Teasdales and Teasdales
[2013] FCCA 429
•27 June 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TEASDALES & TEASDALES | [2013] FCCA 429 |
| Catchwords: FAMILY LAW – Property settlement – long marriage – pre-relationship contributions – issue of potential inheritance – section 75(2) adjustment – full and frank financial disclosure. |
| Legislation: Family Law Act 1975, ss.75(2), 79, 80, 81 Federal Circuit Court Rules 2001, Regulation 24.03 |
| Black & Kellner (1992) FLC 92-287; (1992) 15 Fam LR 343 Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; (2012) FLC 93-518 |
| Applicant: | MS TEASDALES |
| Respondent: | MR TEASDALES |
| File Number: | SYC 7622 of 2010 |
| Judgment of: | Judge Monahan |
| Hearing dates: | 4, 5, 6, 13, 14 and 15 March 2013 |
| Date of Last Submission: | 15 March 2013 |
| Delivered at: | Sydney |
| Delivered on: | 27 June 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Watkins |
| Solicitors for the Applicant: | Solari & Stock |
| Counsel for the Respondent: | Ms Petrie |
| Solicitors for the Respondent: | Malcolm Carr & Associates |
ORDERS
Within 28 days from the date of these Orders, the husband do all acts and things and execute all documents, instruments and writings necessary to transfer to the wife all the husband’s right, title and interest in the following properties:
(a)Property O;
(b)Property A,;
Within 90 days from the date of these Orders, the husband pay to the wife the sum of $138,734.00, as directed by the wife.
The wife be declared, to the exclusion of the husband, to hold the sole right, title and interest in the following:
(a)(omitted) Account No..(omitted);
(b)(omitted) motor vehicle; and
(c)(omitted) motor vehicle.
The husband be declared, to the exclusion of the wife, to hold the sole right, title and interest in the following:
(a)Property N;
(b)Property E;
(c)(omitted) motor vehicle;
(d)(omitted) shares;
(e)(omitted) Investment Account No.. (omitted);
(f)(omitted) Term Deposit Account No.. (omitted);
(g)(omitted) Saver Account;
(h)(omitted) Savings Account No..(omitted);
(i)(omitted) Cheque Account No.. (omitted);
(j)(omitted) Savings Account (omitted);
(k)(omitted) Savings Account No.. (omitted);
(l)(omitted) Term Deposit Account No.. (omitted);
(m)(omitted) Term Deposit Account No.. (omitted); and
(n)Two burial plots at (omitted) Park.
Unless otherwise specified in these Orders:
(a)each party be solely entitled to all chattels, goods, motor vehicles, furniture, furnishings and any other property in the possession of such party as at this date;
(b)each party be solely entitled to any moneys, share and debentures which stand in such party’s name as at this date;
(c)each party be solely entitled to any superannuation benefits held in such party’s name and each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other; and
(d)each party be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party’s name as at this date.
Each party do all such things including the signing of all documents to give effect to these Orders.
In the event that either party refuses or neglects to execute any deed or instrument that may be required to give effect to these Orders, the Registrar of the Court be appointed pursuant to s.106A of the Family Law Act1975 to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
All extant applications before this Court be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Teasdales & Teasdales is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 7622 of 2010
| MS TEASDALES |
Applicant
And
| MR TEASDALES |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by MS TEASDALES (“the wife”) seeking property orders pursuant to s.79 of the Family Law Act 1975 (“the Act”). The respondent is MR TEASDALES (“the husband”). The wife’s application is opposed by the husband who seeks different property orders.
The parties are in dispute as to their respective property and family contributions made during their relationship and following their separation. They are also in conflict regarding their views of their respective needs and several other discrete issues.
The matter came before me for hearing over six days (4-6 and 13-15 March 2013), despite having been listed for not more than three days (“the final hearing”). At the final hearing both parties were legally represented by counsel and each gave evidence in support of their case. At the final hearing the wife was represented by Mr Watkins of counsel and the husband by Ms Petrie of counsel.
The details of the orders sought by each party are extracted below.
Background and chronology
The wife was born (omitted) 1967 and is currently aged 46 years. The husband was born (omitted) 1952 and is currently aged 61 years.
The parties commenced cohabitation upon their marriage on (omitted) 1989. There are two children of the marriage, namely X and Y, both now adults. The parties separated in either December 2007 (as asserted by the husband) or January 2008 (as asserted by the wife). It appears that neither party has re-partnered since separation, although the husband asserts the wife is in a relationship[1] which she denies.
[1] Husband’s affidavit filed 27 February 2013, paragraph 97.
The wife is currently employed on a casual basis (omitted) for a company called (omitted) and works one day a week[2]. The wife also works casually as a (omitted) for the (omitted) and is generally employed for extended periods around the seasonal appeals. The wife indicated that she expects to re-commence work two days a week with the (omitted) in late April 2013.[3] The wife is also engaged in home duties and both of the children reside with her at Property O (the “Property O”). The wife states that she earns approximately $100.00 per week and also derives half the rental income from an investment property owned jointly by the parties (being Property A, (the “Property A property”)).[4] The wife asserts that she has a number of health concerns. She asserts that she has previously taken medication and seen a psychologist.[5]
[2] Wife’s affidavit filed 18 February 2013, paragraph 9.
[3] Wife’s affidavit filed 18 February 2013, paragraph 10-11.
[4] Wife’s Financial Statement filed 15 February 2013, Part D.
