Taplin & Hadley
[2024] FedCFamC2F 626
•23 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Taplin & Hadley [2024] FedCFamC2F 626
File number(s): ADC 684 of 2023 Judgment of: JUDGE DICKSON Date of judgment: 23 May 2024 Catchwords: FAMILY LAW – PROPERTY – Final hearing – Relationship of over 14 years – Where the parties share care of the two children of the relationship – Whether the Court should approach the property division on a one-pool or a two-pool basis – Dispute as to contributions – Consideration of section 75(2) factors – Where the parties’ joint enterprise in commencing unfinished renovations on the former matrimonial home has resulted in a negative financial contribution to the value of the former matrimonial home – Where the wife seeks for the former matrimonial home be sold and to be sole signatory for its sale – Where the husband opposes the sale and seeks to retain the property – Justice and equity – One pool approach adopted – Orders for a 65/35 per centum division in favour of the wife. Legislation: Evidence Act 1995 (Cth) s 140.
Family Law Act 1975 (Cth) ss 75, 79, 106A.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 5.01, 15.06.
Cases cited: Babette & Falconer [2015] FamCAFC 124
Bevan & Bevan (2013) FLC 93–545
Bolger & Headon [2014] FamCAFC 27
Browne & Green [1999] FamCA 1483
Calder & Calder [2016] FamCAFC 36
Candlish & Pratt (1980) FLC 90-819
C & C (2005) 33 Fam LR 414
D & D [2003] FamCA 473
Dickons& Dickons (2012) 50 Fam LR 244
Dovgan & Dovgan [2021] FamCA 306
Ferraro & Ferraro (1992) 16 Fam LR 1
Fields & Smith [2015] FamCAFC 57
Fox & Percy (2003) 214 CLR 118
Garrett & Garrett (1984) FLC 91-539
Hayton & Bendle [2010] FamCA 592
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Housing Commission of New South Wales v Pastoral Company Pty Ltd [1983] 3 NSWLR 378
In the Marriage of Kowaliw [1981] FamCA 70
Jabour & Jabour [2019] FamCAFC 78
L & L [2003] FamCA 40
MacKinnon & Talbot [2023] FedCFamC1A 156
Marcon & Cussen [2017] FamCAFC 150
McBurney & Reddy [2013] FCCA 395Norbis & Norbis (1986) FLC 91-712
Perrin & Perrin (No 2) [2018] FamCAFC 122
Russell & Russell (1999) 25 Fam LR 629
Russo & Wylie (2016) FLC 93-747Stanford & Stanford [2012] HCA 52
Steinbrenner& Steinbrenner [2008] FamCAFC 193
Tomlin & Nilsen [2011] FMCAfam 166
U & U [2002] HCA 36
Woodcock & Woodcock (1997) FLC 92-739
Yellin & Temple [2013] FCCA 360Division: Division 2 Family Law Number of paragraphs: 176 Date of hearing: 27 and 28 March, 11 April and 3 May 2024 Place: Adelaide Counsel for the Applicant: Mr K. Tredrea Solicitor for the Applicant: All Family Law Counsel for the Respondent: Ms V. Lee Solicitor for the Respondent: Fleurieu Lawyers ORDERS
ADC 684 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS TAPLIN
Applicant
AND: MR HADLEY
Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
23 MAY 2024
THE COURT ORDERS THAT:
1.Within sixty (60) days of this Order, the husband do pay to the trust account of All Family Law for and on behalf of the wife the sum of $226,368 (‘the settlement sum’).
2.Contemporaneously with the payment of the settlement sum, the parties shall do all such acts and things to:
(a)Transfer the property situate at B Street, Town C in the State of South Australia (‘the Town C property’) being the whole of the land comprised and described in Certificate of Title Register Book Volume … Folio … into the sole name of the husband; and
(b)Discharge the mortgage in favour of the D Bank and the husband shall refinance the loan into his sole name.
3.If the husband fails to comply with paragraphs 1 and 2 herein, then within ninety (90) days of this Order, the husband shall vacate the Town C property and the parties shall do all things necessary to place the Town C property on the market for sale subject to the following conditions:
(a)The selling agent shall be agreed in writing and failing agreement within seventy-five (75) days of this order it shall be such selling agent as nominated by the Secretary of the Real Estate Institute of South Australia; and
(b)The terms and conditions of the sale including the sale price and the mode of sale shall be agreed in writing.
4.The parties shall follow the advice provided by the nominated selling agent from time to time including but not limited to the mode of sale, conditions of sale, any offers to purchase and any repairs or improvements required to the Town C property prior to sale.
5.The parties shall be jointly responsible for the costs of selling the said Town C property including but not limited to any gardening or housecleaning services recommended by the nominated selling agent.
6.Upon sale of the said Town C property, the proceeds of sale shall be disbursed as follows:
(a)To discharge the D Bank mortgage (Account Number …);
(b)To pay all sales costs and commissions;
(c)A sum representing 65% per centum of the parties’ net superannuation and non-superannuation assets to the wife; and
(d)A sum representing 35% per centum of the parties’ net superannuation and non-superannuation assets to the husband;
WHERE:
A.= the net assets retained by the wife – ($364,114);
B.= the net assets retained by the husband – ($48,521);
C.= the net proceeds of the sale of the Town C property;
D.= AND WHERE A+B+C = I;
E.The wife shall receive a sum equal to (I x 65%) – A; and
F.The husband shall receive a sum equal to (I x 35%) – B.
7.The wife do retain as her sole property the following:
(a)Her motor vehicle being Motor Vehicle 1;
(b)Her personal savings;
(c)Her superannuation entitlements;
(d)Her long service leave entitlements;
(e)Her furniture and effects; and
(f)All other property in her possession and control.
8.The husband do retain as his sole property the following:
(a)His motor vehicle being Motor Vehicle 2;
(b)His personal savings;
(c)His financial resource;
(d)His superannuation entitlements;
(e)His furniture and effects; and
(f)All other property in his possession and control.
9.Within twenty-eight (28) days of this Order the parties do all such things and sign all such documents necessary to:
(a)Transfer the registration of Motor Vehicle 2 into the sole name of the husband; and
(b)Close their joint account with D Bank.
10.Pursuant to section 106A of the Family Law Act 1975 (Cth), in the event that any party should fail, refuse or neglect to execute any document necessary to implement the terms of these orders, then upon proof of such failure, refusal or neglect by affidavit, a Judicial Registrar or Deputy Registrar of this Honourable Court is hereby authorised to execute any such document on behalf of the defaulting party.
11.The parties have liberty to apply in relation to the sale of the Town C property and calculation of the monies to be paid to each party from the sale to produce a 65% / 35% per centum adjustment between them.
12.All extant applications are hereby dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON:
INTRODUCTION
The Applicant Wife, Ms Taplin (‘the wife’) and the Respondent Husband, Mr Hadley (‘the husband’) are in dispute as to the division of their matrimonial property after a relationship of 16 years.
Whilst the asset pool is largely agreed, the parties each seek different findings in respect of their contributions and any adjustment pursuant to section 75(2) of the Family Law Act 1975 (Cth) (‘the Act’). Central to the dispute between them is whether the husband should be afforded an opportunity to retain their former matrimonial home or whether the home should be sold. The reality is that after a long relationship which produced two children, this is a case involving a modest asset pool which is insufficient to provide both parties with a comfortable standard of living and housing at their respective stages of life.
These are the Courts reasons following a Trial between the parties concerned.
BACKGROUND
The wife is aged 52 years. The husband is aged 53 years.
The parties commenced cohabitation in 2006 and married in 2007.
The parties separated on a final basis in early 2022 and divorced in mid-2023.
There are two children of the relationship, namely X born in 2010 and Y born in 2012. The parties have a shared care arrangement for the two children. The wife has one adult child from a previous relationship named E, who was three years of age at the time the parties commenced cohabitation.
In mid-2006, the parties jointly purchased the former matrimonial home at B Street, Town C in the State of South Australia (‘the Town C property’).
Following separation, the parties continued to live separated under one roof until mid-2022 when the wife moved out of the Town C property.
At Trial, the husband seeks to retain the Town C property. The wife seeks that it be sold, that the husband vacate the property and that she have sole control over the terms of sale.
The parties are also in dispute as to the percentage division of their assets to achieve a just and equitable outcome.
DOCUMENTS RELIED UPON
The wife filed an Outline of Case Document on 21 March 2024 which sets out at ‘Part B’ that she relies upon the following documents:
(1)Amended Initiating Application of the wife on 26 February 2024;
(2)Trial Affidavit of the wife filed 26 February 2024; and
(3)Financial Statement of the wife filed 26 February 2024;
At Trial, the wife’s counsel also relied upon the following further documents:
(1)Affidavit in Reply of the wife filed 25 March 2024;
(2)Rule 12.06 Costs Notice filed 20 March 2024;
(3)Written submissions filed 1 May 2024; and
(4)Affidavit of Ms F filed 15 May 2024.
The husband filed an Outline of Case Document on 21 March 2024 which sets out at ‘Part B’ that he relies upon the following documents:
(1)Financial Statement of the husband filed 18 March 2024;
(2)Affidavit of the husband filed 20 March 2024;
(3)Rule 12.06 Costs Notice filed 20 March 2024.
At Trial, the husband’s counsel also relied upon an Amended Response to Initiating Application being ‘Exhibit H4’ and Written submissions filed 2 May 2024.
EXHIBITS TENDERED AT TRIAL
The wife tendered Exhibits W1 to W6.
The husband tendered Exhibits H1 to H6.
ORDERS SOUGHT AT TRIAL
In her Amended Initiating Application filed 26 February 2024, the wife sought final orders as follows:[1]
[1] At Trial, the wife orally made amendments to her final orders sought which are incorporated herein.
1.That within 30 days the husband vacate the property at [B Street, Town C] and the husband be restrained and an injunction granted restraining the husband from returning to the said property without the wife's prior written consent.
2.That in full and final settlement of all property matters between the parties that there be a property division of the non-superannuation assets in favour of the wife 70/30.
3.That the 70/30 division of non-superannuation property be achieved as follows:
a.That the wife be deemed the sole signatory necessary for the property at [B Street, Town C] to be placed on the market for sale by way of private sale with [G Company] with a reserve price of $[570],000.00
b.That within 30 days the wife being the sole signatory sign and do all things necessary for the sale of the said property and discharge of the mortgage and all other documentation required for the said sale of the property.
c.That following the settlement of the sale of the property the proceeds of sale following the payment of the sale costs, commission, transfer fees, discharge of mortgage, be distributed as follows:
i.70% payable to the wife by way of transfer to All Family Law Trust Account;
ii.30% payable to the husband by way of transfer to Fleurieu Law Trust Account or such other account as the husband’s solicitor directs.
4.That $54,000 of the wife's superannuation from prior to the relationship be kept out of the superannuation split and otherwise there be a superannuation split equalising the superannuation interests between the parties.
5.That the respondent pay the applicant's costs herein.
6.Such further or other order this Honourable Court deems fit.
In his Amended Response to Initiating Application filed 27 March 2024, the husband sought final orders as follows:[2]
[2] The husband’s counsel did not seek to orally amend Notation B to record the agreed valuation from [J Company] dated [early] 2024 at $575,000 nor to include any of the notations as orders.
A. UPON NOTING:
B. The agreed value of the property situates at [B Street, Town C] in the State of South Australia Registered Certificate of Title […] Folio […] (“the property") pursuant to the valuation undertaken by [H Company] [in early] 2024 is $[560],000.00.
C. After payment of the [D Bank] mortgage […]. the remaining funds of $485,00.00 form the basis of the non-superannuation assets of the relationship.
D. There be a division of the non-superannuation assets as set out in notation B herein as to 60% to the husband and 40% to the wife.
E.The husband provides written confirmation of approval of the required funds through [K Company] to pay out the 40% calculated lump sum (minus the wife's current assets held in her possession) and with the release of the required funds through the [K Company] loan being contingent on a sealed Court Order.
F. The parties have agreed to a split of superannuation between them as to a sum of TWO HUNDRED and TWENTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($227,500.00) (being 65 percent) to the wife and ONE HUNDRED AND TWENTY TWO THOUSAND FIVE HUNDRED DOLLARS ($122,500.00) (being 35 percent) to the husband).
1. That in full and final settlement of all claims either party may have against the other for settlement of property or variation of property interest either in the past, present of future and to give effect to the mutual intention of the parties to release the other from any claim either may have against the other pursuant to Part VIII and Part VIIB of the Family Law Act 1975:
1.1. That within 30 days from the date of this Order herein the husband shall pay the wife with a lump sum payment of ONE HUNDRED and NINETY FOUR THOUSAND DOLLARS ($194,000.00)
1.2. Contemporaneously with the payment set out in paragraph 1.1 herein, the husband shall discharge the [D Bank mortgage …] and refinance any further mortgage into his sole name, with the wife to sign all documents and so all things necessary for the Title of the property to be transferred into the sole name of the husband, with any associated costs incurred in the release of the title to be borne solely by the husband.
1.3. Thereafter the husband with therein retain all of his estate and interest in the property situate at [B Street, Town C] in the State of South Australia Volume: […] Folio […] (‘the property’) and contemporaneously with the payment as per paragraph 1.1. herein, the husband do indemnify the wife and keep her forever indemnified with respect of all taxes, rates and other outgoings arising with respect to the property and he do keep her forever indemnified with respect to the same.
2. In default of the husband failing to satisfy payment to the wife as set out in paragraph 1.1 herein:
2.1. The property be sold forthwith with the reserve price set at $[560],000.00.
2.1.1. The agent engaged to sell the property be [G Company].
2.1.2.Both parties follow all such reasonable direction from the nominated real estate agent as to preparation for the sale of the property.
2.1.3.Both parties be jointly responsible the costs of selling the property, and for the hiring of gardening and house cleaning services to prepare the property for sale.
2.1.4.That the husband and children reside in the home for the duration of the sale period, with a minimum 6 week settlement period in which to find alternative accommodation.
2.1.5.Upon completion of the sale of the property the proceeds shall be distributed in the following manner and priority:
2.1.5.1. In satisfaction of agent's fees, marketing fees and the like;
2.1.5.2. Rates, taxes utilities and levies then outstanding;
2.1.5.3.Such sum as to satisfy the amount owing on the [D Bank mortgage] account number […]
2.1.5.4.The wife receive a lump sum payment of ONE HUNDRED and NINETY FOUR THOUSAND DOLLARS ($194,000.00)
2.1.5.5. The remaining balance then to the husband.
3.There being no other order as to the matrimonial assets and/or liabilities, these orders shall determine the parties' financial relationship on a final basis.
4.In the event Husband pays the sum of $194,000.00 to the wife either pursuant to Order 1 or 2 herein, the Wife shall sign all documents and do all things necessary to cause the transfer of the Property into the Husband's sole name, and the costs if any associated to that sale shall be the Husband's to bear.
It can be seen from the husband’s Amended Response, as set out above, that he did not actually seek a superannuation splitting order. Rather, he recorded a proposed superannuation splitting order as a notation. The husband’s counsel did not address the Court as to the drafting in her client’s application.
PROCEDURAL HISTORY
On 16 February 2023, by way of Initiating Application the wife commenced proceedings for property settlement. By way of a Response to Initiating Application, the husband sought orders with respect to property settlement, and included orders with respect to parenting issues.
Parenting issues were finalised by consent on 30 August 2023.
On 26 July 2023, the parties attended a Conciliation Conference and reached agreement. A Judicial Registrar made orders by consent in relation to all matters save for those relating to superannuation pending procedural fairness on the trustee of the wife’s fund.
The consent orders made on 26 July 2023 were recorded as being made ‘by way of partial property settlement.’ The orders required, inter alia, for the husband to obtain preapproval to refinance in the sum of $280,000 by late 2023. Should this occur then the husband was to pay to the wife a settlement sum and to discharge the existing joint mortgage into a mortgage in his sole name. If the husband did not obtain preapproval in the sum required, the Town C property was to be sold and the proceeds divided in the manner agreed.
On 29 September 2023, after receipt of the outstanding superannuation procedural fairness documents, final orders were made by consent in relation to superannuation only by a Judicial Registrar in Chambers. The orders provided for the husband to receive a superannuation split from the wife. The orders did not restate the “partial property settlement” orders made on 26 July 2023. Paragraph 2 of the consent order provided that all other applications for property matters were dismissed.
The husband did not obtain preapproval as required by the orders made 26 July 2023. He refused to cooperate in the sale of the Town C property. The wife subsequently did not act to implement the superannuation orders made 29 September 2023. The parties were at a standstill.
On 19 October 2023, the wife filed an Application in a Proceeding seeking to enforce the previous partial property settlement orders made by consent on 26 July 2023.
At hearing on 8 November 2023, the Court raised with the parties the impact and effect of rule 5.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘the Rules’) which provides:
5.01 Effect of final orders on interlocutory orders
On the making of final orders in a proceeding, any interlocutory order made in the proceeding pending further order is automatically discharged and ceases to have continuing effect.
Further, the Court sought submissions as to whether or not the Court was functus officio with all property applications having been dismissed.
These important threshold issues were overcome when on 6 February 2024, the wife filed an application to review the final orders made by the Judicial Registrar on 29 September 2023 and sought leave pursuant to rule 15.06 of the Rules to proceed with her application out of time.
On 9 February 2024, the Court made orders by consent in terms of the wife’s Application for Review and set aside the orders made on 29 September 2023. By consent, the parties final order applications filed 16 February 2023 and 21 April 2023 were reinstated and the competing applications were listed for Trial.
No objection was made to the Trial proceeding before me in circumstances where the Court was cognisant of the parties’ previous property settlement agreements. Self-evidently, the case involved a modest asset pool, the parties were legally represented and keen to resolve the matter. The impasse had to be resolved to enable the parties to move on with their lives. I consider the approach taken by them was a sensible one in the circumstances.
In any event, the parties’ previous agreements do not oust the jurisdiction of the Court to make orders under section 79 of the Act.[3]
[3] Candlish & Pratt (1980) FLC 90-819; Woodcock & Woodcock (1997) FLC 92-739.
ISSUES IN DISPUTE
The issues in dispute at Trial can be summarised as follows:
(1)What weight should be attached the wife’s initial financial contribution at the commencement of the marriage;
(2)What adjustments should be made arising from the parties’ respective financial and non-financial contributions during their marriage;
(3)What adjustment should be made in favour of the husband on account of section 75(2) factors;
(4)Do considerations of justice and equity dictate that the Town C property be sold so as realise each party’s contributions in dollar terms?;
(5)Would the sale of the Town C property result in unfairness to the husband? In other words, in circumstances where the husband has minimal prospects of acquiring alternative accommodation, should the Court countenance its sale in determining what is just and equitable;
(6)If the Court finds that the Town C property is to be sold, should the husband vacate the Town C property prior to sale and should the wife be appointed sole trustee for its sale of the Town C property; and
(7)In what percentage should there be a superannuation splitting order made in favour of the husband (if any) and whether or not there should be a ‘carve out’ of the wife’s initial superannuation contribution of $54,000.
EVIDENCE
In these Reasons for Judgment, findings of fact are made on the balance of probabilities based on the demeanour and evidence of each of the parties.[4] I am not required to refer to every piece of evidence nor refer to each argument or submission relied upon by the parties.[5] I have endeavoured to reach my conclusions on credit on the basis of contemporary materials, objectively established facts and on the apparent logic of events.[6]
[4] Evidence Act 1995 (Cth) s 140.
[5] Housing Commission of New South Wales v Pastoral Company Pty Ltd [1983] 3 NSWLR 378, 385-386.
[6] Fox & Percy (2003) 214 CLR 118, [31].
THE PARTIES
By way of initial contribution, the wife introduced to the marriage equity in an investment property on L Street, Suburb M in the State of South Australia (‘the Suburb M property’) purchased by her in 2005. The wife also had personal savings in the sum of $108,370 and superannuation entitlements as of 1 July 2006 in the sum of $54,024.77.
In mid-2006, the parties purchased the Town C property for $290,000 plus sale costs and commenced cohabitation. The purchase was funded by way of the wife’s savings in the sum of $75,000 and the balance borrowed by way of joint mortgage with D Bank.
The Suburb M property was rented from mid-2006 after the parties commenced cohabitation. I accept the wife’s evidence that the rent paid for the mortgage and that other expenses for the Suburb M property were met by her. The Suburb M property was sold in early 2009 with the wife receiving net proceeds in the sum of $132,330.00 and which she contends was applied to reduce the mortgage secured over the Town C property.
The husband did not dispute that the wife had made a significant initial financial contribution to the marriage.
The husband agreed that the wife contributed $75,000 upon the purchase of the Town C property but stated that the wife paid $103,000 into the Town C property upon the sale of her investment unit, being the Suburb M property.[7] Although the parties were in dispute as to the actual sum paid towards the mortgage over the Town C property upon the sale of the Suburb M property, the husband agreed under cross-examination that the net sum received by the wife at sale was $132,330 (rounded down). The difference in the parties’ position is that the husband does not concede that a further sum of $31,000 was paid off the mortgage as asserted by the wife.[8] To my mind and in the absence of any suggestion by the husband that the wife had somehow misappropriated the “missing” $31,000 (of which there were none), it does not much matter.
[7] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 21.
[8] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 3.
In his oral evidence, the husband agreed that the wife had contributed at a minimum the sum of $178,000 between the period 2006 and 2009 to the Town C property.
The husband currently receives a Disability Pension and has been since the commencement of the relationship. The wife agrees that the D Bank mortgage was repaid from regular payments made from the husband’s Disability Pension, Family Tax Benefits, and her salary.
The wife concedes that at the start of their relationship the husband worked as self-employed tradesperson. The wife further agrees that the husband worked casually as a professional between 2009 and 2015. During this period, the parties contributed greater than the minimum monthly repayments to the mortgage.[9]
[9] See the Affidavit of Ms Taplin filed 26 February 2024 at paragraph 35.
The husband concedes that the wife had superannuation in the sum of $54,000 at the date of marriage.[10] The husband also conceded under cross-examination that in 2006, his superannuation balance was negligible and describes cashing out his superannuation before 2006 to pay for his surgery in 2018.
[10] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 21.
The husband acknowledges that his savings and assets at the date of marriage were modest in comparison to that of the wife. The husband ascribes the reason for this as the medical condition that he had been living with since he was 17 years of age. He asserts this disease impacted on his quality of life, his ability to be employed and his ability to accrue savings.[11]
[11] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 13.
The husband’s history of chronic poor health was not in dispute. The wife agreed that the husband has had serious health issues since he was a teenager culminating in the husband being diagnosed with a medical condition in or around 2014. The wife acknowledged that in 2006, the husband ceased manual work due to his poor health and concentrated on his professional business and remained at home.[12]
[12] See the Affidavit of Ms Taplin filed 26 February 2024 at paragraph 33.
The husband conceded that there were periods during the relationship when he was so unwell that he did not work at all.[13] The husband’s taxable income from 2010 to 2023 was provided at Trial in a bundle of Notices of Assessment, marked ‘Exhibit H6’. The yearly breakdown of the husband’s taxable income in this period is as follows:
[13] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 14.
Financial Year Taxable Income Financial year ending 30 June 2010 $7,946 Financial year ending 30 June 2011 $0 Financial year ending 30 June 2012 $0 Financial year ending 30 June 2013 $12,433 Financial year ending 30 June 2014 $24,805 Financial year ending 30 June 2015 $18,624 Financial year ending 30 June 2016 $20,600 Financial year ending 30 June 2017 $14,430 Financial year ending 30 June 2018 $0 Financial year ending 30 June 2019 $0 Financial year ending 30 June 2020 $0 Financial year ending 30 June 2021 $6,206 Financial year ending 30 June 2022 $1,850 Financial year ending 30 June 2023 $10,317
The husband argued that even when he was too unwell to work, he continued to be the primary carer for all three of the children and to be primarily responsible for house cleaning and garden maintenance.[14]
[14] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 27.
The wife agreed that the husband undertook “outdoors” work and gardening but maintained that she also assisted in the outside chores.
The wife worked as a professional throughout the relationship, employed by N Company and where she has remained employed to date.
After a period of maternity leave following the births of their two children, the parties agree that the wife returned to employment.
The wife acknowledges that the husband assisted in household duties including caring for the children and collecting E from childcare and school. The wife asserts that she was the primary carer of the children and responsible for most of the household chores in addition to working in paid employment during the entirety of the relationship.[15] It is the wife’s case that the preponderance of this nonpaid labour fell to her due to the husband’s ill health.
[15] See the Affidavit of Ms Taplin filed 26 February 2024 at paragraph 58.
It is agreed that the wife was historically the manager of the parties’ joint finances and ensured the payment of household accounts. The parties operated a joint account into which their respective incomes were paid. The parties utilised a joint credit card which the wife cross-checked at the end of each month against the provision of hard copy receipts. I reject the husband’s assertion that this made the wife “financially controlling.” Rather, the wife was closely monitoring the household budget for which she should not be criticised given their limited income.
X attended childcare from 2012 to 2015. Y attended childcare from 2014 to 2016. The children eventually attended childcare for two days per week being the same days when the wife was at work. Both children attended after-school hours care once they commenced at O School. The parties were assisted in the care of the children by the wife’s parents.
The wife admits that after being diagnosed with a medical condition in 2014, the husband had “constant flare ups” and acknowledges that the husband was urged by his medical advisors to consider surgery rather than being reliant on drug interventions and treatment.[16] The husband took “strong prescription painkillers for a long time” and that the husband also had “times when his illness was very bad he could not do anything.”[17] The wife acknowledges that in 2015 the husband continued to experience significant health problems and was hospitalised in early 2015 following a medical emergency. The wife’s Affidavit sets out in graphic detail the problems confronting the husband for most of the marriage because of his chronic medical condition.
[16] See the Affidavit of Ms Taplin filed 26 February 2024 at paragraph 74.
[17] See the Affidavit in Reply of Ms Taplin filed 25 March 2024 at paragraph 5.
In 2018, the husband underwent major surgery which he describes having “dramatically improved my health and ability to function each day.”[18] The wife describes the surgery as a “huge success” and that after recovery from surgery the husband’s symptoms dissipated. The wife states that the husband has had no major health problems since 2018.
[18] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 15.
The wife acknowledges that prior to surgery in 2018, there was “significant management” of the husband’s disease including trial medication, treatments and surgical appointments. The wife assisted to care for the husband during these events. On several occasions, the husband required ambulance attendance or hospitalisation due to his illness and from failed surgical procedures. The wife acknowledges that these admissions included multiple treatments and Intensive Care Unit admissions. Such was the seriousness of the husband’s health complaints that the husband almost lost his life on multiple occasions during the relationship.
The husband describes suffering from depression and anxiety after the surgery between 2019 and 2020. The wife acknowledges that the husband suffered with depression and anxiety after the 2018 surgery and was prescribed anti-depressant medication for a short time. Despite her stress and anxiety, the wife has continued to work.
The wife gave evidence that she has suffered stress and anxiety because of these proceedings. Immediately following separation, the wife was prescribed anti-depressants which she took for 12 months. The wife gave evidence that she intends to use her long service leave entitlements following Trial for a period of six months at half-pay or thereabouts to recover.
In 2010, the parties agreed to undertake renovations to the Town C property. The parties employed a licensed builder to assist with structural work but otherwise, did the renovations themselves. At the date of Trial, the Town C property remained unfinished in several areas of the home including the kitchen and outdoor areas.
As part of the renovations, the parties altered the floorplan of the home from a small home to a larger home in 2017. The wife alleges that the renovations are not consistent with the building approval and further, that she is unaware of there having been any progress reports or completion certificates undertaken. Eventually, the wife acknowledged in her evidence that she provided input into the building plans which were submitted to council.
It is the husband’s position that the parties agreed the rebuilding and collaborated on the design of the Town C property.[19] Further, that the parties always discussed and agreed any variations to the plans.
[19] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 40.
The wife assisted the husband in demolition and clearing of areas under renovation, and with “other construction and finishing including ceiling, cornices and painting.”[20]
[20] See the Affidavit of Ms Taplin filed 26 February 2024 at paragraph 54.
The wife acknowledges that because of the unfinished state of their renovations, the property remains partially complete. In her Affidavit filed 25 March 2024, the wife complains about the state of the Town C property and provides a litany of problems including:
[extensive list of renovations to be done to the house].[21]
[21] See the Affidavit in Reply of Ms Taplin filed 25 March 2024 at paragraphs 29 to 39 inclusive.
The wife agrees that the husband has been renovating during their 16-year marriage but complains that there are very few areas of the house that are finished.
In her oral evidence, the wife blamed the husband for the fact that the Town C property had not increased in value since its purchase in 2006.[22] When asked if she considered herself to be equally responsible for the decrease in value, the wife conceded that she had agreed for the husband to undertake the renovations for the past 15 years. The wife accepted that prior to 2018 the husband’s ill-health may have made renovations difficult. She complained that since the successful medical intervention in 2018, the husband had undertaken very limited work contrary to their agreement.
[22] The parties agree council rates provides for a value of $700,000 and that the joint valuation provides for a
As the husband’s health improved, he maintained that the wife “wanted me to do the renovations” rather than engage in paid employment. The husband stated:
My main responsibility was to keep working on the expansion of the property, however there was a continual shortage of funds and there were occasions when work had to cease while we saved for materials. My health was also a source of ongoing concern and there were times when I needed to rest instead of working,[23]
[23] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 5.
The husband describes having “rebuilt” the parties’ entire house “internally and externally as it stands today.”[24] The husband also describes having undertaken work in “constructing the outdoors areas, fencing, retaining walls and landscaping.”[25]
[24] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 32.
[25] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 32.
It is the husband’s opinion that his labour around the home over the parties’ 16-year relationship “…would easily be valued at over $350,000 and can be directly attributed to the increase of the value of the property.”[26] The Court is unable to place any weight on the husband’s self-assessment as to value.
[26] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 33.
The wife now seeks to be sole signatory for the sale of the home alleging that if such an order is not made, the husband is unlikely to be cooperative. The wife seeks an order that the husband vacate the Town C property and that she has sole capacity to arrange its sale without consultation to the husband.
The husband opposes the wife being appointed as sole signatory for the sale if the Town C property is to be sold. The husband considers that the wife will not use her best endeavours to “get the best price” and that she may sell the property to a family member “on the cheap”.
It was put to the wife in cross-examination that she now wanted to see the property sold and opposed the husband having the opportunity to retain the property in his own right. The wife explained that she had initially wanted the husband to purchase the property but after he was unsuccessful in securing finance, she now considered that she had been waiting “a long time” and that she “wanted the matter over”. If the Town C property is sold, the wife stated that the husband would have to find somewhere to live. She acknowledged that it would be difficult for the husband to re-enter the property market given his income and work history.
In her oral evidence, the wife stated that she intended to sell the property “as is” and would not undertake any remedial work. In his final submissions, however, the wife’s counsel sought an order that the wife be at liberty to spend an amount of up to $30,000 on the Town C property to prepare it for sale if recommended by the selling agent. The wife then proposes that she be reimbursed this sum “off the top” of the net proceeds and the balance then divided on a percentage basis. The wife’s oral application was not put to the husband in cross-examination during the Trial.
The wife stated that she was not concerned about the impact on the children if the Town C property had to be sold. In her view, the husband could move wherever he chose to do so. She appeared unconcerned about a possible move out of the Region P area and away from the children’s schools and the disruption this could bring to the shared care arrangement for the children.
The husband acknowledged that the sale of the Town C property had stalled because after signing the consent minutes of order, he objected to the figure of $280,000 being required as pre-approval for him retaining the property. The husband described objecting to the sum of $280,000 but that he had “reluctantly signed the orders under the advice” of his then solicitor.
The husband attempted to explain that his initial non-compliance with the orders of July 2023 was based on him becoming aware that the partial property orders were no longer binding. I consider that the husband was being disingenuous when he gave this evidence. The husband only first became aware of the parties’ predicament regarding the interim orders after the wife had filed enforcement proceedings and her application came before the Court on 8 November 2023. The husband had been objecting to the sale of the Town C property to the wife and the proposed selling agent, Mr Q, as far back as late 2023.
The husband is very anxious to retain the Town C property. He is concerned that he will lose his home and will be unable to easily find alternative accommodation. He has made an application to K Company for finance. In late 2023, the K Company loan was declined on the basis that the husband was to be an “Owner Builder”. The husband appealed the decision. The husband was required to fulfill further criteria to be eligible for a new home loan which included signing a building contract to complete the building works. The husband ultimately did this with ‘R Company’ and paid a $2,500 deposit.
‘Exhibit W6’ is a S Company document entitled “Your Loan Choices” prepared upon application by the husband. The S Company document states that total funds required for the husband to retain the Town C property is $270,000. The husband has executed a building contract for alterations and additions in early 2024. The contract was entered into without the wife’s knowledge or consent. The building period is said to run from early 2024 to late 2024 for the sum of $65,000. It was the husband’s evidence that K Company required him to enter the building contract as a condition of their lending requirements.
In early 2024, the husband received confirmation from K Company pre-approving a loan of up to $295,910 subject to the provision of “stamped Court orders”. This enables the husband to take out a loan for a property to the value of $750,000. The pre-approval expires in mid-2024.[27]
[27] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 57 and Annexure H-5.
The husband provided evidence that his father had signed a statutory declaration to provide him with $65,000 if his loan was approved with K Company to assist with renovations required over the former matrimonial home.[28]
[28] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 6.
The husband was cross-examined about the $65,000 advance that would be made by his father for the purpose of paying for the anticipated building renovations. On the first day of Trial, the husband was adamant that his father would give him the $65,000 if he was successful in retaining the Town C property at Trial. The husband was less optimistic, however, when asked if his father would still advance the $65,000 to enable him to find alternative accommodation and/or to pay rental costs if the wife was successful in her application.
The husband conceded under cross-examination, that he could not pay to the wife the sum of $240,000 and if that was ordered, the property would need to be sold. The husband stated in his evidence that his limit was $215,000 and that he could also use his financial resource to pay a settlement sum to the wife.
If the Court was to order that the Town C property was sold, the husband described wanting to undertake work such as painting and other home improvements to get the best price. The husband considered himself a “cooperative person” and that he and the wife could cooperate to achieve those tasks together.
Under cross-examination, the husband stated in his evidence that if he was ordered to vacate the Town C property, he would comply although he hoped to be able to live in the home and undertake the sale contemporaneously with occupation should he be unsuccessful in his primary application.
Since separation, the husband has continued to meet interest-only repayments for the D Bank mortgage and has paid the associated household accounts and rates. It was the husband’s oral evidence that given the modest mortgage repayment, he has been able to save “about $400 per month” which he has then used to pay for legal fees as required totalling about $7,000, $2,520 to the builder and $3,000 to council when submitting the building plans.
At separation, the wife moved in with her parents at Suburb T and paid them $200 per week in rent.
The wife gave evidence that her parents sold a commercial property at Suburb U and have now purchased the property at Town V in Region P as an investment property. The wife says that she was encouraged by her parents to move into the Town V property after the consent orders failed in 2023 and she did not receive her settlement sum.[29] The wife contends that the property has not been purchased specifically for her. It needs to be observed that the property has been purchased in Region P, close to the children’s schools and in familiar environs for the family. She pays rent to her parents.
[29] See the Affidavit in Reply of Ms Taplin filed 25 March 2024 at paragraph 67.
The wife was challenged about the Town V property purchase. She gave evidence that she assisted her parents with internet banking by way of her mother placing funds into her account, which she had then paid to the conveyancer. The wife’s parents are aged 94 and 78 years respectively. The wife stated that she transferred the money because her parents are not confident using internet banking. I accept her evidence.
The wife currently works 0.9FTE as a professional at N Company and earns approximately $89,000 per annum. It is a permanent position. The wife pays child support to the husband in the sum of $135.76 per week.
The husband is currently working as a professional. He receives income of $857 gross per week from several sources being private income, Disability Support Pension, Family Tax Benefit and Child Support.
It was my observation that the parties gave evidence as best they could and which can be difficult when trying to recall events and dollar figures from many years ago. They both appeared weary of the litigation and the wife was candid in her evidence of wanting to bring the litigation to an (understandable) conclusion. I accept that the wife was frustrated by the husband’s decision to not pay her the earlier agreed settlement sum resulting in enforcement proceedings and further legal costs. The Court has attempted to fast track the final hearing to bring finality to the parties given the breakdown of earlier agreements which I assess was driven by the husband’s desperate desire to retain the Town C property as his home.
Final Submissions on behalf of the Parties
The wife sought an 80/20 per centum adjustment in her favour on contribution but with an adjustment back in favour of the husband of 10 per centum on account of section 75(2) factors. The wife acknowledged the husband’s previous ill-health but emphasised the husband’s evidence that he would be capable of working in a 0.5 capacity, that the wife pays $135 per week in child support and that the parties’ two children live equally between them.
In relation to superannuation, the wife sought that there be a ‘carve out’ of $54,000 representing the sum contributed by her in 2006. Although the wife’s formal application sought thereafter that there be an equalisation of the superannuation interests of the parties.[30] At Trial, the wife sought a 70% adjustment of the parties’ superannuation entitlements in her favour after the ‘carve out’ had been deducted. During closings, the wife’s counsel conceded that a ‘carve out’ of $54,000 and then a 70% adjustment to the wife could be considered a ‘double dip’ in favour of his client.
[30] See the Amended Initiating Application for Final Orders of Ms Taplin filed 26 February 2024 at
The wife submitted that her initial financial contribution at the date of cohabitation was $54,000 in superannuation whereas the husband’s superannuation balance was negligible. During the period 2006 to 2009, it was submitted that the wife had contributed cash funds totalling $242,609 to the relationship.
Reference was made to ‘Exhibit H6’ being the husband’s Notices of Assessment for the period 2010 to 2023, which demonstrated that for a period of 13 years the husband’s total income was $117,211.
On the question of non-financial contributions, the Court was urged by the wife’s counsel to prefer the evidence of the wife over the evidence of the husband. The wife’s counsel submitted that the wife did not seek a finding that the husband had been dishonest in his evidence. Rather, the wife pointed to the difficulty in accepting the reliability about aspects of the husband’s evidence including the allegation made by him that the wife had been “financially controlling” and that the wife had been intent on “selling him up” when the orders of July 2023 clearly provided for him to retain the Town C property if was able to do so.
In relation to the “negative contribution by the parties” and the value now ascribed to the Town C property, the wife’s counsel submitted that the wife was “not sheeting blame” to one or other of the parties and acknowledged that the renovations had been a mutual decision of the parties.
The wife’s counsel submitted that the wife’s direct financial contribution and her initial financial contribution to the marriage should be given greater weight on the facts of this case.
Post-separation, in the period from mid-2022 to early 2024, the wife observed that the husband had been in sole occupation of the Town C property and had been paying a nominal amount for its occupation for a period of 15 months being $125 per week. The wife submitted that she had paid the mortgage during the period from mid to late 2022. Further, it was submitted that the husband’s evidence confirmed that he had deliberately not sought to work on the property since separation to not increase the value of the property for the purposes of these proceedings.
The wife’s counsel acknowledged that in its discretion, the Court may allow the husband a period of longer than 28 days to vacate the Town C property. The wife still pressed to be sole trustee of the sale given the husband’s previous non-compliance with Court orders. It was submitted that the work sought to be undertaken by the husband to prepare the Town C property for sale may likely be a topic of dispute.
The wife’s counsel acknowledged that the Court was not bound to accept the proposals of either party at Trial. The Court was urged to adopt a “two pool “approach to ensure that the wife received a cash settlement and the husband a superannuation splitting order.
By way of oral application and during closing submissions, the wife also sought an order that she be at liberty to spend an amount of $30,000 to prepare the Town C property for sale on the advice of the selling agent. The wife then proposed that any sum expended by her on pre-sale improvements should be deducted “off the top” of the net proceeds of sale and the balance divided as a percentage between the parties as the Court considers just and equitable.
The husband’s counsel submitted that at the end of a 16-year relationship, the husband sought to retain the former matrimonial home and pay out the wife.
The husband’s counsel drew attention to the disparity in the parties’ future income and current accommodation. It was submitted that the wife would maintain the accommodation at Town V if and until she purchased a property in her own right. If the Town C property was sold, the husband would be required to find a rental property for himself and the children.
The husband accepted that the wife had made a superior financial contribution to the marriage. However, it was observed that both parties had worked hard within their respective capacities and lived frugally. The renovations to the Town C property were said to be the “dream of both parties” until the date of separation. It was submitted that if the property could be worth more than it is, the reduction in value falls to both of them equally.
The Court was urged to accept the husband’s assurance that he would comply with any orders of the Court including vacating the property or preparing it for sale. In submissions, it was said that the husband would require a period greater than 28 days to make the property presentable and to find alternate accommodation.
The husband’s counsel submitted that the husband had suffered from chronic health conditions for much of the marriage and that his future income earning potential was far inferior to that of the wife. It was submitted that if the house was sold, it would be difficult for the husband to re-enter the housing market as his funds were limited.
By way of adjustment on account of the wife’s initial financial contribution, the husband’s counsel submitted that there should be no adjustment or “at best five per cent”. In relation to contributions during the marriage, the husband’s counsel submitted that the Court should assess those contributions as equal.
On account of section 75(2) factors, the husband sought an overall adjustment of 60 per centum in his favour and 40 per centum to the wife.
No submissions were made by the husband’s counsel in relation to the proposed superannuation splitting orders of the wife. The husband did not oppose the Court approaching the division of the tangible assets and superannuation on a ‘one pool’ approach if the interests of justice and equity were said to dictate that every opportunity should be afforded to the husband to retain the Town C property.
LEGAL PRINCIPLES
The jurisdiction of the Court to make orders with respect to the financial matters arising out of a marriage is set out in Part VIII of the Act.
The legal principles relevant to adjusting property interests on the breakdown of a marriage were considered by the High Court in Stanford & Stanford (‘Stanford’).[31]
[31] Stanford & Stanford [2012] HCA 52.
In particular, the High Court identified:
(a)Firstly, that the Court must identify the existing legal and equitable interests of the parties in the property, liabilities, and financial resources of the parties at the time of the hearing; and
(b)Secondly, and importantly, that in the application of section 79(2) of the Act the Court must not make any order adjusting the parties’ legal and equitable interests in property unless the Court is satisfied that “in all of the circumstances, it is just and equitable” to do so.
(c)If the Court determines that it would be just and equitable to make orders adjusting the parties’ interests in property, then section 79(4) of the Act requires:
(i)The consideration of the contributions made by the parties to the acquisition, conservation and improvement of any property, both of a financial nature but also of non-financial nature;
(ii)The effect of any proposed orders on the earning capacity of each of the parties;
(iii)Those relevant factors set out in section 75(2) of the Act;
(iv)Any other order affecting each of the parties;
(v)Any child support either party has or is liable to provide, or might be liable to provide in the future for a child of the relationship; and
(vi)Finally, the Court must consider the “justice and equity” of the actual orders to be made.
Prior to the decision in Stanford, the appropriate approach in a property settlement case was well settled and had been distilled into the ‘four step process’ as identified by the Full Court in Hickey & Hickey & Attorney-General (Intervener)[32] as follows:
(a)Identification of the value of the property of the parties;
(b)Identification and evaluation of the contributions of the parties to the acquisition, conservation and improvement of the property;
(c)Identification and assessment of the relevant future needs factors of the parties; and
(d)Considerations of justice and equity.
[32] Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143.
The significance of the decision in Stanford, with reference to the four-step process, was discussed by the Full Court in Bevan & Bevan.[33] In that decision, the Full Court identified that the four-step process “merely illuminates the path to the ultimate approach,”[34] but that the overarching obligation of the Court is not to make an order unless it is just and equitable to do so.
[33] Bevan & Bevan (2013) FLC 93–545.
[34] Bevan & Bevan (2013) FLC 93–545, [71].
Both parties have competing applications for property adjustment before the Court. It is a relevant consideration that the parties are not agreed as to how the property should be apportioned between them and each seeks an alteration of property.[35] I consider that it would be unjust and inequitable for the parties to remain the joint proprietors of property and for them to be jointly responsible for the D Bank mortgage.
[35] Russo & Wylie (2016) FLC 93-747.
In circumstances where the parties were married in 2006 and separated in 2022, I am satisfied that it is just and equitable to make an order adjusting property between the parties following the course of a long relationship.
STEP ONE - THE PARTIES’ LEGAL AND EQUITABLE INTEREST IN PROPERTY
The parties sought to approach the division of their assets on a two-pool basis. For the reasons set out herein, I ultimately do not intend to adopt the approach sought by the parties. The Court is not bound by the parties’ proposals at Trial.[36] At the commencement of Trial, the parties’ positions as to their respective legal and equitable interests in property was as follows:
[36] U & U [2002] HCA 36.
ASSET OWNERSHIP WIFE’S VALUE HUSBAND’S VALUE 1. B Street, Town C SA Joint $575,000 $575,000[37] 2. W Street, Town V SA Wife’s Parents Not included $600,000 3. Motor Vehicle 3 Husband $300 Nil 4. Motor Vehicle 2 Husband $4,000 $4,000 5. Motor Vehicle 1 Wife $16,000 $16,000 6. Financial resource Husband $8,500 NK 7. Joint Account Joint Nominal Nominal 8. Wife’s Bank Account Wife $3,114 $3,114 9. Husband’s Bank Account Husband $5,712 $5,712 Assets Subtotal $612,626 $1,203,826 SUPERANNUATION 10. Super Fund 1 – Accumulation Wife $345,000 $345,000 11. Super Fund 2 Husband $11,890 $11,890 Subtotal Superannuation $356,890 $356,890 LIABILITIES 12. Mortgage Joint $79,200 $79,200 Subtotal Liabilities TOTAL NET NON-SUPERANNUATION ASSET POOL $533,426 $1,124,626 TOTAL NET ASSET POOL (INC. SUPERANNUATION) $890,316 $1,481,516 [37]Items in Dispute from the Balance Sheet
I will now address the items in the Balance Sheet which are the subject of dispute.
Item 2: W Street, Town V SA (‘the Town V property’)
The Town V property was purchased freehold by the wife’s parents in late 2023 for the sum of $600,000 plus costs. It is registered in the wife’s parents’ names.
The Town V property was purchased after the husband refused to co-operate in the sale of the Town C property and the wife had been living with her parents since early 2022.
At the commencement of the Trial, the husband included the Town V property in the Balance Sheet alleging that the wife had an interest in it. There had been no amendment to the husband’s final orders sought seeking a declaration and the wife’s parents had not been joined to the proceedings. The wife’s interest was alleged to arise because of a transfer of $600,000 from the wife’s parents to the wife and then from the wife to the conveyancer at the time of purchase.
I accept the wife’s evidence was that she assisted her parents with the internet banking transfers needed to purchase the Town V property because they are not comfortable with online banking. The wife’s parents are aged 94 and 78 years respectively.
At the conclusion of the Trial and in her closing submissions, the husband’s counsel conceded that the Town V property should be deleted as a line item from the Balance Sheet.
I propose to adopt that course.
Item 3: Husband’s Motor Vehicle 3
The wife asserts a value of $300. The husband asserts nil value.
There was no cross-examination of the husband on this topic and no evidence of value.
I propose to delete this item from the Balance Sheet.
Item 4: Husband’s Y and Z financial resource
Under cross-examination, the husband conceded a value for these line items at Trial as $21,182 for the Y and $5,737 for the Z.
Considering the husband’s evidence, I propose to adopt the figures given by him in the Balance Sheet.
Revised Balance Sheet
Considering the Court’s findings as set out above, the revised Balance Sheet is as follows:
ASSET OWNERSHIP VALUE 1. B Street, Town C SA Joint $575,000 2. Motor Vehicle 2 Husband $4,000 3. Motor Vehicle 1 Wife $16,000 4. Y
Z financial resource
Husband $21,182
$5,7375. Joint Account Joint Nominal 6. Wife’s Bank Account Wife $3,114 7. Husband’s Bank Account Husband $5,712 Assets Subtotal $630,745 SUPERANNUATION 8. Super Fund 1 – Accumulation Wife $345,000 9. Super Fund 2 Husband $11,890 Subtotal Superannuation $356,890 LIABILITIES 10. Mortgage Joint $79,200 Subtotal Liabilities TOTAL NET NON-SUPERANNUATION ASSET POOL $551,545 TOTAL NET ASSET POOL (INC. SUPERANNUATION) $908,435
Based on the above revised Balance Sheet, the wife will be retaining Items 3 and 6 of the non-superannuation assets in the Balance Sheet, and the husband will be retaining Items 2, 4 and 7. The wife’s net non-superannuation assets are $19,114 and the husband’s net non-superannuation assets are $36,631. The wife’s personal total net superannuation and non-superannuation assets are $364,114. The husband’s personal total net super and non-super assets are $48,521.
STEP 2 - THE CONTRIBUTIONS OF THE PARTIES
The Court is required to bring to account the parties financial and non-financial, direct, and indirect contributions to the acquisition, conservation or improvement of property.[38] In addition, the Court must also bring to account the parties’ contributions to the welfare of the family.[39]
[38] Family Law Act 1975 (Cth) s 79(4)(a)-(b).
[39] Family Law Act 1975 (Cth) s 79 (4)(c).
In considering an evaluation of the parties’ contributions, the Court must be careful to assess the totality of the parties’ contributions throughout their relationship together with contributions in the period post-separation.[40] The Court must assess the contributions of the parties at the date of Trial not at the date of separation. The Court is not required to undertake a mathematical exercise in assessing the parties’ contributions. Nor does the Court need to dissect each individual contribution and ascribe a percentage figure to it.[41] The process is “a matter of judgment and not of computation.”[42]
[40] Dickons& Dickons (2012) 50 Fam LR 244.
[41][42] Garrett & Garrett (1984) FLC 91-539.
The weight to be attached to an initial contribution must be assessed against the rubric of all contributions, however made, over the course of their relationship.[43] All contributions must be weighed collectively. The Court would fall into error to segment the various contributions and weigh one against the remainder.[44]
[43] Jabour & Jabour [2019] FamCAFC 78.
[44] Dovgan & Dovgan [2021] FamCA 306.
The approach to be taken in assessing contributions has been described as a broad discretionary assessment which is “neither an accounting nor mathematical exercise” and which requires a “broad brush approach.”[45]
[45] Perrin & Perrin (No. 2) [2018] FamCAFC 122; Babette & Falconer [2015] FamCAFC 124.
I now turn to considering the parties’ contributions holistically. I must assess the parties’ contributions which are quite different in nature to achieve a just and equitable result.
Financial Contributions
In this case, there is no dispute that the wife had made a superior initial financial contribution to the marriage nor that she had made a greater financial contribution during the marriage by way of her income. The parties disagree as to the weight which should attach to those contributions and how they are to be assessed. This is one of the major controversies in this case.
I accept the wife’s evidence and find that her initial contributions in the first three years of the relationship took the form of a superannuation balance in 2005 of $54,000, $242,000 in cash from her first property settlement, savings and the sale of the Suburb M property. The wife applied the sum of $75,000 by way of deposit in 2005 when the Town C property was purchased and in 2009 paid the sum of $134,000 into the marriage from the net sale proceeds of the Suburb M property. The wife’s financial contributions of $242,069 are significant given the total net pool of $908,435.
The wife acknowledged that the husband had major health issues and had been in receipt of a Disability Support pension from the Commonwealth Government since 2006. As a professional, the wife would have been aware more than most people, of the potential for the husband’s poor health to impact on their relationship and his income earning potential. The husband’s health issues were not a secret when the parties married in 2007.
The parties contributed their respective incomes to the marriage albeit in differing amounts and dependent on their personal circumstances at the time. The evidence supports a finding that the parties lived frugally and well within their means. The D Bank mortgage was paid in advance at the date of final separation. The parties did not partake of expensive overseas holidays nor spend money on luxury items.
By their joint enterprise, I find that the parties have made a negative contribution to the value of the Town C property. The loss to the value of the Town C property should be borne by them equally and this was accepted by the wife’s counsel in his final submissions.[46] There is no requirement that a contribution must result in a positive economic result before it can be taken into account.[47] A party’s work and effort generally remains a contribution unless it is conduct of the type described in Kowaliw.[48]
[46] In the Marriage of Kowaliw [1981] FamCA 70, [10].
[47] Browne & Green [1999] FamCA 1483; MacKinnon & Talbot [2023] FedCFamC1A 156.
[48] In the Marriage of Kowaliw [1981] FamCA 70.
In this case, the parties jointly decided to become home renovators. There was no evidence at Trial to suggest that the attempts at renovation were not genuine. The wife may now regret her decision to embark on the renovations but that was a mutual decision made with the husband in happier times.
The joint valuation by J Company dated early 2024 provides evidence of the Town C property’s poor state and presentation. For example:
(a)On page 10 and under the heading “Conditions / Repairs”, the building is described as being “in poor condition overall… Internal paintwork is in poor condition and external paintwork is in fair condition”; and
(b)On page 17 and under the heading “General Comments”, the property is described as:
…currently under renovation and is substantially incomplete which is considered to have a detrimental impact on the market value of the property and as such has been reflected within this assessment.
At the date of inspection the property had significant works which have not been completed [list of improvements needed to the house]
Please refer to attached photos. These issues have been considered within our assessment.
Our valuation has been completed on the basis that the dwelling would be cleaned and tidied without the completion of any capital works prior to any sale.
We note our valuation conclusion considers that a potential purchaser would expect a discount over and above any repair costs for taking on a significantly incomplete project of this nature to account for any unforeseen risks and any inconvenience.
…
We note the resident of the dwelling has advised the external cladding to the first floor is non compliant. We have relied upon this information to be true and correct. If this information is found to be incorrect the value and marketability of the property may be affected and the valuation should be returned to the valuer for review or comment
The valuation from H Company dated late 2022 being ‘Annexure L” to the wife’s Affidavit filed 26 February 2024 also refers to a need for major construction to a bedroom. An arbitrary figure of $200,000 was adopted as a cost for professional trades/builders to complete works. Further, that the level of capital required to be invested into the property would “considerably impact on the offers and perceived current value.”[49]
[49] See the H Company Valuers Report dated late 2022 at page 15 of 53.
The parties agree that their decision to renovate has resulted at Trial in the value of the Town C property being negatively impacted and I find that they each bear the consequences accordingly.
Non-Financial and Homemaker Contributions
One of the essential tasks for the Court under section 79(4) of the Act is to weigh and assess their contributions. The Court must be careful not to undervalue the homemaker role, which can be difficult to quantify, compared with a wage earner.[50] It is important not to “overvalue” some contributions merely because they can be measured in money as much as it is important not to “undervalue” indirect contributions or contributions to the family because they cannot be (adequately) measured in money.[51]
[50] Ferraro & Ferraro (1992) 16 Fam LR 1, 38.
[51] Hayton & Bendle [2010] FamCA 592, [155].
In this case, there was a reversal of a more traditional marriage in that it was the wife who earnt most of the income and where the husband remained closer to home given his health and skill set.
I accept that there were periods in the marriage where the husband’s chronic illness would have resulted in the wife shouldering a greater responsibility for the domestic duties and childcare. The husband’s health was so poor that he “almost lost his life”.[52]
[52] See the Affidavit of Ms Taplin filed 26 February 2024 at paragraph 80.
When able to do so, the wife agrees that the husband cared for the children, undertook domestic duties and worked on their home during their relationship.
It is difficult to assess in absolute dollar terms the contributions made by the parties to contributions by way of homemaking and caring for children. It is also not possible for me to investigate the past and view how the parties organised themselves during the marriage. In my view, the evidence supports a conclusion that the parties worked as a team and that their roles were largely complimentary. At times, the wife was required to shoulder a greater load because of the husband’s ill health but his health problems were known at the time the parties decided to marry and start a family. Whilst the wife brought in most of the income, the husband contributed when he could. It is my observation that for much of the relationship the parties adopted a role reversal of what might have been seen in a “traditional “relationship.
Conclusion as to contributions
The Court is cautioned against undervaluing the role of a homemaker. Such a role is incapable of being reduced to a purely arithmetical exercise.[53] The Court must do its best to distil an assessment of the party’s contributions to percentages in order to discharge its functions. It is not an accounting exercise. As the Full Court said in D & D:[54]
We think that in extracting a common principle from these cases and the cases they have relied upon it is important to remember, as was pointed out by Ellis, Strauss and Lindenmayer JJ in Harris (1991) FLC 92-254; (1991) 15 Fam LR 26, and by Fogarty and Finn JJ in Beneke (1996) FLC 92-698; (1996) 20 Fam LR 841, the task of the court in proceedings under s 79 is not akin to an accounting exercise. The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s 79 principles.
[53] Ferraro & Ferraro (1992) 16 Fam LR 1, 38.
[54] D & D [2003] FamCA 473, [49].
In this case the relationship is a lengthy one with the parties focused on raising a family including an older child of the wife. The parties jointly agreed to home ownership and aspired to be home renovators. The parties were greatly assisted by the initial financial contributions of the wife. Applying a broad-brush assessment to all of the contributions made by the parties, I conclude that contributions to the asset pool should be assessed as 75% to the wife and 25% to the husband.
STEP 3 - RELEVANT SECTION 75(2) FACTORS
The next step is to consider the parties’ future needs.
The parties agree that there should be an adjustment in favour of the husband on account of relevant section 75(2) factors but do not agree as to how the Court should assess their competing needs. This is an important part of the evaluation because the Court needs to consider amongst other factors, their respective capacities to earn an income and to provide secure accommodation for themselves and by implication, their children in the future.
The wife is aged 52 years and has permanent employment as a professional with N Company on a 0.9FTE basis and has a gross average weekly income of $1,792.07 from her income and Family Tax Benefits. The wife has been employed with N Company for 21 years and has accumulated 194 days in long service leave. It was the wife’s unchallenged evidence that she intended to take this leave to recover from the stress of her marital separation and these proceedings rather than take the leave as “cash”, which would have provided her with a not insignificant cash windfall. The entitlements remain a resource to the wife even in this scenario. The wife conceded in her evidence that the husband has had significant health issues. She argues that the husband’s chronic poor health is behind him and that he could find better remunerated employment should he try to do so.
The husband is aged 53 years and earns a modest income as a professional. The bulk of his weekly income is paid by way of a Disability Support Pension and child support payments from the wife. Whilst the husband maintained an optimistic attitude towards his future income earning capacity, the history of his employment up to this point suggests caution. The husband deposes that he still suffers from a medical condition and whilst the husband says that the disease as “currently dormant,” he states that it remains a threat to his future health if there is a flare up.[55] The husband is attempting to increase his work output, however he describes having “an uncertain future work capacity” and is unlikely to be anything other than part-time. I accept this evidence. I think it would be an exercise in optimism to think that the husband would be able to obtain employment at his stage in life to match the financial security enjoyed by the wife.
[55] See the Affidavit of Mr Hadley filed 20 March 2024 at paragraph 66.
The parties continue to have the shared care of their two children and the wife pays child support to the husband at a rate of $135 per week.
My impression of the evidence is that the parties have the capacity to live frugally and within their means. They have markedly different standards of living facing them post the conclusion of their property settlement. Whilst the wife aspires to independent home ownership, there is nothing to suggest that there is any need for the wife to leave the Town V property purchased by her parents either in the immediate future or at all. The wife’s accommodation is satisfactory and secure. The same cannot be said for the husband. Dependent on the outcome of these proceedings, the husband faces an uncertain future as far as his accommodation is concerned. Given his age and income earning capacity, I consider that it will be extremely difficult, if not impossible, for him to re-enter the private housing market.
Given the wife’s financial security and the differing housing opportunities arising in this case, I consider that the question of accommodation security arising between the parties is a factor to be brought to account pursuant to section 75(2)(o) of the Act.
On balance, I consider that the relevant factors result in an adjustment in favour of the husband of 10% to be just and equitable.
STEP 4 - JUSTICE AND EQUITY
The parties agree that the Court retains a discretion to alter the parties’ interests in property as I consider appropriate. The Court is not bound by the parties’ proposals at Trial.[56]
[56] U & U [2002] HCA 36.
I am required to consider that the proposed orders are just and equitable in all the circumstances.[57] The Court must apply its various assessments to the assets it has identified. This has been described as a “leap from words to figures.”[58]
[57] Norbis & Norbis (1986) FLC 91-712.
[58] Steinbrenner& Steinbrenner [2008] FamCAFC 193, [234]
I am required to be satisfied in all of the circumstances that it is just and equitable to make the orders. It is the justice and equity of the actual orders that the Court must consider. [59]
[59] Russell & Russell (1999) 25 Fam LR 629, [80].
The parties have been afforded natural justice to address the Court as to the adoption of a one-pool approach.[60] They conceded in submissions that it was open to me to do so.
[60] Calder & Calder [2016] FamCAFC 36; Marcon & Cussen [2017] FamCAFC 150.
In this case, the principles of justice and equity loom large and have weighed heavily on the Court in reaching a final conclusion.
In this case, I propose to adopt a one-pool approach for the following reasons:
(a)The wife seeks a 70% adjustment in her favour of both the combined superannuation entitlements together with a ‘carve out off the top’ to her in the sum of $54,000. If the wife’s proposal was successful, this would see the husband receiving a superannuation split of $78,977. I consider that a superannuation split will be of little use to the husband in assisting him to have a roof over his head;
(b)In my view the greatest priority in this case is to ensure that, if possible, both of the parties have secure housing given their ages and disparate income potentials. If the sale of Town C can be avoided, the sale of which would place the husband in a position of accommodation uncertainty, the Court should do what is equitably open to it to achieve this result;
(c)The facts of this case compel the Court to adopt a one-pool approach so that the wife retains all her superannuation so as to give the husband the greatest opportunity to retain the Town C property.[61] Such an approach has been adopted in other decisions of this Court where an ability to retain a home was considered an important overriding factor.[62]
(d)The wife’s oral application to pay up to $30,000 in repairs sale and then divide the net balance 70% in her favour, may further erode the prospect of the husband being able to buy a home in the future if this does not result in a greater sale price; and
(e)The sale of the Town C property given its poor state may prove problematic given the content and observations of the two licensed valuations before the Court and cause further delay. The agents’ fees and sales costs will only serve to erode further an already modest asset pool. The wife’s oral application confirms to my mind that the wife understands the property is in such a poor state that further work is likely to be required before it is placed on the open market.
[61] C & C (2005) 33 Fam LR 414; Hayton & Bendle [2010] FamCA 592.
[62] Yellin & Temple [2013] FCCA 360; McBurney & Reddy [2013] FCCA 395; Tomlin & Nilsen [2011] FMCAfam
I consider it more likely than not, given the trajectory of events since proceedings commenced, that the parties would fall into dispute over the nature of the work to be done and the cost. No time frame for the improvements was given by the wife who seeks that the husband vacate the property within 30 days of a final order and find alternate accommodation in the interim.
In my view, the husband should have one final opportunity to retain the Town C property if he is able to do so. It would be naive not to think that the husband will find it extremely difficult to re-enter the housing market given his age and employment history. A home for his future is far more valuable than superannuation. This may be his last opportunity to retain a home for his future.
Standing back, the wife retains the future benefit of permanent and well-paid employment and superannuation entitlements paid by her employer. Compared to the husband, she is in good health. She has certainty of accommodation in an area of Region P that enables her children to continue at their schools and part-time employment. The wife will have a settlement sum and the capacity to obtain a mortgage given her job should she choose to move from her current accommodation in the future. There was no evidence to suggest that the wife was under any pressure from her parents to move elsewhere anytime soon or at all.
If the husband does not pay the settlement sum to the wife and refinance into his sole name as provided for herein, then I propose that he has a further 30 days in which to vacate the Town C property. Given the events which followed the interim orders made in July 2023, I consider that the husband should vacate the home whilst it is being repaired and/or sold. The husband may frustrate the sale given his failure to comply with the earlier consent order and this must not occur again. The timeframe allowed in these orders will give the husband ample time to vacate if he is unable to pay the wife her settlement sum.
I propose allowing the parties to undertake any improvements or repairs recommended by the selling agent. I decline to make an order permitting the wife to act as a sole trustee of the sale. The husband does not trust the wife and he seeks to obtain the best possible price for the sale so as to rehouse himself. I will provide for the parties to follow the advice of the selling agent to minimise the prospect of any disputes.
I am satisfied that an outcome where the wife retains 65% of the value of the parties’ combined super and non-super assets and the husband retains 35% of those assets is just and equitable in the circumstances of this case. Had the Court adopted a two-pool approach, then I would have considered a greater percentage to the husband on account of his future needs and the parties’ disparate financial positions. The adjustment of 10% brings to account the retention by the wife of the entirety of her superannuation entitlements.
The total net superannuation and non-superannuation asset pool is $908,435. The wife will retain Items 3, 6, and 8 in the revised balance sheet totalling $364,114. To achieve 65%, the husband is to pay the wife a settlement sum of $226,368. To avoid any potential injustice or inequity to either party if the property is to be ultimately sold, I will include a formula to be applied in that event.
CONCLUSION
On balance, I consider that the outcome which I propose represents a fair and equitable finalisation of the party’s financial relationship with one another.
For all the above Reasons, the Court makes the Orders as set out at the commencement of this Judgment.
I certify that the preceding one hundred and seventy-six (176) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 23 May 2024
value of $570,000.
paragraph 4 of the ‘final orders sought’.
The agreed value of $575,000 is taken from ‘Exhibit W1’ being the J Company Valuation Report
dated 26 March 2024.
Bolger & Headon [2014] FamCAFC 27; Fields & Smith [2015] FamCAFC 57; Jabour & Jabour [2019]
FamCAFC 78.
166; L & L [2003] FamCA 40.
0
14
3