Sullivan and Sullivan
[2010] FMCAfam 91
•16 February 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SULLIVAN & SULLIVAN | [2010] FMCAfam 91 |
| FAMILY LAW – Property – contributions – section 75(2) and related factors – gifts – allegations of improper financial conduct – dispute as to date of separation. |
| Family Law Act 1975, ss.49(2), 75(2), 79(1), 79(2), 79(4) |
| In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143 In the Marriage of Kessey (1994) 18 Fam LR 149; (1994) FLC 92-495 In the Marriage of Pavey (1976) 1 Fam LR 11,358; (1976) FLC 90-051 In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844 Young, L. & Monahan, G. (2009) Family Law in Australia (7th edition), Chatswood, New South Wales: LexisNexis Butterworths |
| Applicant: | MR SULLIVAN |
| Respondent: | MS SULLIVAN |
| File Number: | MLC 11448 of 2008 |
| Judgment of: | Monahan FM |
| Hearing date: | 22 July 2009 |
| Date of Last Submission: | 6 October 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 16 February 2010 |
REPRESENTATION
| Counsel for the Applicant: | Ms Stoikovska |
| Solicitors for the Applicant: | Pearsons Barristers & Solictors |
| Counsel for the Respondent: | Mr P. Testart |
| Solicitors for the Respondent: | Mcnab Mcnab & Starke |
ORDERS
That subject to any agreement between the parties to the contrary, the parties do all acts and execute all documents necessary to forthwith list for sale by private treaty the former matrimonial home situate and known as Property D in the State of Victoria (“the former matrimonial home”) at a reserve price agreed between the parties or failing agreement within thirty (30) days at a price fixed by the president for the time being of the Real Estate Institute of Victoria and upon sale to distribute the proceeds of sale as follows:
(a)In payment of real estate agents’ commission on the sale;
(b)In payment of proper legal costs and disbursements of and incidental to the sale; and
(c)In payment of the balance remaining to the wife 50% and to the husband 50%.
That in the event that contracts of sale of the former matrimonial home by private treaty have not been exchanged within six (6) months after the former matrimonial home is listed for sale or within such further time that the parties may agree in writing, then the parties shall forthwith upon expiration of the said period of six (6) months do all such things and execute all such deeds, documents and instruments as may be necessary to nominate one person each who consents to be a trustee for sale (“the real property trustees”) and the real property trustees shall be appointed trustees for sale by auction of the former matrimonial home upon the following terms and conditions:
(a)The auctioneer shall be agreed by the real property trustees and failing an agreement as nominated by the president for the time being of the Real Estate Institute of Victoria or his or her nominee;
(b)The reserve price shall be agreed by the real property trustees and failing an agreement as nominated by the auctioneer;
(c)The auction shall take place forty-two (42) days after the expiration of the said period of six (6) months from the date the property is listed for sale or as soon after as it is reasonably practicable or at such later time as may be agreed between the parties;
(d)The real property trustees shall attend the auction and in the event that the property is not sold at auction shall negotiate with the highest bidder;
(e)Any advertising expenses/fees and other expenses payable prior to the auction shall be paid by the husband who shall be reimbursed upon settlement of the sale;
(f)That either party have the right on their own behalf:
(i)To bid at the auction on an unrestricted basis; and
(ii)To not be required to pay a deposit;
(g)In the event that the former matrimonial home is not sold at auction or by private treaty within fourteen (14) days after the date of the auction then the former matrimonial home shall be reoffered for sale by auction forty-two (42) days later on one further occasion upon the same terms and conditions as set out herein with the exception of (b) herein and on that day the property shall be sold to the highest bidder;
(h)In the event that the former matrimonial home is sold at auction then the real property trustees shall distribute the proceeds for sale as follows:
(i)In payment of auctioneers’ commission, expenses and advertising fees;
(ii)In payment of all proper legal costs and disbursements of and incidental to the sale; and
(iii)In payment of the balance remaining to the wife 50% and to the husband 50%.
That pending completion of the sale or auction sale of the former matrimonial home pursuant to paragraphs 1-2 herein:
(a)The parties each have the right to occupy the former matrimonial home;
(b)the parties are to equally pay all rates, taxes and outgoings of the former matrimonial home as they fall due (including any arrears);
(c)The parties hold their respective interests in the former matrimonial home upon trust pursuant to these orders; and
(d)Neither party encumber the former matrimonial home without the consent in writing of the other party.
In relation to paragraphs 1 and 2 herein, in the event that the parties or the real property trustees if applicable cannot agree on the identity of the real estate agent and/or auctioneer to conduct the aforesaid sale and/or auction sale, the real estate agent and/or auctioneer will be as nominated by the president of the Real Estate Institute of Victoria.
In relation to paragraphs 1 and 2 herein, in the event that the parties or the real property trustees if applicable cannot agree on the identity of the lawyer or conveyancer to conduct the aforesaid sale and/or auction sale, the lawyer or conveyancer will be as nominated by the president of the Law Institute of Victoria.
Within one month from the date of these orders the husband shall pay to the wife the sum of $30,156.50 and sign any such documents as reasonably requested by the wife, at her expense, to transfer to the wife all his interest in the AMP Flexible Lifetime Investment.
The parties retain all their respective interest and entitlements in their respective superannuation funds.