[5] Wife’s affidavit filed 13 August 2012, paragraph 19.
The husband, who resides in the former matrimonial home situated at Property N, (the “Property N property”), worked as an (omitted) for the (omitted) at (omitted) from about 1970 until his retirement in 2000. Since his retirement, it appears that the husband has worked casually as a (omitted), although the extent of this work is unclear. The husband asserts that he takes medication daily, has suffered from an eye disease for some time resulting in partial vision impairment and that he also has damaged shoulder joints.[6] I note that the husband cares for his elderly mother and is in receipt of a Centrelink benefit for this purpose. The husband also gave evidence that he goes to the gym for general exercise such as walking or pilates.[7]
[6] Husband’s affidavit filed 27 February 2013, paragraph 56 - 57.
[7] Transcript, 13 March 2013, page 51
The parties provided the Court with a chronology listing significant events in the parties’ relationship. The parties were not in dispute, or not in any significant dispute, in relation to the following:
·1978: Husband purchases Property E (“Property E property”) for $39,000.00 with mortgage to (omitted) Bank of $20,000.00
·1982: Husband purchases Property N (“Property N property”) for $150,000.00 with a mortgage to (omitted) of $40,000.00
·1988: Mortgages to (omitted) over Property E and Property N properties are discharged
·1989: Husband purchases Property B property”) for $145,500.00 with a mortgage to (omitted) of $55,000.00
·17 June 1989: Parties are married and commence cohabitation
·5 July 1991: Y born
·13 March 1995: X born
·1997: Property B property sold for $159,000.00 (amount disputed) and Property O (the “Property O property”) purchased in joint names for $422,000.00 with mortgage to (omitted) Bank of $190,000.00
·1999: Wife receives inheritance of about $25,000.00; monies applied to improve Property N property (husband asserts this was approximately $12,000.00)
·2000: Parties purchase property at Property A (“Property A property”) in joint names for $260,000.00 and husband retires
·2007: Husband receives workers compensation payout of about $15,000.00; Husband says parties separate on final basis in December and parties live separately under one roof
·2008: Wife says parties separate on final basis; parties live separately under one roof; final ADVO made at Sutherland Local Court with wife and Y as protected persons and husband named as the defendant
·2010: In July, wife and children vacate Property N property and move into Property O property; wife commences proceedings in December
Procedural history
These proceedings first came before me in my duty list on 28 February 2011, on which occasion I referred the parties to a Conciliation Conference on 17 May 2011 and made associated directions, including directions for further disclosure.
Unfortunately, the wife inadvertently failed to attend the Conciliation Conference with Registrar Hurditch on 17 May 2011. The Court was, however, able to accommodate another conference the next day, that is, on 18 May 2011, with Registrar Campbell. The parties were unable to resolve their dispute that day and it appears that certain interim issues, such as valuations, were not agreed upon.
The parties returned before me on 30 May 2011 at which time I referred the parties to a further Conciliation Conference on 31 August 2011 before Registrar McNamara.
On 6 September 2011, the parties returned again and, having been unable to resolve their dispute at the further Conciliation Conference, I agreed to list the matter for final hearing commencing on 20 August 2012 for no longer than 2 days. The listing was later moved to commence on 30 August 2012.
On 16 August 2012, the husband filed an Application in a Case (“AIC”) seeking an adjournment of the final hearing, and the affixing of new dates, to facilitate valuation evidence being obtained. Due to the proximity to the final hearing listing, the AIC was made returnable on 30 August 2012. On 28 August 2012, the wife filed a response to the AIC seeking the dismissal of the husband’s interim application and alternate orders in the event that the hearing dates were vacated. When the matter came before Judge Kemp on 30 August 2012 his Honour indicated to the parties that the Court was unable to reach the matter because of my illness that day. Consequently, his Honour adjourned the final hearing to a date in December 2012 and dismissed the husband’s AIC and reserved the question of costs for determination by me at a later date.
On 18 October 2012, the parties appeared before me at a mention to consider the preparedness of the matter for trial. As it was apparent to the Court on that date that the parties were not, in fact, ready for trial, I made further directions, by consent, for the husband to file an updated valuation in relation to the relevant real properties and for the wife to serve a subpoena to produce upon the husband’s mother in respect of her will.
On 13 November 2012 the parties returned before me for further mention. Due to additional issues being raised and the general consensus being that the matter could not be contained to the two listed days, I vacated the final hearing listings in December 2012 and allocated new hearing dates of 4, 5 and 6 March 2013. I also listed the matter on 29 January 2013 for further mention to ascertain the parties’ readiness for trial.
When the matter returned before me on 29 January 2013, I confirmed the listing of the matter for trial and made directions for the filing of documents. I also noted in those Orders my concerns about the matter being able to be contained to no more that three hearing days. As stated, the final hearing did commence before me on 4 March 2013 but was unable to be contained to just three days, necessitating the allocation of further dates.
At the final hearing the wife was represented by Mr Watkins of counsel and the husband by Ms Petrie, also of counsel.
Proposals
The wife seeks that the ‘contributions’ of the parties be assessed at 50% each and that there be an adjustment in her favour of 4-8% for ‘s.75(2) factors’. In this respect the wife sought that, should the Court assess her contributions at less than 50%, the higher adjustment of 8% for ‘s.75(2) factors’ be made in her favour on the basis of justice and equity.
