Slater and Slater

[2017] FCCA 2908

FEDERAL CIRCUIT COURT OF AUSTRALIA

SLATER & SLATER [2017] FCCA 2908

Catchwords:
FAMILY LAW – Property – long marriage – equal contributions – personal injuries compensation – child of previous relationship in the parties’ household.

Legislation:

Family Law Act 1975, s.75(2)

Applicant: MR SLATER

Respondent: MS SLATER

File Number: ADC 3737 of 2013

Judgment of: Judge Young

Hearing dates:

16 & 17 February 2017 and

1 & 2 November 2017

Date of Last Submission: 2 November 2017

Delivered at: Adelaide

Delivered on: 24 November 2017

REPRESENTATION

Counsel for the Applicant: Mr Birchill

Solicitors for the Applicant: Welden & Coluccio Lawyers

Counsel for the Respondent: Mr Roberts

Solicitors for the Respondent: Josephine Caruso

ORDERS

1. The husband is to authorise the payment of the entire sum (principal and any interest) in the (omitted) Conveyancers Trust account to the wife within 90 days.

2. The husband is to pay the wife $51,781 within 90 days.

3. The wife is to do all things necessary to transfer her interest in (business omitted) to the husband contemporaneously with the husband complying with Orders 1 and 2.

4. The wife is to deliver to the husband all of his personal diaries and any documents or books of account relating to (business omitted) forthwith.

5. The (omitted) time share interest of the parties is to be sold and the proceeds divided equally.

6. Otherwise each party shall retain ownership of all property currently in his or her possession.

7. Liberty to apply for consequential orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 3737 of 2013

MR SLATER

Applicant

And

MS SLATER

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for alteration of property interests. The wife is 65 years old.  The husband is 61 years old.  The parties commenced their relationship in 1983 or 1984.  The husband was then working as a (occupation omitted) and the wife as a (occupation omitted).  They separated under one roof in August 2012 and divorced in December 2013.  The husband moved out of the former matrimonial home in June 2014.  The marriage lasted about 28 years to the time of separation.

2. When the parties began their relationship, the wife’s son, Mr M, was about eight years old.  He lived with the parties as a member of their household until he left to attend the (omitted), presumably as a young adult.

3. The parties owned no property of any significance at the beginning of their relationship apart from some money which was the proceeds of a compensation claim by the wife and, according to the wife, some savings.  The wife said this amounted to $50,000, of which $13,000 was constituted by compensation moneys for an injury received before the relationship began.

4. The wife produced no records to support this claim of $50,000 in savings.  However, both the husband and the wife said that the wife contributed $20,000 towards the deposit or purchase of the former matrimonial home at Property A.  I accept that this amount was contributed by the wife.  The purchase price of the property was said to be $86,000.

5. I should say that I found aspects of the wife’s evidence, particularly relating to previous financial transactions, to be unreliable at times.  At one point she strongly denied ever receiving any benefit from gifts from the husband’s father (which had amounted to $16,000 during the marriage) until it transpired that she had banked the money herself into a joint account.  On the other hand, the husband’s statements about past financial transactions were shown to be generally accurate.

6. In 1986 the parties purchased a business, later called (business omitted), which owned (omitted).  The husband said the purchase price of the business was $130,000, with the purchase price made up of $120,000 of borrowed funds and $20,000 of the parties’ own funds, made up of $5,000 from another compensation award to the wife, $10,000 representing the husband’s long service leave on retirement from his job as a (occupation omitted) and $5,000 from other income.  The wife said the purchase price was made up of $120,000 in borrowings and $20,000 in moneys derived from the compensation award to her.  In the absence of corroborating evidence, I do not think I can make a definite finding but, on balance, I consider the husband’s evidence is more likely to be correct.

7. The Property A property was sold in 1998 for $170,000 and the mortgage debt of $20,000 was discharged at settlement.

8. A home at Property B was purchased for $470,000 using the proceeds of sale of the Property A property and further borrowings.

9. Another property at Property C, was purchased as an investment property.  Later, another property at Property D was purchased for $355,000.

10. In or around 2007, the wife received an award of damages as a result of an injury received in (country omitted) while, I understand, the parties were on holiday.  The amount received was around A$100,000.  About $70,000 of this was preserved in a bank set-off account.

11. In 2010, the $70,000 was used as a deposit on a property at Property E purchased for $378,000 in the wife’s name and the balance was contributed from borrowed funds.

12. In 2012, after separation, the wife withdrew $24,500 from the joint account of the parties and later, in April 2014, withdrew a further sum of $26,726 which the wife said represented three months wages due to her from the (business omitted) business plus one half of the remaining money in the account.  The sum of $16,547 was left in the account for the husband who closed the account shortly after.

13. The husband also points to three other withdrawals by the wife from the joint account totalling $4,614 in March 2014.

