T and T

[2008] FCWA 27

[2008] FCWA 27

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	T and T [2008] FCWA 27
CORAM	:	PENNY J
HEARD	:	4 FEBRUARY 2008
DELIVERED	:	4 MARCH 2008
FILE NO/S	:	PT 5204 of 2006
BETWEEN	:	T
Applicant/Husband
AND
T Respondent/Wife
Catchwords:

Property settlement - undefended application - significant financial contributions by wife - husband's conduct made wife's contributions more arduous - "Kennon factors"

Legislation:

Family Law Act 1975 - s 75(2), s 79

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Ms J Brown
Respondent	:	Mr T O'Sullivan

[2008] FCWA 27

Solicitors:

Applicant	:	Lynn & Brown
Respondent	:	O'Sullivan Davies

Case(s) referred to in judgment(s):

Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)
(2003) FLC 93-143
Kennon and Kennon (1997) FLC 92-757

[2008] FCWA 27

1 The husband initiated proceedings in this court on 15 September 2006 seeking

parenting and property orders. After several hearings and the husband’s continued failure to comply with court orders, particularly in relation to financial disclosure, the wife was granted leave on 25 July 2007 to proceed on an undefended basis. Despite the order the husband attended a procedural conference on 4 December 2007. The conference was then adjourned to 18 December 2007, at which time the husband did not appear and the matter was listed for an undefended trial on 4 February 2008.

2 On 31 January 2008 the husband filed an application seeking leave to be

reinstated as a party to the proceedings, and an extension of time to lodge an appeal to the decision allowing the wife to proceed on an undefended basis. The matter came before me on 4 February 2008 and after considering the history of the proceedings and the husband’s action I dismissed his application filed on 31 January 2008, and his amended application seeking property orders filed on 9 January 2007. Accordingly, the matter now proceeds on an undefended basis.

Orders Sought

3 The wife filed a minute of final orders sought on 14 December 2007 seeking

orders that any interest the husband has in the former matrimonial home at [the address in the suburb] be transferred to her. Upon such an event, she will indemnify the husband in respect of the first mortgage over the property, and the husband is to indemnify her against the second mortgage over the property. The wife also seeks an order that a caveat lodged over the former matrimonial home by the husband’s previous solicitors, Freidman Lurie Singh on 25 September 2006 be removed. It appears the caveat was lodged over the home as security for the husband’s deferred legal fees. Freidman Lurie Singh filed a notice of cease acting for the husband on 1 November 2007.

4 The wife has also sought an order that the husband deliver up her digicam,

engagement ring and wedding ring. It was ordered by the Court on 16 May 2007 that pending the disposal of the proceedings the husband’s interest in these items vests in the wife.

5 Further, the minute filed by the wife covers orders relating to legal costs. She

seeks that the husband pay her the sum of $1,470, comprising costs ordered to be paid by the husband on 24 April 2007, 16 May 2007 and 25 July 2007. The wife also seeks the husband pay $10,000 towards her legal fees as she has incurred unnecessary costs due to his conduct. As at 31 January 2008 the wife legal fees totalled $42,841.07. I informed the wife’s counsel at the hearing on 4 February 2008 that in my opinion it is appropriate for costs to be considered after I have delivered my judgment once the final position is known. As such at this stage I do not intend to propose any orders relating to costs.

6 Although the wife’s counsel has not included in the wife’s trial materials the

percentage division of the parties’ assets sought by the wife, effectively, on the
financial information presented, she seeks approximately 91% division in her favour.

[2008] FCWA 27

Short background history of the parties and the marriage

7 The wife is 51 years of age and the husband is 42. They are both currently

unemployed. The parties first met while working in [the Eastern states] in 1995 and
were subsequently married [in] September 1996. They relocated to Perth in 1997.

8 There is one child of the relationship, [Christian], who was born [in] March 2000. The husband has [an adult] daughter from a previous relationship.