All items of personal property, furniture, furnishings and effects (excluding the piano) contained in the former matrimonial home shall be divided between the parties by agreement or failing agreement within one month of the date of the making of this order in the following manner:
(a)the husband, within two months of the making of this order, do all acts and things necessary to prepare two lists of the furniture, and the furniture contained in each list be approximate in total value to that contained on the other list;
(b) the wife select one (only) of the said lists within seven days of receipt thereof, and in default, the husband shall select one (only) of the lists for the wife, and thereafter the wife be solely entitled to the items contained in the list she selected or has been allocated, and the husband shall be solely entitled to the items contained in the other list, such selection or allocation to be specified in writing;
(c)the parties shall make available for collection by the other or any persons either nominate in writing, all of those items contained in whichever of the said two lists that other party has chosen or been allocated at any reasonable time requested by the other party, and that pending collection of the items, the parties shall properly maintain such items.
That the husband indemnify the wife with respect to all debts and liabilities in the husband’s sole name.
That the wife indemnify the husband with respect to all debts and liabilities in the wife’s sole name.
Except as is otherwise provided in these Orders:
(a)each party is solely entitled to any real property, motor vehicle, shares, monies standing to his or her credit in any bank or financial institution or due and payable by any third party, chattels, furniture, superannuation entitlements and items of personalty (including choses-in-action) in their respective ownership and/or possession as at the date of these orders;
(b)insurance policies remain the sole property of the owner/beneficiary named thereon/in; and
(c)each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
The husband pay the costs of the two subpoenaed persons, MS M and MR S, fixed in the sum of $700.00 within thirty (30) days of the date of these Orders.
All extant applications be otherwise dismissed.
AND THE COURT NOTES THAT:
A. The parties have agreed that the CBA term deposit will be divided into three equal divisions of $10,000 with each party and their daughter [X] born [in] 1989 receiving a one-third division.
IT IS NOTED that publication of this judgment under the pseudonym Sullivan & Sullivan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 11448 of 2008
| MR SULLIVAN |
Applicant
And
| MS SULLIVAN |
Respondent
REASONS FOR JUDGMENT
As Corrected
Introduction
Following the breakdown of their marriage MR SULLIVAN (“the husband”) and MS SULLIVAN (“the wife”) are in dispute in relation to the division of their matrimonial property.
In his Outline of Case document filed 22 July 2009, the husband proposes orders that:
·the former matrimonial home be sold and following payment of costs associated with the sale and the discharge of the mortgage, the proceeds be divided 60% to the husband and 40% to the wife;
·the wife pay the husband such further sums by way of financial adjustment as determined by the Court;
·the joint Commonwealth Bank (“CBA”) term deposit, the furniture, furnishings and household contents be divided equally between the parties; and
·the parties retain their respective motor vehicles, superannuation, shares and funds in their bank accounts.
In her Outline of Case document filed 20 July 2009 (which restates the orders sought in her initial Response filed 11 February 2009) the wife proposes orders that:
·the non superannuation assets of the parties be divided 57.5% to the wife and 42.5% to the husband (with the wife to have the option of acquiring the husband’s interest in the former matrimonial home); and
·a superannuation splitting order be made in her favour with respect to the husband’s superannuation entitlements.
The matter came before me initially on 28 January 2009 and on that occasion various procedural orders were made by consent, including an order listing the matter for final hearing and an order for a conciliation conference. Unfortunately, the parties were unable to resolve their dispute at the subsequent conciliation conference.
The matter returned before me in Chambers on 23 April 2009 where the final hearing date was vacated by consent and a new one day hearing date was provided.
The matter came before me again on 7 July 2009 where a dispute arose in respect of subpoenas issued by the wife against the husband’s sister (Ms M) and the husband’s father (Mr S). On that occasion Mr Berger appeared for the two subpoenaed persons and following argument I made orders that the costs of the two subpoenaed persons be fixed in the sum of $700 but be otherwise reserved (i.e. in relation to who should pay those costs).
The final hearing of the matter commenced before me on 22 July 2009 (and continued part heard on 6 October 2009).
Both parties were legally represented by Counsel at the final hearing; the husband by Ms Stoikovska and the wife by Mr P. Testart.
Background
The applicant husband was born [in] 1961 and is currently aged 48 years. The respondent wife was born [in] 1959 and is currently aged 50 years.
The parties married and commenced cohabitation [in] 1986. There is a significant dispute between the parties as to the date of separation. In his affidavit material the husband deposes that the parties separated under the same roof in approximately 1994/1995. In the wife’s affidavit material she deposes that the parties’ marriage broke down irretrievably approximately 5 years ago. Regardless, at the time of the hearing both parties continued to reside in the former matrimonial home.
Neither party has re-partnered following separation.
There is one adult child of the marriage, namely [X] born [in] 1989 (“[X]”). [X] is currently a full-time student and she lives with the parties in the former matrimonial home. [X] is scheduled to conclude her tertiary studies at the end of 2010. She currently works part-time [in the hospitality industry].
The husband is in good health. The wife, however, deposes in her affidavit material that in or about February 2008 she suffered from depression and still suffers from depression currently to a degree. The wife also deposes that she suffers from sciatica in her lower right back but that this does not currently impede on her working ability.
At the time of the hearing, the husband was employed with [M]. The wife was similarly employed on a full time basis, though on a fixed term basis with an employment agency. The wife deposes in her affidavit material that her employment position is not certain at the expiration of the fixed term.
