STELLARD & DRESDON-STELLARD - [2011] FamCA 718

FAMILY COURT OF AUSTRALIA

STELLARD & DRESDON-STELLARD

[2011] FamCA 718

FAMILY LAW – PROPERTY – Contribution – Treatment of gifts by wife’s parents before and during the marriage and wife’s inheritance late in the marriage – Amount inherited spent partly during the last phase of the marriage and in the post separation period – Amount inherited treated as separate pool to which husband did not make significant contribution – To the extent that he contributed to that pool already he has shared in/benefited from the inheritance during the last phase of the marriage – Kennon factor claimed by husband – Kennon factor not made out – Division of property 60% wife and 40% husband in relation to main pool based on contribution – Section 75(2) adjustment in relation to main pool in wife’s favour of 5% having regard to husband’s present ability to conduct ongoing business and wife’s inability realistically to rejoin the workforce and other factors – Kowaliw argument put by husband – Kowaliw argument rejected because assets dissipated by wife either added back to main pool or comprised part of separate pool to which husband did not make significant contribution – Overall division in relation to main pool 65% wife and 35% husband– Observations made that husband and or wife may need to sell real property having regard to individual and joint debts

Family Law Act 1975 (Cth) s79, s 75(2)

Antmann & Antmann (1980) FLC 90-908
Bonnici & Bonnici (1992) FLC 92-272
Chang v Su (2002) FLC 93-117
Coghlan & Coghlan (2005) FLC 93-220
Farmer and Bramley (2000) FLC 93-060
Figgins and Figgins (2002) FLC 93-122
Gosper and Gosper (1987) FLC 91-818
Kennon & Kennon (1997) FLC 92-757
Kessey and Kessey (1994) FLC 92-495
Kowaliw & Kowaliw (1981) FLC 91-092
Lorriman and Lorriman (unreported) Appeal No EA47 of 2004, 5 November 2004
Norbis & Norbis (1986) 161 CLR 513
Pellegrino and Pellegrino (1997) FLC 92-789
Phillips and Phillips (2002) FLC 93-104
Pierce and Pierce (1999) FLC 92-844
Polonius & York [2010] FamCAFC 228
Spagnardi and Spagnardi (unreported) Appeal No EA26 of 2003, 8 September 2003
Smith & Smith (1991) FLC 92-261
Weir & Weir (1993) FLC 92-338
Zyk & Zyk (1995) FLC 92-644 at 82,509-510.

APPLICANT:

Mr Stellard

RESPONDENT:

Ms Dresdon-Stellard by her Case Guardian Peter Sheehy

FILE NUMBER:

BRC

5986

2008

DATE DELIVERED:

9 September 2011

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

O'Reilly J

HEARING DATE:

27, 28 and 29 April 2011

(Written submissions concluded 26 May 2011)

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Selfridge

SOLICITOR FOR THE APPLICANT:

Reardon Family Lawyers

COUNSEL FOR THE RESPONDENT:

Mr James

SOLICITOR FOR THE RESPONDENT:

Buchanan Legal

Order

IT IS ORDERED

Pursuant to s 79 of the Family Law Act 1975 (Cth) the property and assets of the parties or either of them be divided in accordance with the following so as to provide 35% to the husband and 65% to the wife in relation to the matters dealt with in this order:

The husband have:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading STELLARD & DRESDON-STELLARD

Details

AGLC: STELLARD & DRESDON-STELLARD [2011] FamCA 718
Case: [2011] FamCA 718
Decision Date: 9 September 2011

CaseChat Overview and Summary

The parties to this proceeding were the wife, Stellard, and the husband, Dresdon-Stellard. The dispute concerned the division of their property following their separation. The matter came before O'Reilly J in the Family Court of Australia.

The court was required to determine the appropriate division of the parties' assets, considering various factors including contributions made by each party, the treatment of gifts and inheritances received by the wife from her parents, and whether any adjustments should be made under section 75(2) of the Family Law Act 1975 (Cth). The court also had to consider arguments raised by the husband regarding the dissipation of assets and the impact of the wife's conduct on the husband's mental health and business.

O'Reilly J applied established principles regarding the treatment of gifts and inheritances in property settlement proceedings. The court noted that gifts from a spouse's family are generally treated as contributions by that spouse, unless there is evidence that the donor intended to benefit both parties, in which case they may be treated as an equal contribution. In this case, the wife's inheritance, which was partly spent during the marriage and partly post-separation, was treated as a separate pool to which the husband had not made significant contributions. The court rejected the husband's argument that assets were dissipated by the wife in a manner that warranted their addition back to the main pool, finding that any dissipated assets were either part of the main pool or the separate pool. The court also considered the husband's claim of "abuse" by the wife, noting evidence of the wife's aggressive behaviour both during and after the marriage, and its impact on the husband's mental health and business.