9 There is a significant history of domestic violence in this relationship.

According to the wife the husband’s escalating abuse resulted in the parties’ separation following an incident where she says she was attacked by the husband outside the former matrimonial home on 9 December 2005. Subsequently, the wife obtained a violence restraining order on 13 December 2005. The husband has been prosecuted twice for breaches of the order. The parties were divorced on 30 July 2007.

Assets and Liabilities

10 The approach to be taken in relation to an application for property settlement

pursuant to s 79 of the Family Law Act 1975 is a four step process. Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143. Those steps are:

1	identify the value of the assets and liabilities of the parties;
2	consider the contributions made by the parties within paragraph (a) to (c) of s 79(4);
3	consider the s 75(2) factors, together with any matters relevant pursuant to s 79(4)(d)-(g); and
4	consider whether the order proposed is just and equitable.

11 As the matter has proceeded undefended, and the husband has not previously

complied with financial disclosure orders, the schedule of the parties’ assets and liabilities is based on information provided by the wife and therefore will contain gaps which cannot be avoided in a case such as this. An example of this is the husband’s superannuation entitlement. The wife says she is aware of at least 11 superannuation funds held by the husband at some stage, although she acknowledges that the funds may have been consolidated. Based on the numerous funds and that she says the husband has worked since he was a teenager, the wife estimated the husband’s total superannuation entitlement to be $50,000. I consider this to be an appropriate amount considering the reasoning of the wife and the husband’s lack of financial disclosure.

Assets	Value
[The matrimonial home]	$600,000
[Motor vehicle] (husband)	6,000
Savings Account (husband) as at 30 June 2006	797

[2008] FCWA 27

Jewellery (husband)	E10,000
Tools & Equipment (husband)	E5,000
[Motor vehicle]	E12,700
Savings Account (wife)	600
Digicam, engagement ring and wedding ring (wife)	NK
Total Assets	$635,097
Liabilities
Commonwealth Bank Mortgage 1	$180,054
Commonwealth Bank Mortgage 2	29,324
Commonwealth Bank Visa (husband)	NK
RAC American Express (husband)	NK
Go Mastercard (husband)	NK
Creditech Telstra debt (husband)	NK
Commonwealth Bank Visa (wife)	1,000
Loan from [her father]	82,848
Total Liabilities	$293,226
Superannuation
Husband	E$50,000
Wife	90,490
Net Total Assets	$482,361

Contributions

12 At the commencement of the relationship the wife had assets valued at

approximately $155,000, being an investment property in [the Eastern states], a motor vehicle, superannuation and shares. The wife says the husband had assets of nominal value.

13 After the parties were married the wife made substantial financial contributions

to the relationship through some unfortunate circumstances relating to her employment with [CAA]. In 1992/1993 while working for [CAA] the wife was exposed to toxic fumes resulting in chronic fatigue, sensitivity to chemicals and chemical asthma. The wife instituted proceedings against [CAA] in the [state][Supreme Court in 1996. She

[2008] FCWA 27

was subsequently retrenched on 17 January 1997. Consequently, she received a retrenchment payment of $63,305 and an “ill-health” payment to her superannuation of $78,323.30. The wife later settled her Supreme Court proceedings against [CAA] in 2001 for $230,000. After expenses were paid the wife received $197,000.

14 The majority of the wife’s retrenchment payment and the settlement money,

totalling just over $260,000, were used by the parties for joint living expenses, the costs of relocating to Perth and to purchase the former matrimonial home. The wife also used $20,000 of her settlement money to repay part of the mortgage over the [Eastern states] property. In 2001 the parties jointly purchased the former matrimonial home in [the suburb] for $275,000. The wife contributed approximately $50,000 of her settlement money to the purchase of the property and the balance was financed by a loan from Commonwealth Bank. The parties later obtained a second home loan over the former matrimonial home in 2003 for approximately $30,000. The funds were used to pay the husband’s car loan and credit cards, and to purchase a television and stereo.

