that the parties owned at one time, in [M], had the misfortune to be situated immediately next to the notorious criminal, [Mr J]. The family home was used for surveillance by the police which became known to [Mr J] who then made death threats. In the ultimate in 2004 the parties received $120,000 as a result of an action brought by them against the Victorian Government based on these events.  Scarcely surprisingly, they had had to move from the [M] home.

8. Counsel for the wife described the $120,000 (accepted by all parties as correct despite some earlier quibbles) as an external source of funds.  While this is true at one level of analysis I think that this is a source of funds that was generated by the parties in the sense that it was a direct result of their misfortunes and the anxiety and distress suffered by them as a result of their experiences involving [Mr J].

9. The parties first separated in May 2002. The wife and the children continued to live at the then family home at Property E. It is common cause that the husband paid the mortgage and the rates on the property throughout the period of separation until the parties re-partnered in 2007.  It would appear that the husband also paid the wife $250 per week throughout this period. 

10. The Property E property was sold at a date not entirely clear, but it would appear in 2006 or early 2007 and with the net proceeds of sale they bought the former matrimonial home at Property K. 

11. Notwithstanding their reconciliation, the parties finally separated under one roof in April 2008 and remained so separated until the wife vacated the matrimonial home in December 2012.

12. Interim Orders were made by the Court on 12 June 2012 which inter alia caused a sale of some [W] shares in respect of which each party received about $18,000.

13. The husband worked hard and successfully, both to qualify himself part time over some years and to advance his career with [company omitted].  He even worked a second job at [omitted] to provide for the family’s financial needs.

14. The husband has, as I have said, long term and secure employment with [omitted].  His Christmas bonus last year was $5,000 and for the year before that about $9,000.  This, of course, does not guarantee him further bonuses.

15. The husband also, to a greater or lesser extent, owns various parcels of shares with [N] which are matters to which I shall return in dealing with the pool.

16. Following an incident which took place during the weekend before the trial, [Z] has returned to live with his mother.  [Z] was behaving what appears to have been a somewhat typically difficult adolescent way and the father concedes that he lost his temper with him and shouted at him and swore that he would not pay his school fees.  In fact, he will continue to pay [Z]’s school fees but for the moment at least [Z]’s relationship with his father is somewhat fractured. 

Some Matters in Dispute – the extent of the Wife’s Alcohol Difficulties

1. A certain amount of time was spent in ventilating the extent to which over time the wife has been in effect an alcoholic and not able largely to function.  The husband asserted that the wife’s difficulties became significant in 1999 whereas the wife said that she fell into difficulties in 2002, not least because of stress associated with [Mr J] and the death of one of her parents.  The wife asserted that she had drunk no alcohol for some five and a half years following a car accident in 2002 whereas the husband deposed that she had on occasions been drunk during this period.

2. It should be noted that while the period concerned was likely co-extensive with the parties period of separation, it is quite clear from the evidence as a whole that the separation while extant as a matter of law (as conceded by both parties) was much less so as a matter of practical politics.  The husband went around routinely and regularly as he wished to the home in Property E and clearly contributed significantly to the family’s affairs during that time and would have had plenty of opportunity to observe the wife during this period.

3. Following cross-examination of the wife it is clear that the mother spent 28 days in rehabilitation in [omitted] in 2002, had a further eight days in January 2011 and finally a period more recently from which she was released only on 25 January 2013.

4. In my view it is more probable than otherwise that the wife made significant efforts to rehabilitate herself in 2002 but her ongoing lack of success suggests to me very strongly that she may have had relapses from time-to-time between 2002 and 2007.

5. I should make it clear at this stage that I found both the husband and the wife to be generally good witnesses whose evidence was given in a fashion that I would describe as responsive and sincere.  To the extent that they differ in my view this reflects different perceptions of the relevant events rather than any kind of dishonesty on the part of either of them.

6. I form no significant adverse credit view of either of the parties.

7. In view of my findings about the wife’s ill health during the period from 2002 to 2007, I accept that it is very probable that the husband may have contributed slightly more than would otherwise have been the case to the welfare and well-being of the children during this period.  It is equally clear that whatever her failings the wife remained the primary home-maker throughout.

8. I note that whatever difficulties she may have encountered the wife was able to commence part-time employment in 2007 in any event.

