SPROULE & SPROULE
[2006] FMCAfam 360
•13 July 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SPROULE & SPROULE | [2006] FMCAfam 360 |
| FAMILY LAW – Property – consent to 44(3) application– twenty years elapsed since date of divorce – twenty seven years since date of separation – small asset pool – 75(2) factors in favour of wife. |
| Family Law Act 1975 |
| Aleksovski & Aleksovski (1996) FLC 92-705 In the Marriage of Clauson (1995) FLC 92-595 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Lee Steere (1985) FLC 91-626 Jacobson and Jacobson (1989) FLC 92-003 Robb and Robb (1995) FLC 92-555 Sippel & Sippel [2004] FamCA 201 Williams v Williams (1985) 10 Fam LR 355 |
| Applicant: | LYNETTE MAY SPROULE |
| Respondent: | ALLEN JAMES SPROULE |
| File Number: | SYM 3084 of 2006 |
| Judgment of: | Sexton FM |
| Hearing date: | 1 June 2006 |
| Delivered at: | Sydney |
| Date of Last Submission: | 2 June 2006 |
| Delivered on: | 13 July 2006 |
REPRESENTATION
| Counsel for the Applicant: | Ms P Nash |
| Solicitors for the Applicant: | Haille Paine Solicitor |
| Counsel for the Respondent: | Mr D Dura |
| Solicitors for the Respondent: | Fishburn Watson O’Brien |
THE COURT ORDERS BY CONSENT:
That pursuant to s.44(3) of the Family Law Act 1975, leave be granted to the applicant wife to institute proceedings out of time.
THE COURT FURTHER ORDERS:
That within 3 calendar months of the date of these orders [“the settlement date”] the husband pay to the wife by way of property settlement the sum of $234,500.00 less any amount payable by the wife as at the settlement date in accordance with order (4) .
That simultaneously with the husband’s compliance with Order (2) herein the wife vacate the Bowral home and do all acts and things and execute all documents necessary to transfer to the husband the whole of her right title and interest in the former matrimonial home situated at and known as 29 Park Road, Bowral, being the land described in Lot 1 in DP 181224 in the State of New South Wales [“the Bowral home”] and thereafter the husband indemnify and keep indemnified the wife in relation to all outgoings on the Bowral home.
That from the date of order until the settlement date or the date of settlement of the sale, whichever is applicable:
(a)The wife have exclusive occupation of the Bowral home and the wife meet all outgoings in relation to the home including but not limited to council rates, water rates and utilities as and when they fall due; and
(b)Each party be restrained from encumbering his or her interest in the Bowral home without the prior written consent of the other party.
In the event the husband fails to comply with Order (2) herein by the settlement date, the husband and the wife shall forthwith do all things necessary to effect a sale of the Bowral home by private treaty at a price agreed between the parties and failing agreement the price to be determined by the President of the Australian Property Institute of New South Wales or his nominee.
In the event the parties fail to agree on a real estate agent to sell the Bowral home by a date no later than 21 days of Order (5) becoming operative, the President of the Real Estate Institute of New South Wales appoint a real estate agent and the parties to share equally the costs of the appointment.
Upon completion of the sale the proceeds be distributed in the following order and priority:
(a)In payment of all legal costs, commissions, and agent expenses (including advertising expenses) in relation to the sale;
(b)In adjustment of rates and other outgoings in accordance with usual conveyancing practice;
(c)In discharge of the loan secured by way of mortgage (if any) registered on the title of the home;
(d)In payment to the wife in the sum of 67% of the balance then remaining in addition to interest on $234,500.00 payable at the rate applicable from time to time in accordance with the Family Law Rules, accrued from the settlement date referred to in Order (2) herein, but less any amount payable by the wife in accordance with Order (4);
(e)In payment to the husband of the balance.
In the event the home has not been sold by or before a date three (3) months from the date Order (5) becomes operative then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and pay all monies equally, necessary to procure a sale by public auction of the Bowral home upon the following terms:
(a)The auctioneer shall be a real estate agent;
(b)The reserve price shall, unless agreed between the parties, be as proposed by the auctioneer;
(c)Upon completion of the sale the proceeds shall be distributed in accordance with Order (7) herein.