The husband seeks that the ‘contributions’ of the parties be assessed at 60% in his favour and that there be a further adjustment of 2.5% in his favour for ‘s.75(2) factors’. The husband also argued that there should be no adjustment in favour of the wife for ‘s.75(2) factors’.
Issues
The following issues were in dispute at the final hearing:
·whether the parties have provided ‘full and frank disclosure’ of all relevant property and financial resources;
·whether the monies used by the wife from the children’s bank accounts should be characterised as a debt owed to the children, or added back into the matrimonial property pool, or not considered as part of the property pool at all;
·whether there should be add-back of the monies the husband has used to pay his legal fees;
·the parties’ contributions made prior to and during the relationship;
·the parties’ contributions made following separation;
·whether the contributions of the wife should attract additional weight because of alleged domestic violence by the husband;
·whether the potential inheritance of the husband from his mother should be considered as a financial resource available to the husband; and
·the parties’ respective future needs and obligations.
There were a number of other issues in dispute at the commencement of the final hearing that were resolved, or at least compromised, by the conclusion of the final hearing on 15 March 2013:
·firstly, the husband had asserted that the parties had a debt to the husband’s mother in the sum of $60,000; this alleged ‘debt’ was not agitated at the final hearing but rather the husband argued that the monies received from the husband’s mother be considered a further ‘contribution’ by him; and
·secondly, and after lengthy deliberations on the issue, the wife did not agitate that her considerable legal fees be considered a ‘liability’ of the relationship, but rather argued that this debt should to be taken into account when considering the wife’s financial circumstances.[8]
[8] Transcript, 5 March 2013, page 5 (noting that I clarified this point with counsel who informed the Court that the wife’s outstanding legal costs were not to be considered as a matrimonial liability in these proceedings).
Evidence of the parties
Both parties provided the Court with affidavit and oral evidence and were cross-examined. No other person was required for cross-examination at the final hearing.
A number of documents were tendered by each party in support of their case which have been considered as part of this decision.
Applicant wife’s evidence
The following documents were relied upon by the wife:
· amended Initiating Application filed on 21 March 2012;
· the wife’s affidavit sworn on 10 August 2012 and filed 13 August 2012;
· the wife’s affidavit sworn 15 February 2013 and filed 18 February 2013; and
· the wife’s Financial Statement sworn and filed on 15 February 2013.
Overall, the wife presented as a highly emotional person and many of her answers were unfocused, vague and contradictory. The wife clearly remains distressed about both the breakdown of the relationship and the future needs of herself and the children. I agree with Ms Petrie’s submission that the wife was prone to exaggerating her evidence and minimised those contributions made by the husband. The wife asserted that the husband treated her and the children poorly during, and indeed after, the relationship. The wife has clearly been the primary carer for the children and continues to provide love and support to her children, although I note that both girls are now over the age of 18.
Respondent husband’s evidence
The husband relied upon the following at the final hearing:
·the husband’s Amended Response filed 29 August 2012;
·the husband’s Financial Statement sworn 28 August 2012 and filed 29 August 2012; and
·the husband’s Affidavit sworn and filed 27 February 2013.
The husband presented as a somewhat more focused witness, however, he was also prone to being vague in his answers to relatively straight-forward questions. By and large he had a good recollection of the relevant transactions in a general sense, but required supporting documentation, such as his passbooks, to provide specifics or to prompt his memory. The husband’s evidence about the level of casual work he is currently engaged in was difficult to believe as was the degree of his candour in disclosing all relevant financial documentation. For example, on the second last day of the final hearing the husband provided a number of passbooks to the Court which had not previously been seen by the wife or her legal representatives.
Law and discussion
Prior to considering the law underpinning a property settlement between parties to a marriage, the Court will consider the preliminary issue of whether the parties, and in particular the husband, have fulfilled their obligations as to ‘full and frank disclosure’ of financial circumstances.
Issues of disclosure
Regulation 24.03 of the Federal Circuit Court Rules 2001 (the “Rules”) states that:
“(1) A party required under this Part to file a financial statement or affidavit of financial circumstances must make in the statement or affidavit a full and frank disclosure of his or her financial circumstances, including details of:
(a) any vested or contingent interest in property (including real or personal property, superannuation and legal and equitable interests); and
(b) income from all sources, including any benefit received in relation to, or in connection with, the party's employment or business interests; and
(c) the party's other financial resources; and
(d) any trust:
…
(e) any gift or other disposition of property made by the party since the separation of the parties; and
(f) if there is a partnership, trust or company (except a public company) in which the party has an interest, copies of the 3 most recent financial statements and the last 4 business activity statements lodged by the partnership, trust or company.”
Apart from requiring each party in financial proceedings to file a Financial Statement, the Rules also require the production and supply of relevant documentation.
In this case, the husband is accused of not fulfilling his obligation to provide ‘full and frank disclosure’. The wife, through her counsel Mr Watkins, argued that the Court should not be unduly cautious in making findings in such situations where the husband has deliberately not disclosed relevant documents, citing the authorities which will be discussed below.