Both parties provided the Court with a brief chronology listing significant events in the parties’ relationship. The parties asserted (or agreed) that the following events were relevant:
·1986: husband owns block of land at Property D (which husband asserts was valued at that time at between $25,000-$30,000); parties marry and commence cohabitation; husband working for [V] and wife working at [S]; husband asserts he applies $50,000 of his savings[1] to build the former matrimonial home on the Property D land; husband asserts parties borrow $50,000 from Westpac[2] to assist in house building costs; parties travel overseas; wife asserts she had pre-relationship savings of between $4,000-$5,000;
·1989: [X] is born; wife takes 28 weeks maternity and other leave from her employment;
·1990: wife returns to work; [X] cared for during work hours by paternal and maternal grandparents; husband’s parents give him $15,000 which he uses to buy a Ford Falcon motor vehicle (currently in his possession); wife receives redundancy from [S] comprising a $25,000 payment (and asserts she receives superannuation benefits of between $40,000-$50,000);[3] wife applies redundancy payment to reduce mortgage debt ($20,000) and balance towards accumulated savings;
·1994/1995: dispute occurs at inter-family gathering; husband asserts parties separate (under one roof); husband asserts that he gives wife (until 2005) $250 a week towards household expenses (including expenses relating to the wife’s car and her travel to and from work);
·2000: husband asserts wife establishes and operates separate bank account(s); husband also asserts wife removes husband’s clothing from cupboards and drawers in the master bedroom and places them in the spare bedroom that he occupies;
·2002: wife asserts parties no longer pool income for housekeeping and other expenses;
·2004/2005: wife asserts parties separate (under one roof);
·2006: husband asserts husband’s parents gifted to him and his sister (Ms M) the sum of $108,000 (being the net proceeds of the sale of real estate owned by his parents’ company); husband asserts that his sister arranged for the husband’s share of the parents’ gift totalling $55,000 to be transferred to Laiki Bank in Greece;
·2007/2008: husband asserts that he deposits $8,000 from his savings into his Laiki Bank account; wife asserts she suffers from depression; wife resigns from employment with [F]; husband asserts he used joint funds totalling $14,000 (together with $1,000 of his own savings) to purchase a Holden Astra car for [X];
·2008/2009: husband asserts he withdraws the monies held in his Laiki Bank account (totalling $69,800) and gives it to his parents (and claims that his intention in doing so was to return to his parents the monies they gifted to him (i.e. $55,000); wife commences employment with [B]; husband commences family law proceedings; wife’s employment terminated; wife commences casual employment using employment agency.
[1] Wife agrees that at the time of the marriage the husband had savings of $25,000-$50,000: see wife’s affidavit sworn and filed 15 July 2009, paragraph 12.
[2] Wife agrees that the parties borrowed monies from Westpac to facilitate the construction of the former matrimonial home but believes that the sum borrowed was $40,000: see wife’s affidavit sworn and filed 15 July 2009, paragraph 14.
[3] The husband concedes that the wife received superannuation benefits but does not admit the amount or know where it was deposited; see husband’s affidavit sworn and filed 14 July 2009, paragraph 7(g)(iii).
The issues
Broadly speaking, the following issues were in dispute at the hearing:
·the parties’ contributions made prior to the relationship;
·the parties’ contributions made during the relationship;
·the date of the separation;
·the parties’ contributions made following the breakdown of the relationship;
·whether the monies deposited at the Laiki Bank by the husband (and his sister) were the husband’s monies and whether they (in substantial part) represented a gift from his parents; and
·the parties’ respective future needs and obligations.
Evidence of the parties
Both parties provided the Court with affidavit and oral evidence and were cross-examined.
In addition, Ms M, the husband’s sister, gave oral evidence in relation to her affidavit sworn 13 July 2009 and filed 14 July 2009.
Applicant husband’s evidence
The following documents were relied upon by the husband:
· Application filed 18 December 2008;
· Information Sheet filed 18 December 2008;
·
Husband’s Affidavit sworn 17 December 2008 and filed
18 December 2008 (“his first affidavit”);
·
Financial Statement sworn 17 December 2008 and filed
18 December 2008;
·Husband’s Affidavit sworn and filed 14 July 2009 (“his second affidavit”);
·Affidavit of Ms M sworn 13 July 2009 and filed 14 July 2009; and
· Outline of Case document filed 22 July 2009.
Respondent wife’s evidence
The following documents were relied upon by the wife:
· Response filed 11 February 2009;
·Wife’s Affidavit sworn 23 January 2009 and filed 11 February 2009 (“her first affidavit”);
· Amended Application filed 20 March 2009;
·Wife’s Affidavit sworn and filed 15 July 2009 (“her second affidavit”);
· Financial Statement sworn and filed 15 July 2009; and
· Outline of Case document filed 20 July 2009.
The law – the four steps
Section 79(1) of the Family Law Act 1975 (“the Act”) provides that the Court may make such orders as it sees fit altering interests in matrimonial property. The Court’s discretion is not unlimited and must be exercised in accordance with the factors set out in the legislation and more specifically, section 79(4).
The preferred approach to the exercise of the discretion has been outlined in numerous decisions of the Full Court of the Family Court, more recently in cases like In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143. That approach involves four interrelated steps:[4]
·Step 1: identify and value the parties’ property, liabilities and financial resources as at the date of the hearing;
·Step 2: identify and assess the parties’ ‘contributions’ within the meaning of section 79(4)(a), (b) and (c) and determine the parties’ contribution-based entitlements expressed as a percentage of the net value of the parties’ property;
·Step 3: identify and assess the relevant matters referred to in section 79(4)(d), (e), (f) and (g) (the other factors) including, because of section 79(4)(e), the matters referred to in section 79(2) so far as they are relevant and determine the adjustment
(if any) that should be made to the contribution-based entitlements of the parties established at Step 2; and·Step 4: consider the effects of those findings and resolve what order is just and equitable in all of the circumstances of the case.
[4]Young, L. & Monahan, G. (2009) Family Law in Australia (7th edition), Chatswood, New South Wales: LexisNexis Butterworths, pp.614-615.