15 When the parties commenced their relationship they were both employed. After the wife was retrenched from [CAA] in 1997 she did not return to work until 2005, except for working as a [party plan] sales representative in 2003. She says that the husband only worked intermittently. It appears he was employed as a general tradesman. His income varied throughout the marriage, ranging from $43,933 in year ending 30 June 1998 to $15,540 in the year ending 30 June 2002. The wife says that the husband had difficulty retaining employment, particularly when the parties moved to Perth in 1997. As a result of the parties’ employment situation, the wife supported the family by selling some [CAA] shares, obtaining loans and using her retrenchment and settlement payment. This money was eventually depleted and the parties’ financial situation became so dire that the wife says they were forced to receive food from charities, family and friends. The husband obtained Centrelink benefits in 2003 and the wife in 2004. Eventually in 2005 the wife found employment as an accounts secretary to provide financial support to the family.

16 During the parties’ poor financial situation, the wife was also required to sell the

[Eastern states] property for approximately $206,000. The proceeds of the sale, being $90,000, were used to pay outstanding loans to the wife’s father, purchase a new car for the wife and contribute towards the parties’ living expenses and bills.

17 Since the parties separated the wife has met all the mortgage repayments and

other associated expenses relating to the former matrimonial home. This includes the second mortgage over the property that relates largely to debts of the husband. The only benefit the wife says she has retained from the loan is the television and stereo, which were purchased for approximately $7,000. The wife is responsible for all expenses relating to the parties’ child as the husband does not pay any child support. After separation she initially continued to work but took a leave of absence in July 2006 to care full-time for the parties’ child.

18 Further, the wife says she was the primary homemaker and parent during the parties’ relationship.

[2008] FCWA 27

Impact of the husband’s behaviour on contributions

19 As mentioned previously, there is a history of domestic violence in this

relationship. The wife says the abuse first occurred in 1997, from which time the husband’s behaviour continued to escalate, with minor verbal abuse leading to violent physical attacks. The wife provides numerous examples of the husband’s abusive behaviour, including attempting to strangle her in front of their child, controlling where she could go, harassing her at work and attacking her outside their home. The wife says that due to the husband’s behaviour she began to fear for her life and the life of their child. She says she slept in a separate bedroom with her keys and mobile telephone under her pillow in case she needed to leave suddenly in the middle of the night. Eventually, the husband’s behaviour caused the wife to leave the home in June 2004. She returned two months later in August 2004 based on the husband’s claim he would undertake counselling and would not continue his abusive behaviour.

20 The parties finally separated in December 2005 when the wife alleges she was

attacked by the husband outside their home. The wife annexed to her trial affidavit a medical report by [Dr L] dated 12 December 2005. The report notes that on that day the wife presented with superficial grazes and scratches and some bruising. The wife obtained a violence restraining order on the same day, after which the husband left the former matrimonial home.

21 The husband has since breached the violence restraining order on two occasions,

once in August 2006 for attending the hospital after the wife suffered heart failure, and secondly in 2007 for driving by the former matrimonial home. The husband received a spent conviction and $50 fine in October 2006 for the first breach and recently received a spent conviction and $300 fine for the second breach.

22 The wife’s friend, [L] and her former employer, [Mr W] filed affidavits on

behalf of the wife on 24 November 2006 corroborating that they had witnessed the
husband’s threatening and harassing behaviour directed towards the wife.

23 The wife argues that her contributions throughout the marriage, and continuing

into separation, were made more arduous because of her husband’s behaviour. She says on a financial level the husband made it more difficult for her to obtain employment by harassing both the wife at work and her employer, and causing disruptions at her workplace. She says the husband has also made her contributions to the welfare of the family more arduous as the parties’ child has suffered anxiety, including bed-wetting and sleeplessness, due to the husband’s violence and harassment.

24 The wife seeks to rely on the decision in Kennon and Kennon (1997) FLC 92- 757, where an adjustment to contributions was made in the wife’s favour because the husband’s domestic violence had made her contributions more arduous. In this case Fogarty and Lindenmayer JJ said at 84,294;

“Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions

[2008] FCWA 27

significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.