The wife accuses the husband of deliberate non-disclosure and referred the Court to the decision of Black & Kellner (1992) FLC 92-287; 15 Fam LR 343 (“Black”), a decision of the Full Court of the Family Court of Australia (“the Full Court”). In that case, the Full Court (which consisted of Nicholson CJ, Ellis and Cohen JJ) found that the “assets of the parties could not be ascertained in full because of obvious non-disclosures.”[9] This non-disclosure impacted on the ability of the first instance Court to properly ascertain and distribute the matrimonial property. The matter before the Full Court was an appeal by the husband, who was the party who had not made full and frank disclosure, against an order entitling him to a miniscule portion of the property brought into the relationship by the wife. In his judgment, Nicholson CJ (with Ellis and Cohen JJ agreed) dismissed the husband’s appeal, stating:
“I might perhaps add that speaking for myself, although I note that there is no cross-appeal, I would have been disposed to find that the appellant was entitled to nothing, and certainly would not have interfered with a decision by his Honour dismissing the husband's claim entirely. Indeed it may well be that he was fortunate to get the award that he did.”
[9] Black & Kellner (1992) FLC 92-287; 15 Fam LR 343, page 347.
Mr Watkins also referred the Court to the case of Livesey & Jenkins [1985] All ER 106, a decision of the House of Lords referred to in Black which underscored the fundamental nature of proper disclosure in the family law context, as contrasted with other areas of civil litigation. Finally, Mr Watkins referred to the case of Weir & Weir (1993) FLC 92-338; (1992) 16 Fam LR 154 in which the Full Court, (this time comprised of Nicholson CJ, Strauss and Nygh JJ) stated:
“It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”[10]
[10] Weir & Weir (1993) FLC 92-338; (1992) 16 Fam LR 154, page 159.
In reply, Ms Petrie for the husband interestingly pointed out that the wife issued no subpoenas to the relevant banks.[11] One would think this was the most straight-forward and potentially cheaper way to get access to that material. In addition, Ms Petrie criticised the wife’s solicitors for serving a Notice to Produce upon the husband on Friday, 8 March 2013, being after the matter was part-heard and due to return the following week. The husband submits that this was unreasonable in the circumstances.
[11] Transcript, 15 March 2013, page 87.
Ms Petrie conceded that the husband could be criticised for not disclosing his income from (omitted) and (omitted) jobs. Under cross-examination, the husband stated that he disclosed his affairs to the best of his knowledge.[12] I am minded to believe the husband on this point, as when he was asked to bring in his passbooks, he did so the next day and even went so far as to bring in his mother’s passbooks. It did not appear that the husband was actively trying to hide or deliberately deceive the wife, but rather misunderstood the nature and perhaps the depth of the disclosure required.
[12] Transcript, 13 March 2013, page 15.
That said, the husband clearly failed to disclose the income he derives from his “hobby” of (omitted) and (omitted).[13] Again this evidence was quite confused, however it appears the husband receives about $100.00 a week from these activities. Mr Watkins cross-examined the husband on the passbooks that he produced on 14 March 2013. After some (yet again confusing) evidence about the timing of the transactions, it emerged that in March 2013 the husband received about $840.00 from (omitted) alone.[14] The husband asserts he receives about $100.00 a fortnight from (omitted).[15]
[13] Transcript, 13 March 2013, page 52.
[14] I understand from the evidence that these payments were for several weeks work and the payments are not made on a regular basis.
[15] Transcript, 14 March 2013, page 9.
On the whole, I am not convinced that the husband’s conduct is at the objective level of seriousness that would merit the approach advocated in some of the cases referred to by Mr Watkins.
The ‘four steps’
Section 79(1) of the Act provides that the Court may make such orders as it sees fit altering interests in matrimonial property. The Court’s discretion is not unlimited and must be exercised in accordance with the factors set out in the legislation, more specifically, in s.79(4).
The preferred approach to the exercise of the discretion has been outlined in numerous decisions of the Full Court of the Family Court, more recently in cases like In the Marriage of Hickey (2003) 30 Fam LR 355; (2003) FLC 93-143. That approach involves four interrelated steps:[16]
·Step 1: identify and value the parties’ property, liabilities and financial resources as at the date of the final hearing;
·Step 2: identify and assess the parties’ ‘contributions’ within the meaning of s.79(4)(a), (b) and (c) and determine the parties’ contribution-based entitlements expressed as a percentage of the net value of the parties’ property;
·Step 3: identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g) (the other factors) including, because of s.79(4)(e), the matters referred to in section 79(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution-based entitlements of the parties established at Step 2; and
·Step 4: consider the effects of those findings and resolve what order is just and equitable in all of the circumstances of the case.
[16] L Young, G Monahan, A Sifris, R Carroll, Family Law in Australia, 8th ed, LexisNexis Butterworths, Australia, 2013, at [13.8].
Step 1: Indentifying the Asset Pool
As stated, the Court must firstly identify and value the parties’ property, liabilities and financial resources as at the date of the final hearing.
Joint Balance Sheet
The following tables represents the joint balance sheet tendered by the parties (see Court Exhibit “A”):[17]
[17] In the table, ‘H’ refers to property registered in the husband’s name or otherwise legally owned by him or in his possession; ‘W’ refers to property registered in the wife’s name or otherwise legally owned by her or in her possession and ‘J’ denotes property registered in the joint names of the husband and the wife.