That except as otherwise provided herein, the husband and the wife each be entitled to all items of personalty including but not limited to proceeds of bank accounts, superannuation entitlements, money and personal effects presently in their respective possession and control.
That except as otherwise provided herein, the husband and the wife remain liable for any debts in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Court at its Sydney Registry be appointed pursuant to section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
Liberty be granted to each party to re-list the matter on 7 days notice in relation to the implementation of these Orders.
All exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM 3084 of 2006
| LYNETTE MAY SPROULE |
Applicant
And
| ALLEN JAMES SPROULE |
Respondent
REASONS FOR JUDGMENT
Introduction
This case concerns property adjustment. After a marriage of nearly 6 years, the parties separated in December 1979 when the husband left the matrimonial home in Bowral and moved to rental accommodation. The parties divorced on 22 May 1986. The wife started these proceedings nearly 20 years out of time by application filed 23 January 2006. At hearing, the husband did not oppose the wife’s application for leave to proceed out of time.
The wife, now 61, has remained living in the Bowral home since the parties’ separation. She has health problems and lives alone. She is supported by the disability support pension and interest payments on the funds remaining from an inheritance she received in 2002. The husband, now 55, lives at Corindi Beach near Coffs Harbour with his wife Susan, 60 years, with whom he has lived since 1986. The husband and his present wife each earn a small income from their retail sales business at Corindi Beach.
When the parties started living together, the wife’s two children from a previous relationship, aged 10 and 9, also lived with the parties. The parties then had two children of their own, Leanne now 30 and Sally who died shortly before the hearing aged 28 years. When the parties separated Leanne and Sally were only 4 and 2 years of age; the wife’s children from her first marriage were 16 and 15. At the time of separation, the parties agreed the wife would remain in the Bowral home with the children and the husband would take responsibility for the mortgage repayments. The husband says he wanted the children to remain living in the home but also recognised that if they had sold the property at that time, they would have been left with no assets and a significant debt. The husband says the parties agreed that when the children left home the parties would either sell the house or one party could buy the other out. He says in 2003 when the parties were in regular contact about their daughter Sally’s wedding, he suggested to the wife that they subdivide the Bowral property and build two homes; the wife could choose which home she wanted to live in, the other would be sold and the net proceeds divided equally between them. The husband says the wife told him at the time that she was too busy to think about it.
The wife recalls a different conversation at separation. The wife says that in response to her question as to what would happen to the Bowral home, the husband said words to this effect “don’t worry the house is yours.” She says in her affidavit “I accepted the husband at his word and we made an arrangement wherein the husband continued to pay the mortgage.” As the wife does not claim an entitlement to the whole of the Bowral home, I find it unnecessary to make a finding as to which party’s recollection is the most accurate.
The parties agree that apart from the Bowral home, they should each be entitled to the assets and liabilities they presently hold. The parties are in dispute about whether or not the Bowral home should be sold and as to each party’s percentage entitlement to its value, agreed at $350,000.00. In her application the wife asks that the home be sold and that she receive 80% of the net proceeds of sale. The wife’s counsel in final submissions asks for 72%. The husband asks that he be permitted to retain the Bowral home upon payment of $200,000.00 to wife, being 57% of the value of the home.
Issues concerning property
The approach to the determination of an application under s.79 of the Family Law Act 1975 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595) and involves consideration of these questions:
a)What were the assets, liabilities and financial resources of the parties and their values at the time of hearing?
b)What were the financial and non-financial contributions made directly or indirectly by or on behalf of each party to the acquisition, conservation or improvement of the property of the parties?
c)What was the contribution made by each party to the welfare of the family including contributions made in the capacity of homemaker or parent?
d)What is the effect, if any, of any proposed order upon the earning capacity of each party?
e)What matters referred to in sub-s.75(2) of the Act are relevant and what adjustment, if any, should be made as a result of these factors?
f)Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
g)After consideration of these matters, is it just and equitable to make the actual orders?
What were the assets, liabilities and financial resources of the parties at the time of hearing and their values?