Step 1: the asset pool
Following submissions by Counsel and questioning by the Court, and subject to some valuation differences, the following table represents the assets and liabilities of the parties (including superannuation entitlements):
Assets
Valuation
Former matrimonial home situated at Property D
$272,500[5]
Monies held by husband’s parents (husband) (husband asserts that his monies held by his parents are only $8,865)
$69,800
Contents in former matrimonial home (including piano)
$not known
Commonwealth Bank of Australia (“CBA”) term deposit
$30,000
AMP Flexible Lifetime Investment (wife)
$11,800
1990 Ford Falcon (husband)
$1,000
2001 Ford Laser (wife)
$2,500
CBA account (husband)
$6,000
CBA account (wife)
$2,377
AMP shares (husband)
$3,140
AMP shares (wife)
$2,650
‘Add-backs’ by wife claimed by husband ($11,375) plus proceeds of sale of Coles shares received by wife ($8,400)
$19,775
Subtotal/Assets (not including superannuation)
$to be determined
Liabilities
Westpac Bank mortgage (not yet discharged)
$Nil
Subtotal/Liabilities
$ Nil
Superannuation
Australian Super and AMP Super (wife)
$137,170
ESS Superannuation (husband)
$163,370
Subtotal/Superannuation
$300,540
[5] No formal valuations were tendered by the parties. The husband asserted the home was valued at $285,000 and the wife asserted its value to be $260,000. For simplicity a working figure of $272,500 will be applied.
By the conclusion of the final hearing there was agreement between the parties in relation to the division of some of the relevant non-superannuation assets:
·firstly, it was agreed that whatever the final division, the former matrimonial home will need to be sold;[6]
·secondly, in relation to the CBA term deposit, the parties were in agreement that it will be divided into three equal divisions of $10,000 with each party (and their daughter [X]) receiving a 1/3rd division;[7]
·thirdly, it was agreed that the two motor vehicles would not be included in the available asset pool and that each party would retain the vehicle currently in their respective possession;[8]
·fourthly, it was agreed that [X] would retain the piano[9] and that, with respect to the division of the other household contents and personal effects, it be divided as agreed between the parties on a “two-lists” basis (with an order to that effect).[10]
[6] Transcript, 6 October 2009, page 64 (lines 33-77).
[7] Ibid, page 64 (lines 46-47) and page 65 (lines 1-16).
[8] Transcript, 6 October 2009, page 66 (line 34).
[9] Ibid, page 65 (lines 24-34).
[10] Ibid, page 65 (lines 39-46).
In relation to superannuation, it was also agreed that there be no superannuation splitting order but rather there be an adjustment as between the parties (if ordered by the Court) to reflect their different entitlements.[11]
[11] Ibid, page 67 (lines 15-20).
To determine the net available property pool two sub-issues arise for determination:
·whether the monies deposited at the Laiki Bank by the husband (and his sister) were the husband’s monies and whether they (in substantial part) represented a gift from his parents?; and
·whether the wife should ‘add-back’ the monies claimed by the husband ($11,375) that she withdrew from the relevant CBA accounts and account for the proceeds of sale of the Coles shares ($8,400)?
Husband’s Laiki Bank monies
This issue dominated the final hearing and the interlocutory hearing in respect of subpoenas issued by the wife against the two subpoenaed persons (i.e. the husband’s sister and the husband’s father).
The husband outlines his evidence in relation to the Laiki Bank monies (and the gift he asserts he and his sister received from his parents) in paragraph 7(y) of his second affidavit. It is noteworthy that the husband made no reference to these transactions, nor did he reveal the monies currently in the possession of his parents, in either his first affidavit or in his Financial Statement. Despite the husband’s apology to the Court and to the wife as stated in paragraph 7(y)(xi) of his second affidavit, his initial failure to be full and frank in his financial disclosures is disturbing. Had the wife not discovered a document[12] in the former matrimonial home linking the husband to the Laiki Bank it is questionable whether the husband would have been motivated to make these disclosures. Hence the wife’s need to follow the evidentiary trail, particularly through the issue of subpoenas directed to the Laiki Bank (which did not oblige) and the husband’s sister and father, was certainly valid discovery. A question mark therefore hangs over the husband’s evidence in relation to these matters. Nevertheless, the fact that he did make those disclosures prior to the trial proceeding is relevant. That having been said, the husband must take some responsibility for the need for the wife to have issued those disputed subpoenas and consequently he shall be responsible for the costs of the two subpoenaed persons.
[12] See Exhibit “RW2”.
The wife, not surprisingly, sought to question whether the monies deposited by the husband (and his sister) were monies he had saved during the marriage, rather than being mostly derived from a gift from the husband’s parents (as the husband asserts). I will consider this theory in light of the evidence shortly.
In addition, prior to and at the commencement of the hearing, the wife sought clarity on whether the husband had a further account at another Greek bank (namely the Marfin Egnatia Bank), with a similar deposit amount. This particular issue was resolved by the tender of Exhibit “AH1” which confirms the merger of the two banks in 2007 and consequently it was conceded by the wife that there was only one Greek bank account relevant to these proceedings.[13]
[13] Transcript, 6 October 2009, page 86 (lines 29-31).
As previously stated, the husband contends that he and his sister
(Ms M) received funds of some $55,000 each from the husband’s parents by way of a gift. What is clear is that a bank account was opened up by the husband at the Laiki Bank which is also the same bank Ms M and her husband has or had money deposited with. To support their assertion of a gift, the husband produced a document from Westpac, namely a Term Deposit Repayment Advice dated 12 June 2006 for Account [omitted] held by ‘[G] Pty Ltd’ (which was admitted into evidence as Exhibit “AH2”). The relevant company is their parents’ company which the husband and Ms M were directors of in or about the relevant period that the term deposit was repaid to the company and the monies reinvested in the Laiki Bank accounts.