Assets
Valuation
Property N (H) $1,037,500.00 Property O, (J) $900,000.00 Property E (H) $700,000.00 Property A (J) $370,000.00 (model omitted) motor vehicle (W) $20,000.00 (model omitted) motor vehicle (H) $3,000.00 (omitted) shares (H) $2,547.00 (omitted) Account (W) $890.00 Furniture (H) $1,000.00 (omitted) Investment Account No.. (omitted) (Passbook Account) (H) $6,605.00[18] (omitted) Saver Account (H) $18,838.00 (omitted) Term Deposit Account No.. (omitted) (H) $52,000.00 (omitted) Savings Account No.. (H) $0 (omitted) Cheque Account No.. (omitted) (H) $290.00 (omitted) Savings Account (omitted) (H) $7,283.00 (omitted) Savings Account No.. (omitted) (H) $18,967.00[19] (omitted) Term Deposit Account No.. (omitted) (H) $12,302.00 (omitted) Bank Account (J) $0 (omitted) Term Deposit Account No.. (omitted) (H) $10,000.00 Money taken by husband from joint account (H) $0 Burial plots x 2 (J) $11,300.00 Furniture (W) $5,000.00 Cash in Property N property (H) $0 (model omitted) (Y’s car) (W) $1,500.00 Subtotal/Assets
$3,179,022.00
Liabilities
Monies owed to children’s accounts (W) $35,000.00(W)
$0 (H)
Legal fees (W) $140,563.00[20] Special Levy – Property A property (J) $8,076.00 Debt to husband’s mother (J) $0[21] Subtotal/Liabilities
$183,639.00(W)
$8,076.00 (H)
Superannuation
(omitted) Super (H) $3,474.00 (omitted) Super (H) $8,008.00 (omitted) Super (H) $4,541.00 (omitted) Super Plan (H) $18,083.00 (omitted) Super (W) $17,789.00 Subtotal/Superannuation
$51,895.00
[18] The husband asserts that he withdrew $4,000.00 from this account on in about February 2013 to pay his lawyers (Transcript, 13 March 2013, page 67).
[19] The husband asserts that he withdrew $6,000.00 from this account on 1 March 2013 to pay his lawyers (Transcript, 13 March 2013, page 67).
[20] This figure was subsequently revised after additional days of hearing time were required.
[21] This was not pursued at the final hearing.
As can be seen, with respect to the real estate, the values of the four relevant properties are agreed upon between the parties.
In relation to superannuation, there are several relevant policies; four in the husband’s name and one in the wife’s name. That said, neither party seeks a superannuation splitting order.
It was also agreed between the parties by the end of the final hearing that the husband would pay an outstanding strata levy in the sum of $8,076.00 in respect of the Property A property with the characterisation of this payment to be factored into the final decision.
In addition to the above table, the wife asserts that the husband has a financial resource available to him in the sum of $800,000.00 being the inheritance he could potentially receive from his mother’s estate. In support of this, a valuation of the husband’s mother’s residence was tendered and marked as Exhibit “AW5”. After objections were heard, this document was admitted into evidence only as to the value of the relevant property obtained by the wife.
Agreed division of assets
By the commencement of the final hearing, and subject to any monetary adjustment, there was agreement between the parties over the division of the specific real and personal property of the parties. The following tables represent the agreed division of assets (see Court Exhibit “B”):
a)The wife retain the following assets:
| NO. | DESCRIPTION | VALUE |
| 1 | Property O, | $900,000.00 |
| 2 | Property A, | $370,000.00 |
| 3 | (omitted) Account | $890.00 |
| 4 | Furniture | $5,000.00 |
| 5 | Funds expended by wife from children’s bank accounts | $0 |
| 6 | (omitted) Super | $17,789.00 |
| 7 | (model omitted) motor vehicle | $20,000.00 |
| 8 | (omitted) (Y’s car) | $1,500.00 |
| Total | $1,315,179.00 |
b)The husband retain the following assets:
NO. DESCRIPTION VALUE 1 Property N $1,037,500.00 2 Property E $700,000.00 3 (model omitted) motor vehicle $3,000.00 4 477 (omitted) shares $2,547.00 5 Furniture $1,000.00 6 (omitted) Investment Account No.. (omitted) (Passbook Account) $6,605.00 7 (omitted) Saver Account $18,838.00 8 (omitted) Term Deposit Account No.. (omitted) $52,000.00 9 (omitted) Savings Account No.. $0 10 (omitted) Cheque Account No.. (omitted) $290.00 11 (omitted) Savings Account (omitted) $7,283.00 12 (omitted) Savings Account No.. (omitted) $18,967.00 13 (omitted) Term Deposit Account No.. (omitted) $12,302.00 14 (omitted) Bank Account $0 15 (omitted) Term Deposit Account No.. (omitted) $10,000.00 16 Money taken by husband from joint account $0 17 Burial plots x 2 $11,300.00 18 Cash in Property N property $0 19 (omitted) Super $3,474.00 20 (omitted) Super $8,008.00 21 (omitted) Super $4,541.00 22 (omitted) Super Plan $18,083.00 Total $1,915,738.00
Clearly the agreed distribution is a division of gross assets and any division of assets will need to factor in any liabilities.
Areas in dispute
To determine the net available property pool several matters require determination:
·whether the money taken by the wife from the children’s bank accounts in the sum of $35,000.00 should be considered a liability owed by the parties to the children or is it matrimonial property that should be added back to the property pool?
·whether the husband should ‘add-back’ the monies paid by him in respect of legal fees during the course of these proceedings?
·how should the Court characterise the recent payment by the husband of the special levy owed in respect of the Property A property?
·whether the husband’s potential inheritance from his mother (asserted by the wife to be in the vicinity of $800,000.00) should be taken as a financial resource available to the husband?
Children’s bank accounts
This was certainly one of the main issues of contention between the parties at the final hearing.