The parties substantially agree that at the date of separation in 1979 they owned the Bowral home with a value then of approximately $26,000 and a mortgage balance of $40-43,000.00, household contents and a utility. The husband says the parties also owned a Kingswood car. The parties agree that all other assets have been acquired by the parties since their separation.
Each party deposed to the assets and liabilities held at the date of hearing. There was no substantial challenge to the statement of assets and liabilities deposed to by the husband in his Financial Statement and I accept his evidence. I find the wife’s Financial Statement was unreliable. The wife did not disclose the IAG shares she owns, nor did she provide any information about any superannuation entitlements she might hold. She did not disclose amounts owed to her by two of her daughters. The wife did not accurately disclose how she had dealt with funds she received by way of inheritance from her late mother. She did not disclose interest income she received from her investment account. Her affidavit evidence was inconsistent with her oral evidence and with her bank statements from IMB. In cross-examination the wife conceded these inaccuracies, with an apology but without satisfactory explanation. The wife deposed to receiving an inheritance of $107,439.00 when her mother died in 2002. In oral evidence the wife agreed she held two IMB accounts [Exhibit 4] the first of which was closed at the end of 2001 when the second one opened. The inheritance funds were deposited to the second IMB account, approximately $8,000 in September 2002 and approximately $99,000 in early 2003. In cross-examination, the wife corrected her affidavit evidence in relation to the way she used her inheritance funds. She could not recall how much she had given her daughter Leanne in June 2003 but her bank statement [Exhibit 4] shows that she gave Leanne $26,000.00. The wife agreed she lent her daughter Barbara $9,000 and in September 2005 lent her daughter Leanne $7,000. The wife agreed she gave Leanne a gift of $5,000 in May 2006. The wife did not disclose the amounts owed by her daughters in her Financial Statement sworn 9 May 2006. I find those amounts should be included in the list of assets presently held by the wife.
The husband’s counsel cross examined the wife in relation to deposits from 1993 into her first IMB account. He tendered statements showing deposits of $5,388 in November 1993, of $3,300 in June 1994, of $2,000 in August 1994, of $1,451 in November 1994, of $1,000 in July and October 1997, of $1200 in June 1998, of $2,400 and $1,000 in January 2000, of $1500 and $1500 in April 2000 and other deposits in excess of $1,000 and referred the wife to some of these. The wife said the source of the deposits was either her earnings or possibly Centrelink payments. She said she received wages weekly but did not bank weekly. The wife could not explain the specific entries. The wife agreed her tax returns showed she earned $22,099 in the 1996 financial year and $17,310 in the 1997 financial year and that her only income was from wages, child support and Centrelink. I agree with the husband’s counsel that the amounts deposited into the first IMB account are difficult to reconcile with the wife’s modest income and her need to meet expenses for herself and youngest children. The wife gave me the impression that she regarded assets she had acquired after separation and her financial arrangements after separation as irrelevant to the issues to be determined by the Court. While I am critical of the wife for failing to disclose her financial position carefully and as accurately as possible, as she is obliged to do in proceedings of this kind, I did not find the wife a dishonest witness.
I find that the assets and superannuation entitlements of the parties as at the date of hearing are as identified in the following table:
| Assets at the date of hearing | $ |
| Former matrimonial home at 29 Park Road, Bowral (joint) | 350,000.00 |
| IMB Investment (wife) | 39,000.00 |
| Monies owed to wife by her daughter Leanne | 7,000.00 |
| Monies owed to wife by her daughter Barbara | 9,000.00 |
| Mazda motor vehicle (wife) | 18,900.00 |
| Household items (wife) | 2,000.00 |
| IAG shares (wife) | Not known |
| Property at Corindi Beach in the names of husband and his present wife (50% share held by husband) | 140,000.00 |
| Household contents (50% held by husband) | 4,000.00 |
| Joint account St George (50% share held by husband) | 2,693.00 |
| Proceeds of CBA account (husband) | 1,414.00 |
| Husband’s retail business (50% share) | 3,000.00 |
| Husband’s caravan 1977 (50% share) | 750.00 |
| Loan secured by mortgage to St George Bank (50% share held by husband) | (35,000.00) |
| Husband’s visa account | (17,000.00) |
| TOTAL NET ASSETS | 525,757.00 |
| Wife’s Superannuation | Not known |
| Husband’s Superannuation (total in 3 funds) | 29,898.00 |
Disregarding the Bowral home, this means the wife holds assets with a value of $75,900 as well as an unknown number of AIG shares and an unknown entitlement to superannuation, while the husband holds assets with a value of $99,857 with superannuation entitlements of $29,898.