Ms M gave evidence that the term deposit funds ($111,502.73 together with interest of $1,932.36) repaid by Westpac to the company represented monies the company had invested following the company’s sale of an investment property at [O].[14] No other documents were exhibited or produced to support this transaction.
[14] Transcript, 6 October 2009, page 5 (lines 8-10).
The husband did not have his parents give evidence to confirm the gift and their intervention to benefit.
As previously stated, the wife asserts the possibility that the husband may have saved all the relevant monies during the marriage and that Ms M may have assisted him in “exporting some money overseas so that he could hide it from his wife”.[15] This was expressly denied by Ms M under cross-examination.[16]
[15] Ibid, page 11 (lines 39-40).
[16] Ibid, line 40.
Given the available evidence, and in particular the testimony of
Ms M, I am satisfied that the husband’s Laiki Bank monies, which include the initial deposit of his fund ($55,000) in 2006, a further deposit of $8,000 in 2007 (from monies the husband admits were his savings) and interest less charges earnt up to withdrawal in 2008 totalled $69,747.76 (see Exhibit “AH1”) or for simplicity, $69,800 as asserted by the husband in paragraph 7(y)(ix) of his second affidavit.
The husband’s further assertion that his parents now “hold”[17] these monies for him is troubling. It defies logic for these monies not to have been invested pending resolution of these proceedings. It is also somewhat convenient for the husband to now assert that he has now returned the parents’ gift (of $55,000) because he does “not need nor want the money”.[18] Given that we have no evidence from the husband’s parents either way, the husband must be held to account,[19] not just for his monies formerly held in the Laiki Bank, but also for the likely interest they have accrued since the account was closed in mid-2008 or alternatively, the interest forgone if these funds were not invested.
[17] Husband’s second affidavit, paragraph 7(y)(ix).
[18] Husband’s second affidavit, paragraph 7(y)(x).
[19] For the reasons expressed by Baker J in In the Marriage of Kowaliw (1981) FLC 91-092 at 76,654 (i.e. the general principle of joint liability does not apply “where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value”); see also In the Marriage of Browne and Green (1999) 25 Fam LR 482 at 497; (1999) FLC 92-873 at 86,360 (per Lindenmayer, Finn and Holden JJ).
Consequently, the husband will ‘add-back’ into the property pool the sum of $72,000.[20]
[20] This assumes a modest interest rate of 3% p.a. being applied to the fund since mid-2008.
Wife’s withdrawals from CBA accounts/proceeds from sale of Coles shares
As stated, the husband asserts that the wife should ‘add-back’ the various withdrawals she made from the CBA accounts in the
12 month period prior to the commencement of these proceedings[21] and account for the proceeds of the 2007 sale of the Coles shares.
[21] See husband’s Outline of Case document and his second affidavit paragraph 7(o)-(p).
The wife did acknowledge under cross-examination that she received the sum of approximately $8,400 from the sale to Wesfarmers of the Coles shares she previously held.[22] She also acknowledged that she had not consulted with the husband prior to the sale.[23] The wife then asserted that she deposited the proceeds of the sale into the CBA term deposit and subsequently drew down these funds for various purposes including the purchase of a car (for [X]), the purchase of a computer and desk (again, for [X]), the purchase of a dryer and other household expenses.[24] The wife also acknowledged that she used the withdrawn funds reducing her Visa credit card debt by $4,000.[25] The wife denied using the withdrawn funds to pay her legal costs.[26]
[22] Transcript, 6 October 2009, page 55, line 5.
[23] Ibid, line 3.
[24] Ibid, page 53, lines 18-46.
[25] Ibid, lines 18-28.
[26] Ibid, line 17-18.
In the absence of evidence to the contrary, the Court can only conclude that the bulk of the funds withdrawn by the wife were used to purchase various household and other items. It is also clear that the proceeds of the Coles shares were deposited into the CBA term deposit prior to, or around the time of, some of the withdrawals by the wife. That having been said, the wife should account for the $4,000 she withdrew to reduce her credit card debt.
Consequently, the amount of $4,000 will be added-back by the wife as a notional asset.
Net value of asset pool
Given the above determination, and the agreement reached between the parties in respect of the division of their contents and the CBA term deposit and the retention of their respective motor vehicles, the Court finds that the net available property pool (including all relevant ‘add-backs’ by the parties but excluding their superannuation entitlements) is $374,467 (or is $675,007 with superannuation entitlements included):
Assets
Valuation
Former matrimonial home situated at Property D
$272,500
Add-back by husband of monies held by husband’s parents
$72,000
AMP Flexible Lifetime Investment (wife)
$11,800
CBA account (husband)
$6,000
CBA account (wife)
$2,377
AMP shares (husband)
$3,140
AMP shares (wife)
$2,650
Add-back by wife of monies to reduce her credit card debt
$4,000
Subtotal/Assets (not including superannuation)
$374,467
Liabilities
Westpac Bank mortgage (not yet discharged)
$Nil
Subtotal/Liabilities
$ Nil
Superannuation
Australian Super and AMP Super (wife)
$137,170
ESS Superannuation (husband)
$163,370
Subtotal/Superannuation
$300,540
Net asset pool
$675,007
If one excludes the estimated value of the former matrimonial home from the net available property pool, then the relevant figure is $101,967.