…..

However, it is important to consider the “floodgates” argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this court to fault and misconduct in property matters — a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.

However, in our view, s 79 should encompass the exceptional cases which we described above. It would not be appropriate to exclude them as a matter of policy because of this risk. It is a matter of commonsense for the lawyers involved and, where that may not be sufficient, it is a matter for a firm hand by the court at an early stage when a case appears to raise those issues.

It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions)….”

25 I am satisfied that the facts in this matter establish numerous attacks upon the

wife which made her contributions considerably more arduous than they ought to have
been.

26 Based on the wife’s contributions during the parties’ marriage and post

separation, and the circumstances in which she made those contributions, I consider it
appropriate to divide the asset pool 80% to the wife and 20% to the husband.

Section 75(2) factors

27 The wife is some 9 years older than the husband. She is of ill health. She was diagnosed with Grave’s disease (a form of hyperthyroidism) in November 2005, suffered heart failure in August 2006 (for which she has had some continuing problems) and was diagnosed by a psychologist in January 2008 as having Post- Traumatic Stress Disorder. There is no direct evidence to suggest that the husband is not healthy, however, in attempt to be reinstated as a party to these proceedings he informed the Court that he recently sustained a shoulder injury which requires surgery.

[2008] FCWA 27

28 Both parties are currently unemployed. It appears the husband would is unable

to work with his current injuries. He also noted in his affidavit in support of his application to be reinstated as a party noted that he was receiving sickness benefits due to his injuries. The wife intends to return to work in the next six months. She has undertaken a course at Tafe to assist her movement back into the work force. However, it was recently recommended by the psychologist who diagnosed her Post- Traumatic Stress for the wife to delay returning to work for six months. Despite this she says she is hopeful to return to work before this time as she will be commencing therapy for her Post-Traumatic Stress in February 2008. Presently, the wife’s only source of income is her Centrelink single parenting payment, and a fortnightly payment of $500 from her father for living expenses. The wife says that her father will not be able to continue this payment for much longer as his retirement savings are nearly depleted.

29 The husband does not currently pay child support to the wife. It is unlikely the

wife will actually receive any assessed amount from the husband in the near future, particularly as it seems he is unemployed and he has not paid any child support in the past.

30 Notwithstanding the mortgages over the former matrimonial home, the parties

both have their own debts to service. The wife’s current sole liabilities amount to $90,848, which includes $7,000 in outstanding legal fees. The vast majority of the wife’s debt relates to amounts she owes to her father. He has provided her with a great deal of financial support since the parties’ separated and also at times during their marriage. The husband has numerous credit cards that he will need to continue to repay. Due to his lack of financial disclosure the total amount of those debts are unknown.

31 The wife estimates the husband superannuation totals $50,000, however, again

due to the husband’s failure to provide financial disclosure the full entitlement is not known. Regardless the wife’s superannuation is significantly largely than the husband’s estimated amount as the wife received an ill health payment after she was retrenched from [CAA].

32 Neither party is in a particularly advantageous financial position. They are both

currently unemployed and they are both required to service a number of debts. The wife does have intentions to re-enter the work force shortly, however, she has the sole financial responsibility for the parties’ child, and it appears that this will continue at least in the near future. I consider it necessary to make a 5% adjustment in favour of the wife.

Just and equitable

33 The wife seeks to retain the former matrimonial home to provide stability and

security for the parties’ child. This is particularly important in light of the incidents of domestic violence the child has already been exposed to, which have caused him anxiety.

[2008] FCWA 27

34 The wife has sole financial responsibility for the parties’ child, [Christian]. It is

unlikely that she will receive any child support from the husband in the near future. The wife has made the majority of the contributions throughout the parties’ marriage, and has continued to do so post-separation. During the marriage she received a total of $260,305 in payments, being her retrenchment payment of $63,305 and her compensation claim of $197,000. All of this money has been expended, with the vast majority being applied towards the maintenance of the family, particularly at times when neither was employed. She was also required to sell the investment property in [Eastern states] that she owned at the commencement of the relationship.