Ultimately, the court ordered a division of the main pool of assets of 65% to the wife and 35% to the husband, reflecting contributions and adjustments under section 75(2) in the wife's favour. The court also made observations regarding the potential need for the parties to sell real property to address individual and joint debts.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

In Pellegrino and Pellegrino (1997) FLC 92-789, Chisholm J at 84,727 referred to the difficulty in applying “the qualifying paragraph” in Gosper (the par commencing “In other cases …” set out above):My task is to apply the law as formulated in the decisions to which I have referred. The critical question, I think, is whether this case falls within the following paragraph of Fogarty J’s judgment, already quoted:-“In other cases the evidence, including evidence that the donor intended to benefit both spouses, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.”For convenience, in the following discussion I will refer to this paragraph as “the qualifying paragraph”. The issue is, when does this qualifying paragraph apply? In what sort of circumstances does the evidence not justify the conclusion that the contribution was made on behalf of the spouse? This is an important issue, because parents often provide financial assistance to their married children. Often, perhaps usually, they do this in a way that benefits their child and their son or daughter in law. Often there is no specific evidence of their intention at the time. I think I can take judicial notice of the fact that frequently parents make such provision in a way that does not involve them formulating or specifically considering whether they intend to benefit their own child or both parties. They are happy to benefit both parties. The gift, as vividly illustrated by the provision of a home in this case, might inherently benefit both. Also, they will realise that their own child’s happiness is bound up with that of their son or daughter in law, so that benefiting one will benefit the other indirectly. They may also have in mind other benefits associated with an extended family, being involved with grandchildren, and enriching the complex web of obligations and attachments that characterise extended families.and then at 84,728 said:I return to the question whether this case falls within that I have called the “qualifying paragraph” of the judgment by Fogarty J in Gosper, quoted earlier. My reading of the authorities is that in such cases it is normally appropriate to treat the provision as a contribution made by or on behalf of the spouse whose parents made it. I am not sure precisely what cases fall within the qualifying paragraph. An example might be, perhaps, where the parents’ gift is in recognition for some service made to them jointly by the parties. …(emphasis added) In Lorriman and Lorriman (unreported) Appeal No EA47 of 2004, 5 November 2004, the Full Court said at par 31:The correct approach to gifts coming from the family of one of the parties appears to be settled in law. In Gosper and Gosper (1987) FLC 91-818 Fogarty J concluded that such an advance ought generally be treated as being a contribution made by or on behalf of the party from whose family it came. His Honour added a rider that if there was evidence that the donor intended to benefit both spouses, such a conclusion may not be justified. In such circumstances the court may determine that it should be treated as an equal contribution by both parties to the marriage. See also Balnaves v Balnaves (1988) FLC 91-952; 12 Fam LR 488, and Kessey and Kessey (1994) FLC 92-495; 18 Fam LR 149. In Pellegrino v Pellegrino (1997) FLC 92-789; 22 Fam LR 474, Chisholm J when considering Gosper spoke of the qualification to the general proposition expounded by Fogarty J as “the qualifying paragraph. …(original italics, emphasis added)

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In other evidence, the husband detailed allegations of verbal and other harassment of him by the wife post separation describing it as “irrational and denigrating”, which has adversely affected the business. He describes “several unannounced and provocative” visits from the wife and H to the business premises, and his rented premises, and several anonymous threatening telephone calls including death threats and calls saying things like “All your money is going to be gone. All your money honey, you’ll be broke. You won’t have one cent left, you bastard”, and attendances by the wife at the business harassing staff saying things like “This is half my business. Look here, I have the rate notice”, saying to the husband “I haven’t finished with you. I’m going to kill you”, and variously either at the business or in telephone calls “You are going to lose your business, it’s going to be shut down”, the wife at the time being “out of control” and “screaming her lungs out”. Other examples include “It’s all going to happen. I’m going to bury you. Ha Ha Ha”, and other examples too numerous to reproduce in this judgment. Earlier in his affidavit (pars 5–7), the husband said that during the marriage and particularly after her father’s death the wife “would become quite angry on occasions and would attempt or succeed in physically harming me or damaging my property”, giving examples, in the 2 years leading up to separation, of numerous occasions punching him in the back saying “Oh no, he’s home, it’s not him, is it? Why can’t you go back to work?”, then throughout the marriage generally “for years prior to separation” threatening divorce “as soon as [H] left school”, insisting that he do the washing and/or ironing because she would not do it, saying to him many times “Why don’t you go and put a gun to your head and blow your brains out”, being critical of almost everything he did, not leaving him alone to enjoy his hobbies, throwing things at him, on at least 20 occasions during the last 10 years of the marriage, throwing cups of hot coffee and wine glasses at him, smashing an oven door by “slamming it about 30 times until it exploded”, in relation to H holding her sport dresses over the swimming pool and threatening to drop them in if H “didn’t co-operate”, in September 2007 (the month before separation) attending at the business premises and yelling at him then slapping him in the face and on 2 occasions during the marriage damaging a mudguard to his vehicle and kicking a mudguard on his vehicle, each costing about $200 to repair. Mr Selfridge submitted that the husband’s evidence shows that he has suffered “abuse” by the wife both during and after the marriage and this has had “impact on him mentally” and on his business both during the marriage and post separation because of the wife’s “continued aggression and abuse”. As to the allegations that the abuse has had “impact on him mentally”, Mr Selfridge relied (written submissions, par 25, footnote 11) only upon:· an alleged admission in Mr James’s written submissions: “It has never been in contention and is conceded by the wife at par 103 of her Counsel’s written submissions that the husband has suffered from mental health issues associated with these proceedings” and· exhibit MHS49 to the husband’s affidavit being the report by Dr L dated 22 May 2009 (earlier referred to) “which outlines the husband’s mental health diagnosis and associated factors” and which Mr Selfridge contended “remains as uncontested evidence before the Court”, the relevant part of the report relied upon being at p 5:From the history and mental state examination, it appears [the husband] is suffering from an Adjustment Disorder with mixed emotions (anxiety/depression). The stressors that have perpetuated this appear to be the behaviours of his ex-wife [Ms Dresdon-Stellard], not only in their marriage in which he has described her malicious and vindictive behaviour, but after their separation, in which she has attempted to discredit financially and personally. It also appears she has been instrumental in turning their daughter against him especially since [the husband] started a new relationship with another woman.