Contributions
The court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family before and after separation. The Full Court said in Aleksovski & Aleksovski (1996) FLC 92-705 (at 83,437):
It is therefore necessary…[to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties.
The court must consider the contributions in an overall sense both before and after separation. The Full Court said in Sippel & Sippel [2004] FamCA 201:
There is nothing in the Family Law Act or deriving from binding authority about the application of section 79 of that Act, that requires a separate assessment of matters occurring post separation in arriving at an assessment of contributions… addressing post-separation contributions separately may foster disproportionate weight being given to them.
In the case of Sippel, there was a relatively short period between separation and trial. In this case, given the parties were married for less than 6 years and have been separated for 27 years, I have given separate consideration to the parties’ contributions during cohabitation and after separation before assessing each party’s contribution entitlement overall. His Honour Justice Lindenmayer in Jacobson and Jacobson (1989) FLC 92-003 said at 77,175:
Whilst the parties presented the case to his Honour on the basis that he should decide how the property which existed at separation should be divided, that did not mean that his Honour was precluded from taking into account, in arriving at that decision, all of the other property of either party, and the way that that was acquired…
Financial contributions during relationship
The parties are in agreement about much of their financial history. I find the husband had a better recollection of the parties’ financial affairs than the wife and for the most part, the husband was able to corroborate his financial evidence with documentary evidence. I find the wife’s affidavit financial evidence was less reliable. However, as already noted, I did not find the wife dishonest.
The husband was a self-employed truck driver at the date of cohabitation operating a tip-trucking business known as AJ Sproule, with himself as the only employee. He says he had $5,000 in savings but no longer has bank statements to confirm this figure. After marriage, the husband changed the name of the business to AJ and LM Sproule and it became a partnership. During the marriage, the husband and wife took equal drawings from the business, the husband as the only truck driver and the wife for doing the books of the business. The husband deposed to working a minimum of 5 and a half days a week averaging a 10 hour day and to the wife working approximately half a day a week. The partnership employed an external accountant. In about 1976 or 1977 the husband deposed to changing the business to an interstate general freight truck business. The husband then worked 6-7 days a week, approximately 15 hours a day or 100-110 hours a week. The husband deposed to the wife continuing to work half a day a week doing the books and to the partnership continuing to employ an external accountant. In mid-1979 the parties sold the truck and paid out the partnership debts. The partnership was wound up. The husband then worked as a sub-contractor doing truck driving, general maintenance and handyman tasks. The husband deposed to the wife doing some catering jobs after the parties wound up the business and after separation, but to otherwise being a full time mother and homemaker.
In 1976 the parties agree they purchased the home at 29 Park Road Bowral in joint names. The wife says they borrowed the whole amount of $18,000 but does not refer to the costs of purchase. The husband deposes to purchasing the property for $23,000.00 using proceeds of the business to pay the deposit and purchase costs and the balance from a loan secured by way of mortgage to Commercial and General Acceptance Limited. I am not satisfied anything turns on this difference in the parties’ recollection of the details of the purchase. During the marriage, the parties paid the loan from their joint partnership earnings.
The parties bought and sold a vacant block of land during their relationship and used the small profit to meet usual expenses.
The parties agree that during their relationship the parties’ income from the business was used to fully support the wife’s children from her previous relationship as the wife received no financial assistance from the children’s biological father.
The parties agree that at the date of separation they owned assets with a significantly lower value than their debts.
Non-financial contributions during cohabitation
The husband deposes to constructing a colour bond double garage, renovating an old laundry and to undertaking other improvements to the parties’ Bowral home. He deposes to removing hedges, erecting fences and to installing a new wooden floor on the back verandah. He deposes to being responsible for outdoor tasks. The husband’s evidence on these issues was not substantially challenged.