The wife conceded that there has been intermingling of the funds for the children and herself. That said, she was also adamant that those monies were earmarked for the children and/or to be given to them as gifts for their 21st birthdays, weddings, etc. The wife asserts that she used those monies when she had to for general living expenses and that such monies can be traced for that purpose. The wife further asserts that she did not spend this money unreasonably or wantonly.
It was clear to the Court from the wife’s own evidence that the funds accumulated via the children’s bank accounts were essentially matrimonial monies. I note that these monies included the funds received by the parties from two insurance claims relevant to the matrimonial property. One exception, of course, is the compensation payout of $10,000.00 that was received from the owners or insurers of the (omitted) following an accident in 2003 that injured the parties’ child X[22]. That said, the Court is also satisfied that the wife withdrew funds from these accounts and used these monies towards living expenses of herself and the children and were generally necessary expenditures (although the wife acknowledged funding a post-separation cruise holiday for herself and the children).[23]
[22] Husband’s affidavit filed on 27 February 2013, at [68].
[23] Transcript, 6 March 2013, pages 86-88.
The wife asserts that the sum of $35,000.00 should be repaid to the children from the matrimonial asset pool.
In response, the husband asserts that the wife should ‘add-back’ these monies which he suggests total approximately $40,000.00. The husband refutes the wife’s claim that she spent about $15,000.00 of that money on the Property O property asserting that this property was already renovated and in good repair.[24] In this respect I note that the parties disagree on the state of liveability of the Property O property and the extent of the repairs and/or improvements that were required to be done to that property when the wife and children took occupation.
[24] Transcript, 13 March 2013, page 28.
I note that Mr Watkins for the wife submitted that the Court should not draw a ‘Jones v Dunkel’ inference (referring to the High Court’s decision in Jones v Dunkel (1959) 101 CLR 298)[25] because that the wife did not call the children to give evidence in these proceedings. Mr Watkins submitted that it would have been inappropriate to call children and that such should be avoided whenever possible in family law proceedings, particularly in this matter where the children’s relationship with their father is already strained.[26] Given the circumstances this submission is not unreasonable.
[25] For a discussion of the rule in Jones v Dunkel see JD Heydon, Cross on Evidence, 7th ed, Lexis Nexis Butterworths, Australia, 2004, at [1215].
[26] Transcript, 15 March 2013, page 82.
On balance, and considering that the evidence in relation to this issue is very uncertain, I am satisfied that the children are not owed these monies. While these monies were essentially sourced from matrimonial funds, as stated, I am also satisfied that these monies were used to fund the living expenses of the wife and the children and were, generally speaking, necessary expenditures.
Consequently, these monies will be neither recorded as a debt due by the parties nor added-back as an asset in the balance sheet.
Legal costs paid by husband
Both parties have considerable liabilities for the legal costs incurred in these proceedings as evidenced by the jointly tendered Costs Statement (which became Court Exhibit ‘C’) that stated:
“Wife’s costs to end of trial 14.3.2013 are $199,035.50 of which $7,053.50 has been paid.
Husband’s costs to end of trial 14.3.2013 are $67,480 of which $60,580 has been paid.
$17,000 has been paid by the husband since the joint balance sheet was agreed upon by the parties.”
The wife asserts that the husband paid his legal fees from matrimonial funds and, consequently, he should ‘add-back’ the amounts paid (being $60,580.00 of which $43,580.00 was paid before the joint balance sheet was agreed to). If the Court accepts this argument then presumably it follows that the wife would seek to do the same (in respect of the sum of $7,053.50 she asserts she had paid to-date for legal costs). That said, the wife would arguably assert that these monies were generated by her own post-separation savings.
The husband asks the Court to take a broader approach and says his savings have improved post-separation as can be seen in his financial statement. In this respect, the husband argues that he has paid his legal costs out of his own bank accounts and from his post-separation earnings.[27] Ms Petrie referred the Court to the husband’s Financial Statements as evidence of this assertion. She argued that:
·as at 25 February 2011, the husband had accumulated $108,230.00 in savings[28]; and that
·by 29 August 2012 the husband had accumulated $127,294.00 in savings[29]; and that
·by 6 March 2013 the husband had accumulated $133,453.00 in savings[30] (this figure decreasing to $116,453.00 after the husband paid a further $15,000.00 to his lawyers during the course of the final hearing).
While the Court accepts that the funds in the husband’s bank accounts appear to have increased by more than $25,000.00 in the period since early 2011, he has admitted causing the payments totalling $67,480.00 (or rather, as at the date of the final hearing, $60,580.00) to his solicitors as a result of these proceedings. However, the Court also notes that rental income from the party’s investment properties is paid into the husband’s bank accounts.[31]
[27] Transcript, 14 March 2013, page 36.
[28] Husband’s financial statement filed 25 February 2011
[29] Husband’s financial statement filed 29 August 2012
[30] According to Exhibit A tendered on 6 March 2013.
[31] Transcript, 14 March 2013, page 36.
The Court has a discretion as to whether legal costs are added back or not. Both counsel referred the Court to NCH & RCH (2004) 32 Fam LR 518; (2004) FLC 93-204 (“NCH & RCH”), a decision of the Full Court (consisting of Finn, Kay and May JJ). In NCH & RCH, the Full Court provided the following guidance:[32]
“[56] In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
[57]If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
[58]If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
[59]Outstanding legal fees themselves are generally not taken into account as a liability.
[60]If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the moneys used to pay the legal fees should also be taken into account.”
[32] NCH & RCH (2004) 32 Fam LR 518, pages 532-533.