Step 2: contributions
It is clear from the evidence that the parties have, for periods of their relationship, specialised their respective roles into that of significant ‘breadwinner’ and significant ‘homemaker and parent’. This is quite a normal and sensible division of labour in our society that usually advances both the financial prosperity, and the welfare, of the couple and their children.
While there is no presumption that such specialised roles equalise for contribution assessment purposes,[27] an outcome favouring equality is not unusual in cases involving long relationships following an analysis of the evidence relevant to section 79(4)(a)-(c).[28] Of course, such an outcome may alter following consideration of the other section 79 factors, in particular section 79(4)(e).[29]
[27] In the Marriage ofMallet (1984) 156 CLR 605, In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335, In the Marriage of McLay (1996) 20 Fam LR 239; (1996) FLC 92-667.
[28] In the Marriage of McLay (1996) 20 Fam LR 239 at 248-250 (per Nicholson CJ, Fogarty and Dessau JJ).
[29] Ibid, at 250.
That all having been said, the wife was also in paid employment for much of the relationship and the parties relied on their respective parents to assist in [X]’s care while they were both at work.
The Court is required to consider the parties’ contributions made on and from the commencement of their relationship,[30] during their relationship, and following separation.[31] Before I can consider this further, the Court needs to determine the dispute between the parties as to when they separated within the meaning of the Act.
[30] In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499.
[31] In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-657.
When did the parties separate?
As previously stated, the parties are in significant dispute as to the date of separation. At the time of the hearing both parties continued to reside in the former matrimonial home and both indicated that they expect to continue to do so unless the property is sold.
Although ‘separation’ is referred to in the Act, it is not specifically defined. Section 49(2) of the Act does state, however:
“(1) The parties to a marriage may be held to have separated notwithstanding that the cohabitation was brought to an end by the action or conduct of one only of the parties.
(2) The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.”
There is a large body of law on the question of what constitutes separation, most notably the Full Court of the Family Court decision of In the Marriage of Pavey (1976) 1 Fam LR 11,358; (1976) FLC 90-051. Generally speaking, in a simple case of separation the facts will speak for themselves. Where there is separation under the one roof, more will be required. As Lisa Young and I stated in Family Law in Australia:
“[5.61] … In that situation, regard will have to be had to the circumstances of the relationship, to establish whether what is known as the ‘consortium vitae’ has broken down. Unless it has, separation cannot be established.
Consortium vitae is the matrimonial relationship, consisting of the various incidents that go to make up such a relationship. Such matters as ‘marital intercourse, the dwelling under the same roof, society and protection, support, recognition in public and private correspondence during separation’[32] are amongst those incidents, but they are neither exhaustive nor exclusive ...”[33]
[32] Tulk v Rulk [1907] VLR 64 at 65 (per Cussen J); see also In the Marriage of Todd (No 2) (1976) 1 Fam LR 11,186 at 11,188; (1976) FLC 90-008 at 75,079.
[33]Young, L. & Monahan, G. (2009) Family Law in Australia (7th edition), Chatswood, New South Wales: LexisNexis Butterworths, p.192.
Clearly, ‘consortium vitae’ can only end in fact if, firstly, one or both of the parties intend it to, and secondly, one or both of the parties act on that intention. In addition, in cases where the parties separate under the one roof, separation must be overt.[34] In other words, a party would not be able to prove that they had acted on the intention if they had kept their intention hidden.[35]
[34] In the Marriage of Fenech (1976) 1 Fam LR 11,250 at 251; (1976) FLC 90-035 at 75,134 (per Evatt CJ); see also In the Marriage of Falk (1977) 3 Fam LR 11,238; (1977) FLC 90-247.
[35] In the Marriage of Falk (1977) 3 Fam LR 11,238 at 11,244; (1977) FLC 90-247 at 76,333.
In his affidavit material the husband deposes that the parties separated under the same roof in approximately 1994/1995. More specifically, the husband asserted during the final hearing that the relevant date was 18 May 1994.[36] It is noteworthy that the husband asserts that the parties remained together, albeit separated under the one roof, for the benefit of their daughter [X], and that he did commence these proceedings following [X]’s completion of her high school studies.
[36] Transcript, 6 October 2009, page 22 (lines 29-36).
In the wife’s affidavit material she deposes that the parties’ marriage broke down irretrievably approximately 5 years ago. While neither party resiled from their respective view under cross-examination, the wife did confirm that the significant event that occurred on 18 May 1994 was a serious dispute that arose between the maternal and paternal families at her daughter [X]’s 5th birthday. More specifically, the wife acknowledged under cross-examination that on that date:
“… it wasn’t the marriage that ended but the relationship with my sister-in-law, her husband, my father-in-law and [Mr Sullivan]’s side of the family. That’s what happened, not the marriage.”[37]
She went on to allege that on that occasion there had been a physical altercation between her father and her father-in-law and also between herself and her sister-in-law.[38] While the wife denied under cross-examination that she and the husband separated under the one roof following that incident in 1994, she did say:
“It wasn’t separation, but definitely the marriage was deadened.”[39]
This comment prompted Ms Stoikovska for the husband to ask the wife:
“And given that the marriage was definitely “deadened”, to use your word, given that you have told my client, if he wants a divorce, he can leave, when he says to his Honour that as far as he was concerned he was staying around because there was only …”
“Never said that. … He never said that, and I would never agree to give my daughter a pretend family.”
[37] Transcript, 6 October 2009, page 23 (lines 1-3).
[38] Ibid, lines 13-17.
[39] Ibid, page 26 (lines 1-2).
“But you did?”