Contributions as homemaker and parent during cohabitation
On the authority of Robb and Robb (1995) FLC 92-555 the wife’s contribution to the care of her children from her previous relationship cannot be taken into account as a factor in her favour. However the wife cared for the two children of the parties’ relationship. The husband did not challenge the wife’s evidence that she accepted the responsibility for caring for the children day to day and the majority responsibility for domestic tasks. The husband acknowledged he was absent from home much of the time as a result of his work as a truck driver, though says he was a hands-on father when at home, assisting with all aspects of the children’s care.
Weighing all these factors, I find the parties’ contributions during the period of cohabitation approximately equal.
Financial contributions after separation
At the time of separation, the parties agree they held a negative equity in the Bowral home. Each owned a motor vehicle of modest value. Neither had any other assets apart from household contents. The husband says he was in and out of work but continued to earn a low income from odd jobs. He obtained permanent casual work in 1986 at Kwikasair Transport and increased his earnings. The parties agree the husband paid the mortgage repayments of approximately $57 a week until 1988 and paid child support of $50 a week until late 1995 or early 1996 when their youngest child left home to start her nursing course. The husband says between 1980 and 1986 these payments amounted to 50-60% of his net income. In 1986 the husband started living with Susan, his present wife. As Susan owned a home, had some savings and was in full time employment, the husband’s financial position improved from that time. The husband says when he was unable to meet the mortgage repayments or child support he had agreed to pay the wife, his present wife made the payments for him.
The husband says he offered the wife increased child support payments from 1986 but the wife did not want the child support to affect her Centrelink benefits. He says he paid extra cash to the wife for the children’s expenses from time to time. The husband says he paid additional funds into that account for the children including $1,770 for his daughter Sally’s nursing course in January 1996. The husband says he bought a computer, took the children on holidays and bought school uniforms and shoes for the children. In 1995 the husband says he paid $8,000 for his daughter Leanne’s wedding. In 2003 he contributed $4,500 towards the cost of his daughter Sally’s wedding. The wife also contributed to the costs. These assertions of the husband were largely unchallenged by the wife.
There is no dispute that by agreement between the parties, the wife paid the mortgage payments from September 1988 until 1990 when the loan was fully repaid.
The husband and his wife Susan are living in the home they are building as owner builders and hope to complete in 2008. Although they live in it, their home is still under construction. The husband says Susan sold her property at Earlwood in 1988 receiving a net profit of approximately $100,000.00. These funds gave them the chance to buy the real estate they own today. They used the net sale proceeds of Earlwood to jointly purchase a property at Ingleburn and later purchased a second property at Ingleburn. They sold one property for a profit in 1993/4 and extended their loan on the second in 2003 to buy a vacant block of land in Corindi Beach. In November 2003 they sold the second Ingleburn home and moved to a caravan on the Corindi Beach land. They have been using the net proceeds of sale of the Ingleburn property as well as borrowings from St George Bank of $70,000 to build the home in which they are presently living, in its state of partial completion. The husband anticipates the parties may need to borrow a further $20,000 to complete the home. There was no challenge of significance to the husband’s evidence on these matters.
The husband and his wife own a retail educational toy and book stall business which they set up at local markets at Corindi Beach. They live on a combined income of approximately $360 a week and neither receives Centrelink benefits. In February 2005 the husband and his wife borrowed $50,000 from St George Bank. In his application, the husband stated he earned an income of $52,000 a year. He conceded in cross-examination this was a significant exaggeration to help him achieve the loan.
The wife deposes to working part-time in various positions after separation with a varying income. She says she otherwise relied on Centrelink benefits and the $50 a week in child support paid by the husband to support herself and the children. When the husband stopped meeting the mortgage repayments in 1988, the wife made the payments of $57.61 a week until the mortgage was discharged in 1990. She has remained living in the Bowral home. As a result of health issues, the wife ceased work in June 2005.
There was no challenge to the wife’s evidence that she has met the costs of improvements to the Bowral home in the sum of approximately $12,000 over approximately 10 years and has paid the council rates of $888.00 a year.