It is clear that the husband has paid his legal fees from a source representing the joint assets of the parties. What is not clear is whether all or some of these funds represented post-separation earnings by the husband.
Given the uncertainty, I am not inclined to include all or some of the legal costs paid by the husband as an ‘add-back’ to the balance sheet.
Special levy
A special levy in the sum of $8,076.00 (relevant to the Property A property) was required to be paid by the parties by 16 March 2013. As stated previously, this property is registered in the joint names of the parties and, by agreement, is to be retained by the wife. Also of relevance is the fact that this property is currently leased and the rental payments are equally divided between the parties.
During the course of the final hearing, the wife asserted that she simply did not have the funds to pay the whole or even half of the required sum.
The husband eventually agreed to pay the total sum of $8,076.00 and asked the Court to make an adjustment for this in the final decision so that each party is responsible for half on the basis that it is a joint property and both parties are liable. The husband did not accept that the wife could not afford to pay her half.[33]
[33] Transcript, 13 March 2013, page 39-41
The disagreement between the parties over this issue is disappointing and clearly shows a need for the parties’ financial relationship to be severed.
At this point the Court is not inclined to make any adjustment in the husband’s favour for the recent payment by him. The Court considers this reasonable given the circumstances.
Potential inheritance by the husband
The wife advanced two arguments relevant to the husband’s mother and the fact that Ms Teasdales senior resides in a property valued at $800,000.00. Both arguments suggested that the husband’s mother’s property represented a financial resource available to the husband. The wife’s first argument was that the husband would be able to live in his mother’s property and thus generate further income by leasing the Property N property. The second argument was that, given that the husband is the only child of his mother, he is likely to inherit his mother’s estate.
In response, the husband argued that any potential inheritance from his mother is irrelevant and ‘purely speculative’[34]. His mother is alive, although elderly with health problems. As stated, the husband cares for his mother and he receives a modest Centrelink benefit of approximately $50.00 a week in recognition of his status as a carer (although the husband asserted that he spends that money, and more, on his mother). Regardless, the husband did not concede that he will inherit and suggested that any equity may be needed to place his mother in a nursing home.[35]
[34] Transcript, 14 March 2013, page 60.
[35] Transcript, 13 March 2013, page 71.
The husband also asked the Court not to accept the argument that he had an option of moving in with his mother in order to maximise his potential rental income. Ms Petrie submitted:
“… this argument from the other side that was suggested under cross-examination that my client has the capacity to move in with his mother is simply unreasonable. Your Honour, he is 61 years old. He has lived independently for more than 30 years. And there is no evidence before this court that his mother would even consent to such proposition. So in my respectful submission, that should not be taken into consideration under any circumstance.”[36]
Given the circumstances, this is not an unreasonable submission.
[36] Transcript, 14 March 2013, page 69.
Ms Petrie referred the Court to White & Tulloch v White (1995) 19 Fam LR 696; (1995) FLC 92-640 in which the Full Court (per Fogarty, Kay & Hilton JJ) determined that a subpoena issued to a party’s mother did not relate to material relevant to the case before the Court, predicated as it was on the suggestion that the party stood to inherit from her mother’s estate. The Full Court, after considering the authorities, determined that a prospective inheritance was too speculative to be considered as a financial resource, given that a testator can ordinarily change their will prior to their death and that a will has no legal effect until the death of the testator.
In the present case, given the evidence of the husband’s mother’s circumstances, I am not convinced that the assets of the husband’s mother are a realisable financial resource of the husband that the Court can take into account. I am not inclined to include the husband’s mother’s property as a financial resource of the husband.
Net value of asset pool
Given the above determinations, the Court finds that the net available property pool is $3,230,917.00 (including the parties’ superannuation entitlements). This is calculated as follows:
Assets
Valuation
Property N (H) $1,037,500.00 Property O, (J) $900,000.00 Property E, (H) $700,000.00 Property A, (J) $370,000.00 (model omitted) motor vehicle (W) $20,000.00 (model omitted) motor vehicle (H) $3,000.00 477 (omitted) shares (H) $2,547.00 (omitted) Account (W) $890.00 Furniture (H) $1,000.00 (omitted) Investment Account No.. (omitted) (Passbook Account) (H) $6,605.00 (omitted) Saver Account (H) $18,838.00 (omitted) Term Deposit Account No.. (omitted) (H) $52,000.00 (omitted) Cheque Account No.. (omitted) (H) $290.00 (omitted) Savings Account (omitted) (H) $7,283.00 (omitted) Savings Account No.. (omitted) (H) $18,967.00 (omitted) Term Deposit Account No.. (omitted) (H) $12,302.00 (omitted) Term Deposit Account No.. (omitted) (H) $10,000.00 Burial plots x 2 (J) $11,300.00 Furniture (W) $5,000.00 (omitted) (Y’s car) (W) $1,500.00 Subtotal
$3,179,022.00
Superannuation
(omitted) Super (H) $3,474.00 (omitted) Super (H) $8,008.00 (omitted) Super (H) $4,541.00 (omitted) Super Plan (H) $18,083.00 (omitted) Super (W) $17,789.00 Subtotal
$51,895.00
Total gross assets $3,230,917.00 (less) Liabilities Not Applicable $Nil Total net assets $3,230,917.00
Step 2: determining the contributions made by each party
It is clear from the evidence that the parties have, throughout much of their relationship, specialised their respective roles into that of significant ‘breadwinner’ and significant ‘homemaker and parent’. This is quite a normal and sensible division of labour in our society that usually advances both the financial prosperity, and the welfare, of the couple and their children.