The Wife’s Continuing Capacity for Employment

1. This issue was a further area of dispute between the parties.  It may be dealt with briefly.  The wife has significant mental health problems and has suffered from depression and continues to do so.  Although she has presently undergone a period of treatment, it cannot be certain by any means in the light of her history, that she will be able to abstain from alcohol successfully in the future.

2. The wife has limited educational attainments and no professional skill.  It is most improbable that she will ever be able to obtain anything but poorly remunerated employment.

Conclusion about the Parties and the Evidence

1. Despite the fact that this matter was strongly contested over two days, and one may question whether it should have been, the fact is that, as I have said, the parties’ evidence was in the main believable and unremarkable.  I have set out most of it in the uncontroversial section above and dealt with the two discrete issues that I think are required to be dealt with at this stage.  A more detailed recitation of the evidence is in view of these conclusions in my opinion unnecessary.

Section 79(2) – the Operation of the High Court’s Decision in Stanford

1. Since the decision of the High Court in Stanford v Stanford [2012] HCA 52 it is clear that the Court does not embark upon considering matters under s.79(4) of the Family Law Act 1975 (“the Act”) until an antecedent decision is addressed.  That question is whether or not the Court should, in the light of the parties’ legal and equitable interests, conclude it is appropriate to make any Order at all to alter their property interests.  It should be noted, however, that the High Court also made it clear in Stanford that in most cases this would not be a difficult matter.

2. This case is one of what will always be likely to be the vast majority of cases in which it is entirely appropriate to make an order adjusting the parties property interests.  As Walters FM, as his Honour then was, pointed out in Erdem v Ozsoy [2012] FMCAfam1323 at [116]:

   “In most cases — relevantly, where the parties have separated and are no longer living in a marital relationship — the underlying assumptions that the parties had to the effect that the existing property ownership arrangements were functional (or perhaps irrelevant) and could be varied by agreement between them, no longer apply. That fact alone should ordinarily persuade the court that it is just and equitable to make orders altering the parties’ interests in their property.”

3. This is self-evidently exactly such a case.

The Pool

1. The property pool in this case is in large part agreed. 

   ASSETS

   a)Matrimonial home at Property K,  $ 630,000

   b)Respondent’s Ford motor vehicle  $     9,000

   c)Wife’s RAV 4 motor vehicle  $   13,000

   d)Respondent’s shares with [N]   $   89,644

   e)[T] shares     $       450

TOTAL OF ASSETS:  $ 742,094

LIABILITIES

a)   Housing loan to National Australia Bank  $ 166,532

b)   Wife’s NAB Visa  $   18,477

c)   Husband’s NAB MasterCard  $   10,611

d)   Husband’s personal loan  $   35,294

e)   Husband’s CBA Visa  $   34,908

TOTAL OF LIABILITIES:  $ 265,822

SUPERANNUATION

Applicant  $   27,645

Respondent  $  581,578

1. There are three matters in the pool that are not the subject of agreement.  The first is a caravan. The parties agree that it should be sold but disagree as to when. The wife seeks that it be sold immediately and the husband seeks that it be sold forthwith after Easter.

2. The husband’s evidence is that the daughter, [X], has an emotional attachment to it and he wishes to spend Easter in the caravan with her and presumably also [Y] before selling it.

3. To an extent that sale would be better affected now than in effect at the end of the summer season, but the husband gave convincing evidence to my mind that this is a very popular caravan site with a waiting list and his evidence that the sale would be just as easy to obtain after Easter makes sense in my view.

4. Accordingly, the caravan will be sold as soon as practicable after Easter (I note the husband has undertaken to pay the site rental in the meantime) and the net proceeds will be divided as to 62 ½ per cent to the wife and 37 ½ per cent to the husband. 

5. The next matter in disagreement is the husband’s [N] shares.  He has a tranche of 710 shares worth approximately $18,000.  They are subject to a loan that is being repaid and which loan will be completely repaid by September 2013.  Plainly these are to all effects and purposes owned by the husband and should be included in the pool. 

6. The husband also has 971 [N] shares, which are held on trust by the bank.  He will know by 2015 whether they will vest in him and the husband’s estimate was that there was a 75 per cent chance that this would be the case.  They cannot be included in the pool but I will take them into account as a resource available (far more probably than otherwise) to the husband’s future. 