14. The husband says these amounts should be added into the ledger on the wife’s side on the basis that she was taking her property entitlement early.  I do not accept that submission in relation to the three separate amounts totalling $4,614 which seems to represent ordinary withdrawals from the joint account at a time when the wife was still a director and shareholder in the business and was entitled to share in the income.  However, I consider the larger withdrawals of $24,500 and $26,726 in a different light and I find that these constitute capital withdrawals which need to be taken into account.

15. To add complexity to the issue, the wife says that in about April 2014 she gave $33,000 to the parties’ daughter, Ms J, to enable her and her husband to purchase a property in (omitted). The money was used to make up a shortfall in the purchase price.  The wife does not assert that Mr Slater agreed to this transaction but she says she told him about it and he neither agreed nor disagreed.  I do not think I can make a finding about that beyond the agreed position that Mr Slater did not consent and that the bulk of the $33,000 had its source in the joint funds of the parties.

16. The vendor of the (omitted) property was interested in acquiring the Property D property, which had been occupied by Ms J and her husband, as a swap with a compensatory cash payment to the vendor.

17. The wife says this transaction was of advantage to the parties because it enabled Ms J to buy a house and enabled the parties to sell the Property D property without incurring agent’s fees and expenditure on improvements for sale.

18. The husband has not taken any steps to recover the money advanced to Ms J from the joint funds.  In his trial affidavit the husband characterised the advance to Ms J as a loan.  I accept that characterisation.  If it is a loan, I consider that the fairest way to treat the money is as a loan to Ms J constituting a joint asset of the parties, to the extent of $15,000 each.  I do not accept that it should simply be ascribed to the wife as the husband submitted because (a) it was an advance to the parties’ daughter and (b) it enabled the parties to sell the Property D property without expenditure on agent’s fees and probably avoided some other sale-related expenditure.

19. After separation the Property B property was subdivided and sold.  The proceeds were divided pursuant to the consent order of this Court on 12 April 2016, with $60,000 paid to the husband and $500,000 paid to the wife.  The husband was reimbursed for the subdivision costs which he incurred in the sum of almost $50,000.  The wife submitted at trial that the husband should have been entitled to reimbursement of only 50 per cent of those costs.  The basis of this submission was not explained.  The principle behind the reimbursement to the husband of the entirety of the subdivisions costs can be illustrated by an example.  Assume a property owned jointly by party A and party B may be sold for $500,000 after subdivision costs of $50,000, that is, for a net figure of $450,000. If party A has $50,000 in cash and party B also $50,000 in cash but party A pays all of the subdivision costs then party A has zero cash.  Party A must be reimbursed the whole of the $50,000, leaving a net amount of $450,000 for distribution and placing both parties in their original position of each having $50,000 in cash.

20. In 2013 the husband received an inheritance of $117,000.  It was accepted at trial that this was lost in ill-advised futures trading.

21. There were some other issues to be resolved. 

22. I accept the husband received gifts of about $16,000 from his father during the marriage which was placed in a joint account and spent by the parties for their common benefit.

23. The husband submitted that the wife’s refusal to accept an offer of $670,000 for the former matrimonial home, which was subsequently sold for $640,000, was a negative contribution.  The wife said that the later sale, which did not involve an agent, saved commission and avoided other expenses and the end result was no worse than accepting an offer of $670,000.  There was no further evidence about this issue and I am unable to make a finding about it.

24. The parties had furniture valued but it seems that the wife later entered the dwelling at Property C and removed some contents valued at $1,120.  That figure was not challenged and I have adjusted the asset table accordingly.

25. The wife also sought a credit or adjustment of some $53,000, as far as I understand her calculation contained in exhibit A2.  Part of the document includes a claim for fuel expenses the wife said the husband agreed to pay after separation.  The claim for fuel is $7,307.  The husband denies any such agreement.  The wife was legally represented from 2012.  There was no mention of the asserted agreement at any time in correspondence.  I am not satisfied there was any such agreement.

26. Until 4 April 2014, when the joint account was closed, the wife had access to that account to pay her expenses.  She conceded that the amounts prior to that date in her claim had actually been paid from joint moneys.

27. An order was made on 21 April 2015 by this Court that the wife should forward the receipts or accounts for any joint accounts paid by her to the husband’s solicitors to obtain a 50 per cent reimbursement.  No reimbursement was sought and I am not satisfied that she should be able to raise claims now that should have been made under those orders.

28. For the period 4 April 2014 to 21 April 2015, the wife’s claims are $11,978.  These are, she says, in respect of rates, insurance and outgoings in relation to matrimonial property in her name, particularly the Property E property.

29. The husband said he would agree to pay amounts of $1,418 and agree to reimburse the wife half of that amount or $709.  In addition, he sought half the reimbursement of expenses of $810 he paid after 21 April 2015.  I am not satisfied either of these claims should be permitted, arising after a specific order of the court for dealing with ongoing expenses incurred after 21 April 2015.

30. However, the claims arising before that must be addressed.  After excluding some items such as private health insurance and charges for changing locks and amounts relating to power at Property B, where the wife continued to reside after the husband left the family home, there are claims amounting to $7,700.  These expenses appear to relate to matrimonial property that neither party was residing in and I consider that an adjustment in the wife’s favour of half this amount, that is, $3,850 is merited.