“No.”
Not surprisingly, the husband’s sister, Ms M, lent support to the husband’s assertion that the parties separated in the mid-1990’s. She did acknowledge under cross-examination, however, that she has not visited the parties’ home since the 1994 incident and that she was relying on the hearsay of others, including the husband.[40]
[40] Transcript, 6 October 2009, page 12, lines 7-24.
Another event of significance was the wife’s decision to open her own bank account in 2000.[41] She was cross-examined about this event at some length.[42] The wife’s explanation (i.e. that she held fears that her husband may lose his employment) was unconvincing. In the absence of evidence to the contrary, the Court finds that despite the poor relationship that had existed between the parties since 1994, this subsequent event represents a significant change in the parties’ cohabitation.
[41] See wife’s second affidavit, paragraph 28.
[42] See generally, Transcript, 6 October 2009, pages 31-35.
Consequently, the parties will be held to have separated under the one roof within the meaning of the Act during the year 2000.
Financial and non-financial contributions
It is clear that both parties have made financial and non-financial contributions to the acquisition, conservation and improvement of their matrimonial property. This is particularly so given their mutual investment of their earnings into their property pool and their labours associated with their conservation of the former matrimonial home.
The husband, understandably, asks the Court to consider his own initial contributions, in particular his contribution by bringing into the marriage a parcel of land and considerable savings that were subsequently utilised (together with a mortgage) to become the former matrimonial home.
It is also clear from the evidence that the husband, through the parties’ decision to specialise their respective roles, has been able to significantly contribute more of his income and energy into making relevant financial and non-financial contributions than that of the wife.
The wife, understandably, asks the Court to consider her own contributions, not just to the conservation and improvement of the former matrimonial home they lived in during their relationship and her contribution to the parties’ living expenses, but her own competing financial, non-financial and family contributions that act to erode the significance of the husband’s on-going financial and non-financial contributions.
The Court also needs to factor in the post-separation contribution by the husband that has produced a sizable sum of money to be held by the husband’s parents on the husband’s behalf.
If the Court accepts the evidence of the husband (and his sister) that the bulk of these monies were received as a gift from the husband’s parents, then the Court may view all the monies as a significant post-separation contribution made by the husband. As the Full Court of the Family Court stated in the case of In the Marriage of Kessey (1994) 18 Fam LR 149; (1994) FLC 92-495:
“…a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.[43]
[43] In the Marriage of Kessey (1994) 18 Fam LR 149 at 161; (1994) FLC 92-495 at 81,150 (per Baker, Finn and McCall JJ).
Given the wife’s own evidence as to the events of, and following, [X]’s 5th birthday, there can be no doubt that the husband’s parents would have only intended their son (and their daughter Ms M) to benefit from their generous gift of the proceeds of sale of their [O] investment property. The husband’s parents may have also had other reasons for making this gift.
Regardless, if the Court were to disregard the evidence that the monies were primarily provided by way of a gift from the husband’s parents, then the only other alternative is that the husband accumulated these funds from his own (post-separation) savings. There is no compelling evidence to support this theory.
Family contributions (as homemaker and parent)
As has been previously noted, in addition to her contributions made pursuant to section 79(4)(a) and (b), I am satisfied that the wife was the primary homemaker for the parties and the primary carer of [X], subject however to acknowledging the role played by the maternal and paternal grandparents in caring for [X]. That having been acknowledged, I find that the wife made a major contribution to the family pursuant to section 79(4)(c).
Global or asset-by-asset assessment of contributions
Given the length of the parties’ relationship, and its history, the ‘global’ approach to the assessment of contributions is the most appropriate to the parties’ circumstances.
Step 3: section 75(2) and related factors
The parties are both aged in their late forties and neither has re-partnered.
As stated previously, at the time of the final hearing the husband was employed with [M].[44] Although he currently works for a joint-venture company, the husband has maintained his employment since joining [V] in 1980 and following its partial privatisation. He attests to earning “approximately $90,000 per annum gross including overtime”[45] and in his Financial Statement he discloses earning total average weekly income of $1,700. He is in good health.
[44] See
[45] See husband’s first affidavit, paragraph 2.
At the time of the hearing the wife was working as a customer service representative on a temporary basis at [A] (via a short-term two-three month contract of employment with an employment agency).[46] She asserts in her second Financial Statement to earning an average weekly income of $864 and states in paragraph 36 of her second affidavit that her “employment position is uncertain at the expiration of my current employment”. The wife also asserts that while she suffered from depression during the period 2007-2008 (for which she was prescribed antidepressant medication), her condition has improved and she no longer requires ongoing medical supervision or medication.[47]
[46] See wife’s second affidavit, paragraph 59.
[47] See wife's second affidavit, paragraph 32.
In light of the above-mentioned circumstances, the Court agrees with the submissions made by the wife that there should be an adjustment in her favour pursuant to section 75(2) and related factors.[48] As to the relevant percentage, the Court finds that an adjustment of 10% is appropriate given all the circumstances.
[48] Transcript, 6 October 2009, page 74 (lines 35-37).
Final step: justice and equity
Section 79(2) of the Act 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 case concerns a reasonably long marriage where the assets available for distribution are relatively modest.
It also concerns considerable pre-relationship contributions made by the husband which have been somewhat eroded by the competing contributions of the wife prior to the parties separating in 2000, and post-separation. As the Full Court of the Family Court stated in the case of In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution…”[49]
[49] In the Marriage of Pierce (1998) 24 Fam LR 377 at 386-387; (1999) FLC 92-844 at 85,881 (per Ellis, Baker and O’Ryan JJ).
As stated previously, the parties used the husband’s pre-relationship contribution (together with borrowed funds) to fund the former matrimonial home.
In addition, the husband has, post-separation, contributed the monetary gift made by his parents.
Overall, the Court is satisfied that on a contributions analysis, the matrimonial property should be divided 60% in favour of the husband and 40% in favour of the wife.
In addition, as indicated above, I am satisfied that a further adjustment of 10% in the wife’s favour to reflect section 75(2) and related factors is warranted. As a result, an overall adjustment favouring the husband 50% to the wife’s 50% is just and equitable in all the circumstances.
Based on the agreed valuations and determinations made by this Court, and excluding superannuation entitlements, household contents and other personal property that the parties have reached agreement in relation to, this represents an amount of $187,233.50 in favour of each party.
The principal asset for division between the parties is, of course, the former matrimonial home. The final payout will depend upon which party receives or retains the other relevant personal property assets. Unless the parties agree otherwise, or have done so since the date of the final hearing, the parties will forthwith list the former matrimonial home for sale by private treaty and failing a sale within six months, for sale by way of auction.
In the absence of agreement to the contrary, the husband and the wife should each retain the money and investments in their respective names, subject to the husband paying the wife within one month from the date of this decision, the sum of $30,156.50, made up as follows:
Wife’s 50% interest in net available property pool as agreed (excluding superannuation entitlements and the estimated value of the former matrimonial home) (i.e. $101,967).
$50,983.50
Less AMP Flexible Lifetime Investment (to be retained by wife)
$11,800
Less wife’s CBA account
$2,377
Less wife’s AMP shares
$2,650
Less add-back by wife as determined
$4,000
Total payment required
$30,156.50
With respect to the division of the other personal property and household contents (other than the piano which the parties have agreed shall be retained by [X]), such will be divided as agreed between the parties on a “two-lists” basis.
In relation to superannuation, given the relatively similar benefit amounts that have accumulated, and the fact that the husband made pre-relationship contributions to his fund, the Court does not find that any further accounting between the parties is warranted. Consequently, each party will keep their respective entitlements free from any claim by the other.
Conclusion
In light of the matters referred to above, the Court is satisfied that orders reflecting the following outcome is a just and equitable division of the relevant matrimonial property:
·that subject to agreement to the contrary, the parties will forthwith cause the former matrimonial home to be listed for sale by private treaty (and failing a sale by private treaty within six months the parties shall thereafter cause the property to be listed for sale by auction) and upon sale the net proceeds be distributed in the sum of 50% to the husband and 50% to the wife;
·that subject to agreement to the contrary, until settlement of the sale of the former matrimonial home, the parties shall equally pay all rates and taxes in relation to the former matrimonial home (including payment of all arrears) as they fall due;
·that within one month from the date of these orders the husband shall pay to the wife the sum of $30,156.50 and transfer to her all his interest in the AMP Flexible Lifetime Investment;
·that the husband retain all his interest and entitlements in his ESS Superannuation fund;
·that the wife retain all her interest and entitlements in her Australian Super and AMP Super superannuation funds;
·that all items of personal property, furniture, furnishings and effects (excluding the piano) contained in the former matrimonial home shall be divided between the parties by agreement or failing agreement within one month of the date of the making of the relevant order in the following manner:
(a)the husband shall, within two months of the making of the relevant order, do all acts and things necessary to prepare two lists of the furniture, and the furniture contained in each list be approximate in total value to that contained on the other list;
(b) the wife shall select one (only) of the said lists within seven days of receipt thereof, and in default, the husband shall select one (only) of the lists for the wife, and thereafter the wife shall be solely entitled to the items contained in the list she has selected or been allocated, and the husband shall be solely entitled to the items contained in the other list, such selection or allocation to be specified in writing;
(c)the parties shall make available for collection by the other or any persons either nominated in writing, all of those items contained in whichever of the said two lists the wife has chosen or the husband chooses for the wife at any reasonable time requested by the other party, and that pending collection of the items, the parties shall properly maintain such items.
·that subject to the above, each party retain the other property in his or her respective possession including motor vehicles, shares and any monies standing to his or her credit in any bank or financial institution or due and payable by any third party;
·that each party indemnify the other with respect to any debts and liabilities standing in that party’s sole name; and
·the Court notes that in relation to the CBA term deposit, the parties have agreed that it will be divided into three equal divisions of $10,000 with each party (and their daughter [X]) receiving a 1/3rd division.
Lastly, there will be final orders and notations of the Court to reflect this decision.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Monahan FM
Deputy Associate: M. Raggatt
Date: 9 February 2010
NOTATION
The figures within the following paragraphs have been amended as stated:
Paragraph 79
In the absence of agreement to the contrary, the husband and the wife should each retain the money and investments in their respective names, subject to the husband paying the wife within one month from the date of this decision, the sum of Deleted
$7,756.50Inserted $30,156.50, made up as follows:
Wife’s 50% interest in net available property pool as agreed (excluding superannuation entitlements and the estimated value of the former matrimonial home) (i.e. $101,967).
$50,983.50
Less AMP Flexible Lifetime Investment (to be retained by wife)
Deleted
$34,200Inserted $11,800
Less wife’s CBA account
$2,377
Less wife’s AMP shares
$2,650
Less add-back by wife as determined
$4,000
Total payment required
Deleted
$7,756.50Inserted $30,156.50
Paragraph 82
Point three
·that within one month from the date of these orders the husband shall pay to the wife the sum of Deleted
$7,756.50Inserted $30,156.50 and transfer to her all his interest in the AMP Flexible Lifetime Investment;