Tallis and Tallis

[2016] FCCA 1145

FEDERAL CIRCUIT COURT OF AUSTRALIA

TALLIS & TALLIS [2016] FCCA 1145

Catchwords:
FAMILY LAW – Property adjustment – Contributions – Section 75(2) factors.

Legislation:

Family Law Act 1975 (Cth) ss.75(2), 79(1)(a), 79(2), 79(4)(a) - (c).

Applicant: MR TALLIS

Respondent: MS TALLIS

File Number: PAC 875 of 2014

Judgment of: Judge Newbrun

Hearing date: 11 May 2016

Date of Last Submission: 11 May 2016

Delivered at: Parramatta

Delivered on: 17 May 2016

REPRESENTATION

Solicitors for the Applicant: Mr Hawach

Solicitors for the Respondent: Mr Tasdemir

THE COURT ORDERS THAT:

1. The Wife pay the Husband the sum of $143,400 (“the sum”) within 8 weeks (“the time”).

2. That should the Wife fail to pay the Husband the sum within the time, the parties shall do all acts and things and sign all deeds, documents and instruments as may be necessary to list for sale and sell the property situated at Property D (“the Property D Property”) at a price as agreed between the parties and as a default agreement for a period in excess of 14 days at a price fixed to be a fair market value of the property by a valuer jointly appointed by the parties or in default of agreement by them, appoint on application by either of them, by the President or other senior office bearer for the time being of the NSW Division of the Australian Property Institute or its successors acting as an expert and not as an arbitrator. Upon completion, the parties shall, after adjustment for Municipal Council rates and Metropolitan Water Sewerage and Drainage Board rates, distribute the proceeds of sale as follows:

   (a)In discharge of any mortgage secured upon the Property D Property including the mortgage.

   (b)In payment of real estate agents’ commission, legal and other costs on the sale.

   (c)The balance to be paid:

   (i)$143,400 plus interest in accordance with the Family Law Rules to the husband; and

   (ii)The balance to the wife.

3. Simultaneously with Order 1 or 2, whichever is applicable, the Husband provide to the Wife a signed withdrawal of caveat in respect of the Property D Property.

4. That except as otherwise specified in these Orders, each party be declared the sole owner in law and equity of all items of property and financial resources presently in their respective names, possession or control and that this term shall be taken to include all superannuation entitlements and life insurance policies presently in their respective names.

5. Both parties shall do all acts and things and sign all documents necessary to give effect to these Orders.

6. If either party refuses or neglects to sign, within 14 days of a written request to do so, any documents necessary to effect the terms of these Orders, a Registrar or such other officer or person as may be appointed by the Federal Circuit Court of Australia at Parramatta is hereby appointed pursuant to the provisions of section 106A of the Family Law Act 1975 (Cth) to execute such documents on behalf of such party.

7. Liberty to apply in relation to any issue of implementation or enforcement of these Orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 875 of 2014

MR TALLIS

Applicant

And

MS TALLIS

Respondent

REASONS FOR JUDGMENT

Introduction

1. This was the Final Hearing of property proceedings between the husband born (omitted) 1979, now aged 36 years, and the wife born (omitted) 1984, now aged 31 years.

2. The parties married on (omitted) 2006.  They had one child, X, who was born on (omitted) 2010, now aged 6 years.

3. The parties separated on 21 January 2014.

Parties’ proposals

1. In relation to property settlement, the husband sought orders as set out in his Case Outline of 5 May 2016 (but amended orally at trial), to the effect that :

   a)the wife pay the husband the sum of $158,850 within 28 days;

   b)failing the wife paying the husband the above sum within the time, the parties shall cause the property (in the name of wife) at Property D (hereinafter referred to as “the property”), to be sold, and after discharging the mortgage and paying other relevant expenses, the balance is to be paid as to $158,850 plus interest to the husband, and the balance to the wife;

   c)Simultaneous with the above applicable order, the husband to provide the wife a signed withdrawal of caveat in respect of the above property; and

   d)otherwise, each party be declared the sole owner of all items of property and financial resources is presently in their respective names, including superannuation entitlements and life insurance policies.

2. In relation to property settlement, the wife sought orders as set out in her Case Outline dated 5 May 2016, to the effect that the wife retain the above property and that she pay the husband $30,000 and the husband to provide the wife a signed withdrawal of caveat in respect to the above property.

Material relied upon

1. The husband relied on his Affidavit filed 31 March 2016 and his Financial Statement filed the same date.

2. The wife relied upon her Affidavits filed 16 October 2015 and 5 May 2016 and her Financial Statement filed 16 October 2015.

3. Both parties were cross-examined.

4. The Court has had regard to the Affidavits, the oral evidence, the documents tendered in evidence and the submissions of the parties. 

Issues

1. The main issue dealt with in these property proceedings was the just and equitable alteration of the property interests of the parties.

Evidence

1. At the commencement of cohabitation in (omitted) 2006, the wife owned the property with a mortgage. She had purchased the property in about February 2005 for the sum of $238,500. The wife’s father paid the deposit being $23,850. The mortgage on the property at that time was $214,650. The wife also owned a motor vehicle which had been sold for $3,000. The husband, for his part, owned two motor vehicles valued in total at $25,000.

2. The above three motor vehicles were sold and their proceeds of sale were applied towards the purchase of a motor vehicle for the wife, being a Toyota RAV4. The Court notes that as at the trial date this motor vehicle was not owned by the wife.

3. In 2006 the husband was working as a (occupation omitted) trying to start his own business. This was not profitable, his work income was up and down and in early 2007 he commenced employment with (employer omitted) in (omitted) earning about $40,000 per year gross.

4. The parties’ respective employment incomes were quite similar, at least during the financial years 2009 to 2012 inclusive, except that during the 2011 financial year the wife’s employment income was substantially reduced as she had been on maternity leave: see Exhibits A and D. The wife’s income, according to the wife, increased in 2012 (she does not state the date in 2012) to $56,100 and then an increase in 2013 to $57,600 per annum. In the 2013 and 2014 financial years the husband’s taxable income was $39,855 and $38,472 respectively.

5. When the parties commenced their marriage they resided at a rental property in Property D, being a separate property to the property. The parties rented those premises until mid-2011 when they moved into the property. Before moving into the property, the wife would apply the rent from the property towards the payment of the mortgage secured against the property.

6. From the commencement of the parties’ relationship, they used their respective incomes to pay joint marital expenses (including rent, food and groceries, all other living expenses, including expenses relating to the child) and the mortgage and outgoings in respect of the property. The Court will now briefly elaborate upon the mechanics of how the parties did this.

7. Each of the parties had a bank account.

8. The mortgage repayments were paid from the wife’s bank account, being a (omitted) Bank Account (Exhibit C comprises various bank statements from that account between about 2010 and 2014). The husband made, during the relationship, various cash transfers from his bank account to the wife’s account (see Exhibit C). The bank statements from the wife’s account occasionally indicate the purpose of the husband’s cash transfers, including payment of utility bills, motor vehicle registration fees, strata fees for the property, the wife’s credit card and rental payments.

9. The husband, besides the above cash transfers to the wife’s bank account, also made withdrawals from his own bank account to pay the parties’ above living expenses.

10. In cross examination, the wife stated that the husband’s bank account was used to pay expenses for the child and occasionally grocery bills.

11. After the parties moved into the property, the husband effected certain renovations and improvements to the property, as set out in paragraph 18 of his Affidavit. These renovations and improvements included fully renovating a bathroom, timber floors to be replaced and sanded, built-ins, blinds, painting and tiling work. The husband paid about $15,000 towards materials and completing the renovations. The husband carried out certain renovation work himself and occasionally with assistance from friends and also had third parties carry out work. The husband also borrowed about $11,000 from a friend and his mother to enable him to complete the renovation work and these loans remain outstanding in the sum of $5,000.

12. The husband stated in his Affidavit that the above renovations and improvements to the property substantially increased its value, however there was no specific valuation or other evidence, expert or otherwise, in this context.

13. During the relationship, both parties cared for the child. The Court accepts paragraph 23 of the husband’s Affidavit in which he outlines his regular care of the child. Whilst the wife probably carried out the majority of household chores, the husband spent time with the child while she was doing these chores. The court does not accept the wife’s affidavit evidence to the effect that the husband did not help her with the rearing of the child.

14. The court finds that the parties overall made equal contributions to the welfare of the family under section 79(4)(c) of the Family Law Act 1975 (Cth) (“the Act”) during the relationship.

15. When the parties separated in January 2014, the wife and child moved out of the property and went to live with the wife’s parents. The husband remained living in the property (rent-free, although paying for utilities and making no financial contribution towards the mortgage, which latter payments, including rates in relation to the property, were made and continue to be made, by the wife; the Court notes that the mortgage repayments are usually between $1,300 and $1,400 per month), until about December 2014, when the wife and child moved back into the property. The husband then went to live with his brother and later rented properties on his own. He now pays $350 per week in rent.

16. Both parties are presently in paid employment.

17. The wife has been paying for the child’s day-care fees to the present time with no contributions being made by the husband until late 2014. The Court notes from Exhibit C, during the period from 1 January 2014 to 30 June 2014, the husband made one bank transfer being “support for X” (the child) in the sum of $250.

18. Following cross-examination of the wife, it became apparent that there were some factual inaccuracies in the wife’s affidavits. In cross-examination, initially, the wife disputed that the husband paid each month a sum into her bank account to assist with various marital expenses. The wife was then cross-examined about certain of the contents of Exhibit C, being her bank statements. The wife conceded that paragraph 3 of her second Affidavit was untrue when it stated that the husband did not pay “any of these bills”, being a reference to expenses including strata and utility bills. In the context of the wife’s assertions in her affidavits that the husband made no contributions towards the mortgage repayments on the property, the Court notes that there is no reference in her affidavits to the husband’s cash transfers from his bank account to the wife’s bank account (Exhibit C). Where there is any conflict in the evidence between the parties, the Court prefers the husband’s evidence, in the absence of confirmatory documentary evidence.

Discussion

Property adjustment

1. Pursuant to section 79(1)(a) of the Act, in property settlement proceedings, the Court may make such order as it considers appropriate, in the case of proceedings with respect to the property of the parties to the marriage or either of them, altering the interests of the parties to the marriage in the property. Such order may include an order requiring either or both of the parties to the marriage to make, for the benefit of either or both of the parties to the marriage, such transfer of property as the court determines.

2. The Court, in determining property proceedings, should firstly identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property that is available for distribution between them. The Court should then determine whether it is just and equitable to make an order altering the parties’ interests in such property. If the Court is satisfied that it is so just and equitable, the Court should then consider the contributions made by each of the parties pursuant to section 79(4) of the Act before looking at their future needs by reference to the factors set out under section 75(2) of the Act.

Balance sheet-parties’ contentions

1. The parties’ agreed balance sheet was filed on 5 May 2016. There was only one agreed alteration to that balance sheet and that was the current mortgage balance being $181,000.

2. As to the husband’s personal loan debts of $5,000 (relating to his renovation work to the property) and his credit card debt of $3,000, neither party submitted that these debts should not be categorised as marital debts.

3. Assets:

Ownership	Item	Agreed value
Wife	Property at Property D	$525,000
Wife	Bank account (omitted)	Unknown
Wife	Holden (omitted)	$4,000
Husband	(omitted) Bank Accounts x 2	Minimal
Husband	Household contents	$1,000
Wife	Household contents	Unknown
TOTAL	$530,000

1. Liabilities

Ownership	Item	Agreed value
Wife	Mortgage	$181,000
Husband	Personal Loan – Mr A	$4,000
Husband	Personal Loan – Mr N	$1,000
Wife	(omitted) Mastercard	Unknown
Husband	Credit Card	$3,000
TOTAL	$189,000

1. Superannuation:

Member	Name of Fund	Agreed value
Husband	(omitted) Super ((omitted))	$17,386
Wife	Group Super ((omitted))	$13,000
TOTAL	$30,386

1. At trial date, the Court finds the parties had the following net assets and superannuation entitlements:

   a)Net assets - $341,000;

   b)The parties’ superannuation entitlements are:

   i)Husband - $17,386; and

   ii)Wife - $13,000.

Section 79(2) of the Act

1. The Court is satisfied that it is appropriate in this case to alter the property interests of the parties in light of the breakdown of their marriage, the fact that they will no longer have the joint use and enjoyment of the property and that the continuance of the current legal ownership of the property would not afford them justice and equity. The parties join in seeking orders for property adjustment.

Contributions

1. The parties’ relationship was a little over 7 years.

2. The husband came into the relationship with motor vehicles worth $25,000. The wife at about that time had an equity in the property in the sum of about $27,124.

3. Again, and as discussed above, during the parties’ cohabitation, the Court finds that the parties utilised their respective incomes to pay for the various marital expenses, including mortgage repayments and other outgoings for the property. Apart from the husband’s renovation and improvement work to the property (see immediately below), the parties contributions under sections 79(4)(a) and (b) should be regarded as equal.

4. The Court takes into account the husband’s renovation and improvement work to the property as a modest adjustment in his favour. However, neutralising this modest adjustment, the Court takes into account the wife’s payment of the mortgage and other outgoings on the property post-separation to December 2014, noting that the husband lived rent-free in the property for some 10 months following the final separation. The Court notes that following the wife and child moving back in to the property in December 2014, the husband, apart from living with his brother for a few months, had to secure rental accommodation.

5. The Court finds that the parties overall made equal contributions to the welfare of the family under section 79(4)(c) of the Act, during the relationship.

6. Contributions, accordingly, should be assessed as 50% to the husband and 50% to the wife.

Section 75(2) factors

1. The wife is aged 31 years and the husband 36 years.

2. Neither party submits there are relevant health issues. Both parties are in paid employment; the wife works as an (occupation omitted) and the husband as a (occupation omitted). Their respective incomes are comparable. Neither party submitted that there was a significant disparity in the income earning capacity of the parties which should be taken into account.

3. The child of the relationship will remain in the wife’s primary care which should be taken into account noting the child is aged only 6 years. The Court notes that the husband, pursuant to agreed parenting orders of the Court, will spend time with the child for some 5 nights out of 14, together with half of all school holidays and other special occasions. The husband’s Financial Statement indicates that he is paying $16 per week for child support. The Court notes the wife’s evidence that the husband’s child related contributions, post-separation, did not commence until late 2014 (the Court notes that it has identified one bank transfer from the husband’s bank account to the wife’s bank account of $150 on 4 August 2014 for medicine for the child). The Court notes the wife is presently paying $185 per week for childcare expenses. In the circumstances, there should be a 10% adjustment in favour of the wife, which results in a disparity of some $68,200 between the parties, excluding superannuation entitlements.

4. The wife states that she receives a Family Tax Benefit of $140 per week.

5. In consideration of the above matters and doing the best it can, the Court makes an adjustment in favour of the wife of 10%, pursuant to section 75(2) of the Act. Such an adjustment to the previous contribution findings results in a property adjustment of 60% in favour of the wife and 40% to the husband.

Justice and equity

1. The parties’ superannuation entitlements as at trial are fairly comparable; the wife’s entitlement is some $13,000 and the husband’s entitlement is some $17,386. Neither party seeks a superannuation split. There is no relevant evidence before the Court as to the history of the parties’ accumulation of their respective superannuation entitlements. In the circumstances, justice and equity does not require that the parties’ present respective superannuation entitlements be disturbed.

2. On the basis that the wife retains the property, and associated mortgage, a net $344,000, and her car, $4,000, she will have $348,000 plus her superannuation of $13,000. The wife’s 60% share of the net assets ($341,000), excluding superannuation, amounts to $204,600. Thus she should be required to pay the husband $143,400. Should she be unable to make this payment to the husband within 8 weeks then the property should be sold to enable the payment to be made.

3. The husband will retain his household contents of $1,000, the $143,400 payment from the wife, less debt of $8,000, leaving him with $136,400, plus his superannuation of $17,386.

1. In the circumstances of this case, and for all the reasons set out above, the Court considers that the orders proposed to be made will produce a just and equitable result as between the parties.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Judge Newbrun.

Date:     17 May 2016