31. Another issue to be addressed is the characterisation as spouse maintenance or part property settlement of the $20,000 paid to the wife pursuant to the order of 21 April 2015.  This order was made by another judge of this Court.  It was said by the wife in evidence that the husband at that time had cash deposits which were a source for a lump sum spousal maintenance order, that is, with the implicit assertion that the wife was in need of spouse maintenance and the husband had the capacity to pay.  The evidence is unclear about whether that was true in 2015.  The husband claimed that he had lost money, possibly the inheritance, and he did not have, in reality, such ready funds.  The husband gave evidence that he, in fact, borrowed the funds he paid the wife pursuant to the order of 21 April 2015 from his family to satisfy the order.  That was not challenged.  In the circumstances, I am not satisfied that the husband had the capacity to pay spouse maintenance at that time.  I propose to characterise the money as a part property settlement.

Contributions

1. On the wife’s case contributions were equal except for her compensation monies, amounting to about $140,000 in total.  The husband says the amount of the contribution of compensation monies was closer to $105,000.  He agrees the wife made a $20,000 contribution to the purchase of the Property A home in 1996 and a $70,000 contribution to the Property E property in 2007.  The husband says he made his own contributions by way of the gifts from his father and the contribution of his long service leave entitlement of about $10,000 to the acquisition of (business omitted).

2. It must also be remembered that the mother’s child, Mr M, lived with the parties from the age of eight to early adulthood.  I consider that a significant contribution by the husband that, at least, equals the wife’s contribution of her compensation monies.

3. The wife’s counsel did not make a submission about the wife’s contributions expressed as a percentage but said the overall result should be 60 per cent to the wife and 40 per cent to the husband. The husband submitted that contributions were equal.

4. I find contributions were equal.

Section 75(2) Factors

1. The wife is 65 years old and, it would appear, in good health. She is a (occupation omitted) but has not worked as a (occupation omitted) for many years. She says her registration is no longer current.  That was not challenged. The husband suggested the wife was engaged in employment. She apparently assists her son in his (omitted) business in the (omitted).  She helps him with (duties omitted) and so on.  The wife said she was not reimbursed for that.  I am satisfied that the wife has some employment capacity, although it is limited.  The wife will be eligible for an age pension in (omitted) 2018.  She is in the process of building her own home which she will own free of mortgage.  She will also receive a cash payment as a result of these proceedings.

2. The husband is 61 and apparently in good health.  He remains employed by the company (business omitted).  He says that the future for his employment, based on (business omitted), is fragile because of the increase in popularity of (business omitted).  This was not challenged.  I accept that the future of the (business omitted) business is uncertain.

3. I do not propose to make any adjustment for section 75(2) factors.

4. Both parties approached the matter as a single pool of non-superannuation and superannuation assets.  I will follow the same approach.  The result is as follows:

Assets	Husband	Wife	Total
1	Interim property settlement paid from proceeds of sale of former matrimonial home	$76,995	$76,995
2	Payment to wife pursuant to order 21.4.15	$20,000
3	Proceeds of joint bank account previously distributed	$16,547	$21,226
4	Funds paid by wife to Ms J	$15,000	$15,000
5	Interim property settlement pursuant to order 12.4.16	$60,000	$500,000
6	Proceeds of sale of shares, accrued dividends and interest divided between parties	$8,572	$8,572
7	Proceeds of sale Property F1 & F2, Property B and Property E $151,226 (held on trust jointly (omitted) Conveyancers Trust Account)	$75,613	$75,613
8	Property C transferred to husband pursuant to order 12.4.16	$440,000
9	Timeshare, (omitted) – no value
10	(business omitted) – no value
11	(business omitted) plant and equipment	$240,000
12	Ford (omitted) van	$8,000
13	(omitted) speed boat	$7,500
14	Jet ski	$2,250
15	Ford (omitted)	$2,250
16	Silver bullion	$2,100
17	Furniture and contents (a)   Husband (b)  Wife (c)  Property C	$2,930    $2,870	$3,770
$960,627	$721,176	$1,681,803
Superannuation
18	Husband's Super (omitted)	$130,012
19	Wife’s Wealth Super	$113,014
20	Wife's (omitted) Super	$9,361
$130,012	$122,375	$252,387
$1,090,639	$843,551	$1,934,190
Less payment to wife	($123,544)
Plus payment to wife	$123,544
$967,095	$967,095	$1,934,190

1. As can be seen, the equal division of the assets requires the transfer to the wife of $123,544.  If the husband’s interest of $75,613 in the (omitted) Conveyancers Trust account funds (taking into account the wife’s own interest in an equal amount) is transferred to the wife this requires an additional payment of $47,931 to make a total $123,544. In addition there is to be a payment to the wife of $3,850 (see paragraph 30), a total payment to the wife, in addition to the transfer of the husband’s interest in the (omitted) Conveyancers Trust account, of $51,781 ($47,931 plus $3,850). I will make orders accordingly.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Young

Date:         24 November 2017