In 2002/3 the wife received an inheritance from her mother’s estate of $107,440.00. She says she invested the funds and relies in part on the income from that investment to support herself. In cross-examination the wife conceded her affidavit evidence about her use of her inheritance funds was not accurate. It emerged that with the inheritance, the wife has given over $30,000 to her daughter Leanne, lent approximately $7,000 to Leanne and $9,000 to her daughter Barbara, bought a car, purchased furniture and whitegoods and paid $7,000 towards the costs of her daughter Sally’s wedding. At the time of hearing, the wife deposed to having approximately $39,000 of her inheritance remaining in her IMB account.
Non-financial contributions after separation
After separation, the husband says he mowed the lawns at the Bowral home each fortnight and attended to maintenance tasks around the home but does not say for how long he attended to those tasks. The wife says she maintained the home including the gardens, mowing lawns, cleaning and carrying out repairs to the home. She has done this for 27 years.
Contributions as homemaker and parent after separation
The wife continued to care for the children after separation until they left home. I am satisfied the wife has had only minor assistance from the husband in relation to these duties and although, with an exception of one 9 month period in 1988, the children had contact with the husband after separation on a reasonably regular basis, the wife had day to day responsibility for them and for all the tasks associated with caring for them day to day. I find the wife’s contributions as homemaker and parent were significantly greater than those of the husband.
The High Court in Williams v Williams (1985) 10 Fam LR 355 held the contribution made by a wife to the welfare of the family, by caring for the children, after cohabitation ceased is a factor within s.79(4)(c) of the Family Law Act 1975. When the husband married his second wife, the parties’ biological children were 11 and 9 years old. I am satisfied the wife has, in caring for the children in the years following, made an indirect contribution to the husband’s accumulation of his post-separation assets.
I am satisfied that during their 6 year relationship and since separation, the wife made the greater non-financial contributions to the marriage as a result of her contribution to the welfare of the children and to her greater contribution to the maintenance of the Bowral home after separation.
The husband’s counsel submits the husband is entitled to no less than 50% of the value of the Bowral home on the basis of his contributions during cohabitation and since separation. Counsel submits that the husband made significant post-separation contributions to his and his wife’s children from a previous relationship. He paid the mortgage for 9 years until 1988 and child support until 1995/6. He had regular contact with his children and paid for a number of their additional expenses beyond the child support he paid. Counsel submits that had the husband finalised a property settlement at the time of separation, the parties would have been left with only debt and the wife would not have had a home. Instead, the husband’s actions enabled the children to remain in the Bowral home until they were independent. The wife has had the benefit of the Bowral home for the last 10 years without the children, rent-free.
The wife’s counsel submits the wife’s contribution based entitlement to the Bowral home is 60%, given that the parties split their income during cohabitation, the wife paid the mortgage from 1988-1990, the wife paid nearly $12,000 in improvements to the property and the wife made the significantly greater non-financial contributions. Weighing the relevant factors I have referred to, I accept the wife’s counsel’s submissions that the wife’s contribution based entitlements are greater than those of the husband. I assess them at 57%.
Superannuation
Neither party seeks a splitting order. The husband deposes to holding a total of $29,898 in 3 different superannuation funds, which he has acquired from 1998, nearly 20 years after separation. The wife provided no evidence as to her superannuation entitlements but anticipates any amount she holds would be modest given her limited part-time earnings. Any amount she has accumulated has been acquired after separation. On balance, I find the wife’s entitlements to superannuation would be less than those of the husband. I find no reason to make an adjustment in relation to the parties’ contribution based entitlement as a result of superannuation.
What is the effect, if any, of any proposed order upon the earning capacity of each party?
The property orders that I propose making in this matter will not affect the earning capacity of either party.
In assessing their respective contributions overall, I find the assets of the parties should be apportioned 57% to the wife and 43% to the husband.
What matters referred to in sub-section 75(2) of the Act are relevant?
I have considered each of the relevant factors listed in s.75(2) of the Act. The husband is 55. The husband’s present wife Susan is aged 60. The husband deposes to both of them enjoying good health. The husband and his wife earn $180.00 a week from the jointly owned business they operate. He says he has no current trade qualifications, though was once a mechanic. He is presently constructing a home as an owner builder. He says he has been a handyman and a mechanic and was able to undertake renovations on the Bowral home. I am satisfied the husband has useful skills and that he is likely to have a capacity for at least casual employment well into the future. I accept the husband’s evidence that given his present wife’s age she is likely to have difficulty obtaining employment.