35 Given the contributions made by the wife, the lack of financial disclosure by the

husband and the wife’s continuing responsibility towards [Christian] I consider it just and equitable that the wife receives 85% of the parties’ assets. This is particularly in light of the considerable stress suffered by the wife and [Christian] by the actions of the husband both during the relationship and post-separation, and the desirability of placing them in a stable and secure position.

36 The effect of the orders I intend to make will be as follows:

Assets Husband Wife

[The matrimonial home]	$600,000
[Motor vehicle]	6,000
Savings Account as at 30 June 2006	797
Jewellery	E10,000
Tools & Equipment	E5,000
[Motor vehicle]	E12,700
Savings Account (wife)	600
Digicam, engagement ring and wedding ring (wife)	NK

Total Assets	$21,797	$613,300
Liabilities
Commonwealth Bank Mortgage 1	$180,054

Commonwealth Bank Mortgage 2	29,324
Commonwealth Bank Visa (husband)	NK
RAC American Express (husband)	NK
Go Mastercard (husband)	NK
Creditech Telstra debt (husband)	NK
Commonwealth Bank Visa (wife)	1,000
Loan from [her father]	82,848

[2008] FCWA 27

Total Liabilities	$21,797 $293,226
Nett Assets	$320,074
Superannuation
Husband	E$50,000
Wife	90,490

Net Total Assets $71,797 $410,564

37 Accordingly, to achieve the determined division, being 15% to the husband and

85% to the wife, the wife would retain assets of $410,007. The assets currently retained by the wife total $410,564. In my opinion, a division whereby the parties retained the assets and liabilities in their possession amounts to a just and equitable division of the parties’ assets.

Proposed Orders

1 The husband transfer to the wife the whole of his estate and interest in the former matrimonial home situate at [the address in the suburb], in the State of Western Australia, being property more particularly described in Certificate of Title Volume xxxx Folio xxx (“the matrimonial home”).

2 Upon such transfer referred to in paragraph 1 the husband do all such acts and things as are necessary (including paying all liabilities and fees owed to his former solicitors) and sign all such documents as are necessary to cause the withdrawal of Caveat xxxx registered by his solicitors on the title to the former matrimonial home (lodged 26 September 2006) (“the Caveat”), and pay all costs in relation thereto.

3 Upon such transfer referred to in paragraph 1 the wife:

3.1	do all things necessary and execute all relevant documents so as to transfer loan account number xxxxxx (“the first mortgage”) and loan number xxxxxx (“the second mortgage”) into the wife’s sole name; and
3.2	pay and indemnify the husband in relation to all instalments and interest owing on the mortgages and all rates, taxes and other outgoings with respect to the former matrimonial home.

4. The husband forthwith deliver up to the wife her digicam, engagement ring and wedding ring.

[2008] FCWA 27

5. The husband’s interest in the following vest in the wife:

5.1	[2005 motor vehicle] registered in the wife’s name;
5.2	furniture and chattels in possession of the wife;
5.3	the wife’s digicam, engagement ring and wedding ring;
5.4	any monies in any bank or other account held by the wife; and
5.5	any superannuation entitlement held by the wife.

6 The wife’s interest in the following vest in the husband:

6.1	1999 [motor vehicle] registered in the wife’s name;
6.2	furniture and chattels in possession of the husband;
6.3	any monies in any bank or other account held by the husband; and
6.4	any superannuation entitlement held by the husband.

7 The wife indemnify the husband in relation to:

7.1	monies owing to [her father]; and
7.2	monies owing on her Visa credit card.

8 The husband indemnify the wife in relation to monies owing on the following accounts:

8.1	Go Mastercard [account number];
8.2	RAC American Express [account number];
8.3	Creditech Telstra [account number]; and
8.4	Commonwealth Bank Visa [account number].

9 The parties have liberty to re-apply in relation to the implementation of these orders.

10 The application and response otherwise be dismissed.

I certify that the preceding [37] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate