TAYLOR & TAYLOR
[2015] FCCA 1251
•15 May 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TAYLOR & TAYLOR | [2015] FCCA 1251 |
| Catchwords: FAMILY LAW – Property – short de facto relationship – litigation guardian appointed – wife not available for cross-examination – wife’s Kennon claim not made out. |
| Legislation: Family Law Act 1975, ss.4, 66, 74, 75, 79 Child Support (Assessment) Act1989 (Cth), s.117 |
| Kennon & Kennon (1997) FLC 92-757, 22 Fam LR 1 Bevan & Bevan [2013] FamCAFC 116 |
| Applicant: | MS TAYLOR |
| Respondent: | MR TAYLOR |
| File Number: | MLC 7672 of 2013 |
| Judgment of: | Judge Harland |
| Hearing date: | 2 March 2015 |
| Date of Last Submission: | 2 March 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 15 May 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Skerlj |
| Solicitors for the Applicant: | M K Steele & Giammario |
| Counsel for the Respondent: | Mr Allen |
| Solicitors for the Respondent: | Martin Irwin & Richards |
ORDERS
That pursuant to section 78 of the Family Law Act1975, each of the husband and the wife shall be and hereby are declared to be the sole and absolute owners at law and in equity of:
(a)all items of furniture, furnishings, personalty, chattels and jewellery;
(b)all monies (whether held in cash or in deposit with any financial institution);
(c)any motor vehicle;
(d)all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant;
in the possession, custody or control or each or in which either has an interest which are not otherwise dealt with in these orders.
That within 30 days of the date of these orders the wife do all acts and things and sign all documents necessary to transfer all her right, title and interest in the property known as Property A, described in Certificate of Title Volume [omitted].
That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders, then pursuant to section 106A of the Family Law Act 1975, the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
That all outstanding applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Taylor & Taylor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 7672 of 2013
| MS TAYLOR |
Applicant
And
| MR TAYLOR |
Respondent
REASONS FOR JUDGMENT
The parties were in a short relationship. The parties married in November 2007. They separated in December 2011. They did not live together until July 2008 when the wife travelled to Australia from the Philippines.
The parties do not have any children.
The wife has severe mental health issues and was unable to participate in the court proceedings because of her health. Her solicitor was appointed as her litigation guardian on 3 July 2014. Before the wife lost capacity to participate in the proceedings she filed two affidavits.
The wife alleges in her affidavits that the relationship was characterised by the husband’s family violence towards her and she seeks an adjustment relying on the Full Court decision of Kennon & Kennon (1997) FLC 92-757, 22 Fam LR 1 and in support of an additional adjustment in her face because of this. The difficulty for the wife in making out this claim, as her solicitor conceded, is that the court is only able to place limited weight on her evidence as she was not available to be cross-examined.
It was an unusual situation for both counsel, as cases involving litigation guardian rarely proceed to a final hearing. I suspect that this is because of the real evidentiary difficulty in prosecuting such claims.
The parties handed up a joint balance sheet at the beginning of the hearing. They agree as to the parties’ legal and equitable interests save for issues I discuss below.
The parties assets as are follows:
Property A
Property B
Property C
Property D
Property E
husband’s savings
husband’s shares
husband’s Rodeo motor vehicle
husband’s Mazda
husband’s caravan
husband’s trailer
husband’s tools
$10,000
$90,000
$80,000
$80,000
$62,000
$36,904
$51,100
$10,000
$2,500
$5,000
$250
$2,000
wife’s superannuation
husband’s superannuation
$4,418
$40,058
Total
$474,230
The wife has a debt to Westpac. She bought a car, gave some money to her family and lent some money to Mr T. She took out the loan and after separation. These should not be included in the matrimonial asset pool.
The wife makes other complaints in her case outline about the husband’s earning capacity and valuation of the husband’s business (which the husband says he sold in 2012). These issues were not pursued at trial and cannot be taken further.
The parties are in dispute with respect to the following legal and equitable interests.
a)whether or not the wife has an interest in a property in the [B], Philippines. This is addressed below at paragraphs 11 to 14;
b)whether household contents have no value or a value of $100,000. Neither party has filed any valuation evidence of the contents. Therefore this issue cannot be taken any further;
c)the balance of the net sale proceeds from the husband’s insurance payout should be added back. The husband received an insurance payout after a house he and the wife owned at Property A burnt down. The wife says they purchased the Property A property in September 2011;
d)how the interim payment to the wife of $20,000 should be treated. The wife contends that $10,000 should be added back for her paid legal fees. The husband contends that the whole amount should be added back;
e)whether or not the husband’s legal fees of $30,000 should be added back. No submission was made about this during the course of the hearing;
f)whether or not the cost of the husband’s holidays to the Philippines in 2013 of $20,000 should be included. This was not agitated at the hearing;
g)whether or not the husband’s expenses of $1000 for the dog should be included. The husband was not cross examined about this. I do not propose to add this back.
The Philippines property
It is unclear whether or not the parties have any interest at all in a property at [B] in the Philippines.
The wife says that during a trip she and the husband took to the Philippines in August 2010 the husband insisted on purchasing a vacant block of land at [B] for AUD$25,000. She says she advised the husband against buying property. It is on a different island to her family and she did not think the price was fair or that the purchase was practical. She was named as the purchaser on the deed of conditional sale. She says the husband told her to remain in the Philippines while he wound up his businesses in default of properties in Australia. She says he later changed his mind and insisted that she return to Australia. She says that the balance of the purchase price was never paid.
The wife says that the husband contacted her in 2012 about the land and said he would send her $25,000 so that she could complete the purchase and have additional funds to herself or her family. She could then sell the property and they could split the proceeds. The wife says she visited the Philippines in September 2012 and tried to complete the purchase of the land but that she could not find the land on the island. The husband says the property is worth $100,000, being four times what they paid. He does not explain his reasoning and does not provide any expert evidence. This is a mere assertion and I place no weight on it. He says he cannot own land in the Philippines because he is not a citizen there.
Neither party has put any documentary evidence before me with respect to the land. The state of the evidence about this is so uncertain that I am not satisfied that I can take it into account as a financial resource because there is so much uncertainty even as far as where the land is located let alone the nature of the parties’ interest in that land.
Non-disclosure
Both parties complain that the other party has not made full and frank disclosure. In the case outline the wife complains that the husband often received cash payments and may not have disclosed all of his real estate interests and sources of income.
The husband complains that the wife has bank accounts in the Philippines which she has not disclosed. Some of the international money transfers the husband made to the wife during and after the relationship, were made via Western Union and that money was picked up rather than transferred to a bank account. It was not possible to explore this at the hearing (see exhibit D).
Interim orders were made on 16 October 2013. Order 16 restrained the parties from dealing with property in their possession or control “save as necessary to defray their ordinary living expenses”. At that stage the husband had not filed any answering material.
On 5 December 2013, the order made on the pervious occasion was varied to allow the husband to pay his ATO debt and plumbing debt and for both to be able to pay their reasonable legal fees.
On 3 July 2014, order 16 of the orders made on 16 October 2013 were further varied to enable the husband to trade his shares.
The husband complains that he has lost significant sums on his investment shares because the injunctions prevented him from share trading. The husband was cross-examined about this. The husband says he is learning about share trading. The husband has not established that he has lost money because of the injunction. I do not accept the husband’s evidence that he did not know he could vary the order as in fact that is what he did some months later. The husband chose to engage in speculative share trading which is risky.
The wife’s evidence
The wife’s affidavit filed on 4 December 2013 is brief, addressing her mental health, her attempts to return to work and her anxiety about attending court. It annexes Dr K’s first report.
The wife filed a further affidavit on 1 April 2014. She sets out the history of their relationship. They met through an online dating service. They met in person in mid-2007 when the husband came to the Philippines for a couple of weeks. He returned to Australia until a few days before their wedding which took place in the Philippines. The parties intended for the wife to return to Australia with the husband a few days after the wedding but there was a problem with her visa. The husband returned to Australia without her. She moved to Australia in July 2008 after obtaining her visa.
The wife was 18 years old when they married. The husband was 42.
The wife makes various allegations about the husband’s former marriage and claims that the husband did not tell her about his adult children. These allegations are not relevant to the issues I have to determine.
The wife makes a lot of complaints about the standards of the property the parties lived in Western Australia when she first came to Australia. She describes the accommodation as primitive and claims that the state of the accommodation (being both lack of facilities and the state of cleanliness) made her homemaker contributions more arduous.
The wife also alleged that the husband was controlling, lost his temper and at times kept her in her room for a few hours at a time. The wife describes in some details alleged assaults she says took place during the marriage when the husband was drunk. She says she had a miscarriage because of it.
The husband also goes into detail in denying her allegations and in making counter allegations about the wife’s conduct and jealousy.
The wife says she assisted the husband and tradesmen he hired with improvements made to the property they lived at in [R].
For a period in West Australia the wife ran a small [J] business. She says the husband forced her to do this as a way for her to earn her way.
The wife says that apart from her trips to the Philippines the husband did not provide her with money for her own use. There is an inconsistency in her assertion in this regard. The wife frequently travelled to the Philippines. The husband also sent significant sums of money to the wife and members of her family. The husband has also annexed phone records showing frequent calls to the Philippines.
The wife says the husband only let her buy clothes from op shops whilst he purchased his own clothes at department stores.
The wife alleges that the husband would keep large sums of cash around the home.
The wife says that the husband gave her $5,000 or slightly more when she travelled to the Philippines on 6 occasions without the husband in 2009 and 2010. She says the husband was aware that she would give most of this money to her family and that her family ensured she returned to Australia despite her unhappiness. She appears to be suggesting that her family pressured her to return because of the money they received from the husband but does not explain why if this was the case, she gave them the money rather than keeping the money for herself.
She also says that the husband allowed her to handle cash from his business and that she was very careful to record it all. Again this is inconsistent with her allegations about him being controlling and not giving her access to funds.
The wife says that in 2011 the [J] business closed and she made significantly more contributions to the husband’s [omitted] business as the husband was suffering from gout. The wife also started working part-time at [omitted].
The wife ended the marriage and moved to Perth. She met Mr N on an Internet site in early January 2012 and moved to Melbourne later that month. She says once in the relationship she discovered that Mr N took drugs and that he pressured her to try cocaine. She says she only did some on one occasion. She became pregnant.
The wife suffered a miscarriage in October 2012. She ended the relationship with Mr N after finding out he was having an affair.
She then met Mr T in November or December 2012. She started a relationship with him. She says that in February she took out a personal loan from Westpac and gave Mr T $4,000 as was he having financial difficulty. She gave some money to her family and also bought a car. She moved in to Mr T’s house in May 2013.
The wife has been on unpaid sick leave since May 2013.
The husband’s evidence
The husband denies that he was violent and controlling during the relationship. He denies the wife’s allegations about the state of the property.
The husband says he is retired. He says he is in poor health but has not filed any medical evidence.
The husband denies in some detail the wife’s allegations with respect to his children.
He also denies the wife’s allegations about the state of the [R] property and says that he told her in detail what the property was like before she left the Philippines. He denies that the wife assisted the tradesmen improvements the property. He goes into some detail about this. He also says that he enjoyed cooking and did not require the wife to do all the domestic duties and that the property was not in the state that she complained about.
The husband says he funded the [J] business and paid the expenses associated with it and the wife kept the income to use as she pleased.
The husband sold the [R] home and factory in 2012. He details how he used the sums at paragraphs 53 and 54 of his affidavit sworn on 14 April 2014.
The husband’s initial contributions
The husband owned several pieces of real estate before the parties’ relationship. He owned the property at [R] in Western Australia where the parties lived. He also had a property in NSW which he sold early in the marriage. He applied the funds towards household expenses and the upkeep of the factory.
Given the short nature of the parties’ relationship the husband’s initial contributions must be given significant weight.
Contributions
It is clear from the evidence that the husband was the primary income earner. The wife performed household tasks and worked in the [J] business. I am unable to accept the wife’s untested evidence that the husband did no chores around the house. The husband says he enjoys cooking and they cooked together sometimes after she learned to cook.
In addition to these contributions it is also clear that the husband provided significant funds to the wife and her family. He funded the wife’s frequent travel to the Philippines and also sent money to the wife and members of her family.
It is clear that there were significant periods during the marriage where the wife was in the Philippines. The husband would have had to perform the domestic duties during those periods.
The wife’s mental health
The wife’s treating psychiatrist Dr K has provided several reports in these proceedings and she gave oral evidence. She first saw the wife on 11 June 2013 following the wife’s involuntary admission to [omitted] hospital in early 2013. She says at that stage of treating her she was not able to get much detail of her history. She was very traumatised by her admission to hospital.
In her report dated 1 April 2014 Dr K notes that the wife’s reported stress orders prior to her hospital admission were family pressures and memories of her allegedly abusive ex-husband. The wife also reported a difficult childhood were she experienced emotional and sexual abuse. She says her family have put significant pressure on her to provide for them financially. The wife described her four-year marriage as being characterised by emotional and physical abuse.
Dr K 2014 report addressed the issue of the wife’s incapacity to provide instructions and participate in the court proceedings.
In her report dated 10 February 2015 Dr K continues to hold the opinion that the wife is unable to participate in the Court proceedings and was unable to give an estimate as to when or if this would change as needing to discuss past issues may trigger a decline. She anticipated that the wife would benefit from years of ongoing psychiatric treatment.
It was clear from Dr K’s oral evidence that the wife was not forthcoming with her about some aspects of her history. This is not unusual. Patients will often focus on what is particularly troubling to them at that stage and she may not want to discuss other issues.
The wife did not disclose a relationship with Mr N in 2012. They lived together from about June 2012 to October or November 2012. She suffered a miscarriage on 7 October 2012. Dr K couldn’t recall the wife discussing her 2012 drug use with her. The wife says she was pressured into taking cocaine and did that on one occasion. Dr K agreed that the drug use can cause psychiatric difficulties in vulnerable patients. She said this adds a layer to her psychiatric history. She went on to say that the wife presents with a very complicated history and there is an enormous amount of material to explore. She is not a particularly forthcoming historian. When she first saw her in 2013 she was very preoccupied with her involuntary admission to the [omitted] and she was very focused on the current issues which were disturbing to her.
Dr K records seeing a note in the hospital records that the wife was assaulted in December 2012 and suffered a head injury. She was assaulted by her current partner’s ex-wife Ms C.
Dr K said that she hoped that the end of the proceedings would assist the wife improving her mental health. The wife found the proceedings traumatic. She is hoping to address childhood issues of trauma with the wife and many other issues in her past. She anticipates that the wife will need long-term therapy. The wife is on a maximum dose of an antidepressant which is also good for anxiety.
Mr T
The wife formed a relationship with Mr T in late 2012, shortly after the wife ended her relationship with Mr N. They moved in together in May 2013. They are engaged to be married. Mr T’s former wife Ms C assaulted the wife in December 2012. Mr T is finalising his divorce. He says his financial circumstances are modest. Mr T works full time earning about $107,000 per annum. He supports the wife financially. She receives an insurance payout of $800 per month which is used to pay for line of credit.
Post-separation contributions
The husband has provided funds to the wife post separation. The husband provided the wife with $36,000 in 2012 and $20,000 during the course of these proceedings. These sums should not be ignored on the basis of being some sort of maintenance payments.
Annexure TRTB-16 to the husband’s affidavit sworn on 14 April 2014 is a copy of an informal property agreement the parties signed. It is dated 1 December 2011. It provides for the husband to keep the Australian assets, for the wife to keep the [B] property, money and other assets in the Philippines and for the wife to pay the husband $11,000 within 12 months. The husband says that the wife prepared the document.
The husband also annexes a series of emails he received from the wife in 2011 and 2012. The communication from the wife is amicable.
I do not place any weight on annexure TRTB-16 as being a settlement document that should be evidence of the parties’ intentions with respect to a property settlement. In some respects, the husband’s evidence was vague about both his health and how he dealt with his finances post-separation. It is however, consistent with his getting on with his life after a short marriage.
I am not satisfied that a case for non-disclosure has been made out against either party.
The wife’s Kennon & Kennon claims
The wife seeks an adjustment in her favour taking into account the family violence and relies on the full court decision of Kennon and Kennon (1997) FLC 92 – 757. The Full Court said “our view is that where there is a course of violent conduct by one party toward the other during the marriage which is demonstrated to have had a significant adverse impact on that parties contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties respective contributions within s79.”
I have pointed out some inconsistencies in the wife’s written evidence. It is not necessary for a party to have corroboratory evidence about family violence. It is often the nature of family violence that it goes unreported. The difficulty in this case is that the husband denies the wife’s allegations and the wife’s evidence cannot be tested.
I cannot be satisfied to the requisite civil standard that the husband was violent towards the wife. It is also clear from Dr K’s evidence that at least some of the wife’s mental health issues stem from childhood trauma. The wife was also in another relationship after the husband which involved drugs and ended when she had a miscarriage.
Legal Principles and their application to the facts in the case
Part VIII of the Family Law Act1975 is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act.
Pursuant to section 79(1) the Court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to section 79(2) the Court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a Court is to make an order altering marital property interests.
Paragraphs (a), (b) and (c) categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the Court to take into account of any order regarding the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the Court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs. Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].
The High Court has recently considered the operation of section 79 in the matter of Stanford & Stanford [2012] HCA 52.In the case, the majority stated at [35]-[36] that:
“It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of section 79, which can be summarised as follows:
1.Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word existing.
2.Secondly, although section 79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
3.Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to section 79(2) in addition the matters referred to section 79(4).
In Stanford & Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of section 79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.
The High Court also pointed out that what is just and equitable is different in every case.
Stanford & Stanford casts doubt on the correctness of adding back notional amounts to the pool for the purposes of property settlement. The Full Court confirmed this in Bevan & Bevan [2013] FamCAFC 116. The Full Court said at paragraph [79]:
“We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.”
The Court should adopt a two pool approach referred to in C v C (2005) FLC 93-220 with superannuation assets separately due to the superannuation constituting a significant percentage of the total pool.”
The principles referred to in Stanford & Stanford are equally applicable to de facto property matters: see Watson and Ling (2013) 49 Fam LR 303.
In Pierce v Pierce (1998) FLC 92-844 at paragraph 28 the Full Court said:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.”
In Williams & Williams [2007] FamCA 313 the Full Court states at the paragraph 26:
“We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.”
This is a short relationship which did not produce children. The comments of the Full Court in Bushby & Bushby (1988) FLC 91-919 are particularly relevant here. That case also concerned a four-year marriage which did not produce children. The Full Court said
“In a marriage of four years, with no dependent children being involved on either side, it ought to have been apparent to the legal advisors that each party’s actual financial contribution to the marriage was the actual issue”.
In Lane and Wharton [2010] FamCA 18 Justice Watts helpfully reviewed cases dealing with short marriages. Of particular note the comment by Justice Guest in P & P [2002] FamCA 1006 where he said that in the circumstances to assess the wife’s contributions in that case in percentage pool was an unrealistic and meaningless exercise. He went on to make the point is that it is not the court’s role to equalise the financial positions of the parties. These comments are particularly pertinent to this case given the wife’s lack of financial contributions and overwhelming financial contributions the husband made, both in terms of his initial contributions but also his contribute positions both during the relationship and after the relationship, applying a percentage division to the overall pool would be artificial and unhelpful.
I accept that the wife made some contributions during the relationship particularly homemaker contributions and some assistance to the husband’s business as well as the [J] business the husband set up for her. For reasons I have discussed above I am not satisfied that the wife has made out a claim of the type referred to in Kennon & Kennon. It is certainly the case that the parties’ financial positions are disparate. They were before the relationship and they are now. The assets the husband has now are largely attributable to his initial contributions. The only property in joint names is the property at Property A which the parties agree has a value of $10,000. The insurance payments the husband received also relates to this property. The wife did not make any financial contribution to the purchase of this property. She says she had nothing to do with the purchase. The property was purchased shortly before the marriage broke down.
I do not propose to add back any sums which the parties seek to the pool. In my view the Full Court in Bevan & Bevan [2013] has made it clear that it is not appropriate to add back sums that do not exist to the asset pool but rather to have those sums if appropriate taken into account the section 75(2)(o). The wife’s case outline attempts to mount some sort of waste argument against the husband but I do not accept that the husband’s expenditure on his dog, on holidays to the Philippines and his share trading amount to waste. Given the brevity of the relationship and the significant funds provided to the wife continuing after the relationship ended, the husband had no reason to anticipate that the wife would make a claim against him for property settlement. The parties are entitled to get on with their lives post separation.
Neither party made any submissions as to whether it was appropriate to apply global approach or asset by asset approach in this case.
The wife received sums from the husband post separation totalling $56,000. This includes the $20,000 he paid pursuant to court orders. The wife says that the $20,000 sum should be treated as maintenance for her. I am not satisfied that that is appropriate in this case as the husband’s financial statement indicates he did not have capacity to pay her maintenance. I find that the $56,000 should be taken into account as partial property settlement.
The wife will retain her superannuation which is modest. She will also keep whatever funds she has in her bank accounts and the car she bought post-separation. She will be responsible for the loan she took out post separation.
In considering the respective contributions between the parties during the short relationship in my view it would not be just and equitable to make any adjustment between the parties based on contributions.
The wife has serious medical issues. She is likely to need long-term psychiatric treatment. The wife has previously had an earning capacity. The evidence suggests that these proceedings have exacerbated her condition. Once the proceedings have concluded she may return to a position where she can return to work. It is uncertain as whether this will be full-time or part-time and what the likely timeframe may be. The wife has repartnered and does receive financial support from her partner whose financial position is modest. The length of the relationship has not impacted on her earning capacity. The payments the wife has received post-separation represents an appropriate adjustment for the s.75(2) factors favouring the wife. As a result of this I find that there should be no further adjustment to the wife.
Section 75(2) factors
The husband claims that he had several medical conditions that prevent him from working. The husband describes himself as retired. He is 52 years old. He did not provide medical evidence in admissible form to support the claims. The wife asserts that the husband could continue to earn an income as an [omitted].
I accept the evidence from the wife’s psychologist that the wife has significant mental health issues and is currently not able to work. It is uncertain as to whether that will change although the end of the court proceedings will certainly mean a major stressor is removed for her.
The husband is relying on income from his investment properties and his shares. Regardless of the wife’s suspicions about the husband’s earning capacity, I place some significance on the fact that the husband sold his property and business in 2012 and moved to Victoria. This was long before the wife commenced these proceedings. I cannot be satisfied that he has done so in some sort of attempt to thwart the wife’s claims.
The wife has repartnered. The husband has not.
The husband will have more financial resources and property that the wife. He came into the marriage with significant assets. There are no children of the marriage. The length of the marriage has not impacted on the wife’s earning capacity. She stated working outside of the business during the marriage and continued to work after separation until she became unwell.
Maintenance
The wife seeks a final order for spouse maintenance. She does not specify the amount she seeks or the length of time she seeks it for but leaves this to the court.
Due to the wife’s inability to provide instructions she has not sworn an updated financial statement. The only financial statement she swore was filed on 9 September 2013. The wife says in that document that she has no income. She does not refer to the insurance payment she received which Mr T referred to in his evidence. He said that is applied line of credit she has with Westpac.
Taking the wife’s financial statement at face value, it being untested and assuming her financial position has not changed significantly, the wife has established that she has a need.
That is the first limb of s.72 of the Act. She must then establish that that the husband has a reasonable capacity to pay.
The Full Courts discussion about earning capacity in DJM and JLM (1998) 23 Fam LR 396 is relevant here.
In effect the wife complains that the husband is just exercising his earning capacity. This was an issue which was of some focus in DJM and JLM. In that case the husband had been earning $200,000 as a consultant but took up and a job as an academic earning $80,000. As was pointed out in that case, s.117(4) of the Child Support (Assessment) Act1989 (Cth) and s.66K(i)(b) of the Family Law Act 1975 dealing with child maintenance refer to a party’s earning capacity.
In contrast s.75(2)(b) refers to the party’s income not the party’s income earning capacity. Earning capacity could be taken into account under s.75(2)(o). The difference lead to the Full Court concluding that it was appropriate to consider the husband’s earning capacity as opposed to the husband’s actual earnings when considering child support because there is a higher obligation to pay child support or child maintenance.
In DJM and JLM the Full Court states at the paragraph 17.43:
“A spouse is only required to support the other spouse to the extent that he or she is reasonably able to do so. This requirement does not impute the same degree of compulsion about it that the child support and child maintenance tests express. Thus a parent may be required or expected to work long hours or at more than one job if the parent has the capacity and opportunity to do so, and if the children need greater support than they would receive if the parent was only to work shorter hours. At the same time it might not be reasonable to expect an estranged spouse to avail himself or herself of such opportunities so as to provide maintenance for the other spouse. In the latter case it is a question of what is reasonable in the circumstances”
A party’s obligation to pay maintenance to spouse that is lesser obligation then the requirement to financially support a child. Section 74 refers to a party’s obligation to maintain the other to the extent it is reasonable to do so.
The husband’s current income from investments do not cover his expenses. I find that the husband does not have a reasonable capacity to pay the wife maintenance.
In all of the circumstances I do not think it would be just and equitable to require the husband to make any further payment to the wife.
Conclusion
For the reasons I have given I do not think it would be just and equitable to make a further property adjustment to the wife.
The only property in joint names is the Property A property which the parties agree is worth $10,000. I will order that the wife transfer her interest in Property A to the husband. Otherwise the parties will each keep what they have in their possession.
I certify that the preceding one hundred and ten (110) paragraphs are a true copy of the reasons for judgment of Judge Harland
Associate:
Date:15 May 2015
0
4
3