7. I note in passing that the $30,000 advanced by the husband’s mother in very early days (about 1994) was repaid by 2007.  It was apparently never the subject of any interest. 

8. I further note that the husband has salary sacrificed 5 per cent of his salary to his superannuation.  Criticism was made by counsel for the wife to the effect that this was money that should have been made available for the daily upkeep of the family.  I roundly reject this assertion.  Even on a salary of $120,000, such as that the husband presently has, the figure thus sacrificed would be no more than $6,000 a year upon which tax would otherwise have been payable.  It has produced the net superannuation asset now available for distribution and any suggestion that there was anything untoward or inappropriate in this regard, both as to its conduct at the time and as to its outcome, is completely misplaced.

9. The husband also has a set of shares with [N] fully vested in him worth, it is said, $94,080.  In my view the bickering about what happens to these shares was one of the less attractive aspects of the case.  I think that the best way to deal with it is to sell the shares and divide the proceeds as to 62 ½ per cent to the wife and 27 ½ per cent to the husband, keeping back $10,000 for possible capital gains tax and an Order that any shortfall or surplus be distributed in the like proportions.

Contributions

1. Absent the wife’s alcohol related difficulties this would be a classic 50/50 case.  The parties co-mingled their finances it would appear from their late teens at the latest and were in a relationship for 30 years.  Their fortunes waxed and waned as peoples do.  The husband certainly worked very hard and he, for many years, undertook a second job.  He has plainly committed himself in the most commendable way to his family’s future. Likewise, the wife, as the Family Consultant Ms S recorded, looked after the home, brought up the children and worked as best she was able throughout.  A dollar for dollar comparison of the parties’ earnings would plainly not be appropriate.

2. Counsel for the husband submitted that the inordinate extra input occasioned on the part of the husband by the wife’s difficulties should give rise to a 20 per cent loading in his favour. Counsel for the wife sought to diminish the force of any such argument to the point of extinction. Counsel went so far, however, as to concede that at worst there might be a 5 per cent adjustment in the husband’s favour in this regard.

3. I have already mentioned the $30,000 advanced by the husband’s mother in 1994.  While it must have had a beneficial effect, in the context of proceedings in 2013, in my view, it gives rise to no extra weighting.  I note that the parties were able to buy their first property out of their own savings and not with the husband’s mother’s funds.

4. The reality is that for most of the period during which it seems more likely than otherwise that the wife may have faced the greatest difficulties, which appear to be from around about the early 2000s through to 2007, the parties were separated, although as I have earlier indicated the husband remained much more involved with the family than that word “separation” would suggest.  Nonetheless, the wife was living ostensibly largely on her own with the three children.  She must have been able to function at least to an extent.  I have accepted that while the wife may have had difficulties with drinking from time-to-time during this period, the flavour of the husband’s evidence was clearly to the effect that the wife drank in the evenings.  I would infer that to the extent that she was impaired, it would more probably than otherwise not have impacted very significantly upon the wife’s looking after children, who at that stage were aged approximately 14 and downwards.

5. These things involve matters of impression and judgment in circumstances where the evidence does not permit absolute certainty as to conclusions.  In all the circumstances and doing the best I can, and giving some emphasis to the husband’s second job which is a matter out of the ordinary, I think that the contributions should be assessed with a 7 ½ per cent loading in the husband’s favour.

The Future needs for Section 75(2) factors

1. Here the picture, unfortunately, is very much the other way.  The wife’s future employment prospects are poor.  She is in receipt of only limited statutory benefits.  I should interpolate and say that despite counsel for the husband’s best efforts I accept that the wife receives only very small amounts of a family assistance in the sum of some $26 per week.  The larger lump sum she obtained was some form of arrears.

2. The husband will continue to earn a very good salary together with bonuses from time-to-time and he has available to him (or will do so shortly) a tranche of almost $20,000 in crystallised bank shares and a 75 per cent chance of obtaining a rather larger tranche in approximately two years time.  He does not have to pay anything or do anything more than stay in employment to have these resources available to him.

3. Against this the husband, it should be noted, has the care of the two elder children who live in typically pandered circumstances (and this is not a criticism as parents are notoriously generous) and who contribute nothing to the general running of costs of the household.

4. The wife’s health is poor.  She has undergone major surgery that limits her work capacity and must make every facet of life more difficult for her. She cannot lift heavy weights. Even conducting her own household must be a trial. Furthermore, her mental health is also attended by considerable difficulties and the future of her dependency upon alcohol must, in the light of past history, be uncertain although one would obviously wish for the best.

1. The parties are roughly of an age but one can say with complete certainty that so far as the evidence permits any conclusions the husband’s financial future and capacity to provide for his needs and the needs of the two elder children to the extent that he may choose to do so is well assured, whereas that of the wife to provide for herself and one child who seems likely to be living with her is much less so.

2. The disparity in the parties’ earnings will only increase if anything given their circumstances.

3. In all the circumstances, in my opinion, the wife should receive a 20 per cent loading in this regard.

Just and Equitable

1. In my view, a result that gives the wife a 62 ½ per cent of the pool is evidently appropriate.  I note that the pool has not included for these purposes the husband’s future resources in terms of the as yet not wholly vested [N] shares.  These matters I should make it clear have been borne in mind by me in considering the parties’ future needs and the percentage adjustment appropriate under that heading.

2. In my view, an outcome that gives the wife 62 ½ per cent is eminently appropriate. It is a just and equitable disposition of the parties’ property and chattels.

3. In this regard I have set to one side the wife’s $10,000 relocation expenses.  While it is true she had to spend money to re-establish herself, she has had in the main the benefit of the chattels she has purchased, and the matter of the bond on the premises where she lives (in one sense the only matter that involves her spending money without immediate material return) will doubtless be adjusted when she leaves the premises she occupies.

Superannuation

1. Both parties approach superannuation on the footing that it should be assessed separately and differently to the pool otherwise.

2. The husband’s position was that his superannuation should be assessed as at the date of separation and that the wife should obtain one third.  The wife’s position was that the extant total of some $581,000 should be reduced to $500,000 to reflect the period of separation.  By adding in the wife’s superannuation $28,000 a total of $528,000 is received, which should be simply effectively divided as to half each. 

3. It must be accepted, and no-one submitted the contrary, that the superannuation accrued during the period of separation between 2002 and 2007 owes nothing in either instance to the other party.  So much was effectively conceded by the parties. 

4. The husband’s evidence, not challenged in cross-examination, in paragraph 30 of his affidavit filed 24 January 2013 is that in May 2002 (the date of the first separation) the superannuation was worth $220,000. It had increased to $503,000 by May 2007 when reconciliation took place, although it had decreased at the date of final separation to $475,000 in April 2008. It now stands in excess of $581,000. On any view, over $300,000 of that figure was accrued during periods that the parties were not contributing to each others benefit in the marital relationship. 

5. The unusual facts make this a not altogether simple matter, especially bearing in mind the vagaries of the share market and its effect upon superannuation of more recent times.

6. In the ultimate, I think that the just and equitable outcome is to approach the matter in the manner sought by the husband.  It gives proper credit to the fact that there was an extensive period during which the wife contributed nothing in effect to the husband’s superannuation and while it is a rough and ready way of doing it (this methodology produces $158,482 rounded off), the figure seems to me in all the circumstances to be an appropriate one. 

Conclusion

1. I have endeavoured in these Reasons for Judgment to canvas all the matters the parties have raised that seemed to me to be of any moment.  I will request the parties’ legal representatives to draw up minutes of Orders to give effect to these conclusions bearing in mind that I am not aware whether or not the husband will or will not be able to retain the matrimonial home in the light of the percentage divisions that I have indicated and bearing in mind that he has expressed a strong desire to do so.

2. I will also need to hear further submissions about the add-backs in the case.  These constitute the husband’s paid legal bills of $25,218, the $3,800 in relation to the wife’s various legal expenses and disbursements and the $11,000 cash in the bank described in the aide memoir presented by counsel for the wife as a resource. 

3. I regret to say that despite my best study of my notes and the materials I am not sure that I fully appreciate the parties’ positions in the relation to these aspects of the matter.  I will need to hear further submissions about these matters also. 

I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Associate: 

Date:  15 April 2013