The wife is 61. She deposes to suffering significant health problems. She annexes to her affidavit letters from her treating general practitioner and consultant rheumatologist which confirm that the wife has Raynaud’s disease and has more recently been diagnosed with Scleroderma. She suffers generalised joint pains and circulation problems in her hands and feet and painful ulcers on her toes. She also has hypertension and sun damage on her lip. Her general practitioner, Dr Pinkstone says in March 2006:
“it will be increasingly difficult for Mrs Sproule to continue her employment.”
I accept the wife’s unchallenged medical evidence and take into account that she has not been in the paid workforce since mid-2005. I find the wife has poor employment prospects and in all probability will be dependent on income support. Although she presently enjoys some income from her invested inheritance funds, it is likely she will need to draw on those funds from time to time to meet capital and other significant expenses. Earlier in her life the wife compromised her work arrangements to accommodate her children’s needs. She was left with very young children when the parties separated. She has only worked in part-time employment for modest wages. She is 6 years older than the husband. I find the husband has a higher earning capacity than the wife and as a result have made a significant adjustment in favour of the wife. The Full Court in Clauson(1995) FLC 92-595 said:
It has long been recognised that in most cases the most valuable ‘asset’ which a party can take out of the marriage is a substantial, reliable income earning capacity.
Neither party has dependent children.
The husband has contributed to the welfare of the wife’s two children from a previous relationship during cohabitation and after separation in meeting the mortgage payments on the home in which they lived, which is a factor I find warrants a minor adjustment in the husband’s favour pursuant to s.75(2)(o): See Robb and Robb (1995) FLC 92-555.
Apart from her share in the Bowral home, the wife has assets with a value of $75,900.00. The wife has chosen to give over $30,000 of her inheritance funds to her daughter Leanne. Had she not done so, the wife would have assets with a value of approximately $106,000.00. However, I find it likely the value of the wife’s assets will decrease as she draws on her invested funds for living.
The husband says he will not receive an inheritance. However, apart from his interest in the Bowral home, the husband owns a property at Corindi Beach, and other assets with a value of approximately $99,857.00. The value of his assets is likely to increase when his home is completed in 2008. The husband also has superannuation funds of approximately $29,000.00. His present wife has assets of a similar value to the husband.
The husband’s counsel submits that the wife should be entitled to no more than 7% by way of adjustment for s.75(2) factors. The wife’s counsel submits that the wife is entitled to a 12% adjustment in her favour.
In assessing the s.75(2) factors, I find the wife is entitled to an adjustment in her favour of a further 10% of the value of the Bowral home. The wife will therefore receive 67% overall of the value of the Bowral home. On the figures before me, this will mean the wife receives 59% of the total identified net assets of the parties as at the date of hearing.
Is the result just and equitable?
Section 79(2) provides that:
The Court shall not make an Order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
This is an unusual case. The parties were married for less than 6 years. They have been separated for 27 years. At separation they had more debt than assets. The Bowral home then had a value of approximately $26,000 which has increased to $350,000.00. The wife has had the benefit of living in the Bowral home for the last 27 years, the last 10 years without children and rent-free. However, the wife has maintained the Bowral home in that period. Neither party has directly contributed to the acquisition of the assets acquired by each party since separation. The husband has remarried and is in a stronger financial position than the wife. The wife has poor employment prospects. The husband is in good health and the wife in poor health. The wife at 61 will now, even on her own application, be required to leave her home of over 30 years and either purchase or rent alternative accommodation. She gave no evidence as to her future plans.
If the husband retains the home, neither party will bear any costs of sale. There is no evidence before me as to whether or not the husband can borrow the necessary funds to purchase the wife’s interest in the Bowral home. I have given him 3 months to obtain the necessary finance, otherwise the home will be sold.
I am satisfied that in all the circumstances, the orders I have made are just and equitable.
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 13 July 2006
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