While there is no presumption that such specialised roles equalise for contribution assessment purposes,[37] an outcome favouring equality is not unusual in cases involving long relationships following an analysis of the evidence relevant to s.79(4)(a)-(c).[38] Of course, such an outcome may alter following consideration of the other s.79 factors, in particular s.79(4)(e).[39]
[37] In the Marriage ofMallet (1984) 156 CLR 605, In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335, In the Marriage of McLay (1996) 20 Fam LR 239; (1996) FLC 92-667.
[38] In the Marriage of McLay (1996) 20 Fam LR 239 at 248-250 (per Nicholson CJ, Fogarty and Dessau JJ).
[39] Ibid, at 250.
The Court is required to consider the parties’ contributions made on and from the commencement of their relationship,[40] during their relationship, and following separation.[41]
[40] In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499.
[41] In the Marriage of Ferraro (1992)16 Fam LR 1; (1993) FLC 92-657.
Financial and non-financial contributions
It is clear that both parties have made financial and non-financial contributions to the acquisition, conservation and improvement of the relevant matrimonial property. It is noteworthy that the parties have the benefit of not one but four unencumbered real properties; this is a credit to the sound financial management decisions of these parties, despite the mutual allegations as to secrecy with respect to money.
It is also clear from the evidence that the husband, through the parties’ decision to specialise their respective roles, has been able to contribute significantly more of his income and energy into making relevant financial and non-financial contributions than was the wife.
The husband came to the marriage owning two pieces of real estate, being the Property N property (which became the former matrimonial home) and the Property E property. Both those properties remain in the husband’s ownership and, in monetary terms, comprise more than 50% of the asset pool. Given these circumstances, the husband asserts that his financial contributions exceeded those of the wife throughout the marriage.[42]
[42] Transcripts, 14 March 2013, page 55.
The wife came to the marriage with savings of about $2,243.00 and some furniture. The wife says the inheritance she received in 1999 was applied towards the improvement and renovation of the Property N property which she organised. The husband conceded that some of those monies were used towards repairing/renovating the verandah. In addition, the wife says that she was responsible for maintaining that property.
The husband also asserts that his mother gave the parties $60,000.00 towards the purchase of Property O property. This money was allegedly used to pay the associated legal fees, stamp duty and conveyancing costs.[43] The wife disputes knowing anything about this but admitted under cross-examination that she may accept that such occurred if she was offered ‘proof’, but doubted that she would “take money from a pensioner”.[44]
[43] Transcript, 14 March 2013, page 25.
[44] Transcript, 5 March 2013, page 38.
The husband asserts that during their relationship, the parties living expenses were met by the rent received from the Property A and Property O properties.[45] The husband also gave evidence that the rental income received from the Property E property was used by the parties to pay the land tax on all the relevant rental properties and to generate capital for future investments.[46] He also asserts that this income was used by the parties to fund the purchase of more luxury type items for the parties.[47]
[45] Transcript, 13 March 2013, page 23.
[46] Transcript, 13 March 2013, page 22.
[47] Ibid.
The wife, understandably, asks the Court to consider her own contributions, not just to the conservation and improvement of the former matrimonial home, in which the parties and their children lived during their relationship, and her contribution to the parties’ living expenses, but her own competing family contributions that act to erode the significance of the husband’s on-going financial and non-financial contributions.
While the wife conceded that the husband made the greater initial financial contribution, the weight given to this contribution is lessened by the length of the marriage, the passing of time and her own off-setting contributions.
The party’s joint (omitted) Account account was a source of much debate at the final hearing. Each party alleges the other controlled that account and essentially misused funds. The husband argues that the wife controlled it and he does not know how it was used from 2008 until 2010 but presumes it was used for the wife and children’s living expenses. During that time, the husband says he ‘looked after himself’.[48] Somewhat ironically, the husband gave evidence that he ‘left it [the account] in her hand’ as he was always under pressure and threatened by the wife with the Apprehended Domestic Violence Order (“ADVO”) in place during this time.[49]
[48] Transcript, 13 March 2013, page 23.
[49] Transcript, 13 March 2013, page 24.
It appears in 2010 the husband withdrew about $4,800.00 from the joint account and closed it, using that sum to pay off the mortgage. The husband asserts that, despite the wife no longer having access to these funds, the wife still had the benefit of receiving half of the rent from the Property A property, her income from the (occupation omitted) and from (occupation omitted), as well as child support payments (albeit in nominal amounts). Of course, at this time, the husband had access to the other half the Property A rental payments as well as all the rental income flowing from the Property E property.
Family contributions (as homemaker and parent)
As has been previously noted, in addition to her contributions made pursuant to s.79(4)(a) and (b), I am satisfied that the wife was the primary homemaker for the parties and the primary carer of the children. Consequently, I find that she has made a significant contribution to the family pursuant to s.79(4)(c).
As has been previously noted, the wife was essentially the homemaker for the parties from the marriage until separation. There is some disagreement between the parties as to what each did in the home during the marriage, and particularly after the husband was medically retired in 2000. The wife was also the primary carer of children. That said, the wife worked full-time until Y was born and returned to work again before giving birth to X. It appears the wife has worked on a part-time or casual basis since the children were born. The family contribution by the wife as the primary carer of Y and X has continued post-separation.
Mr Watkins asks the Court to consider the case of Ferraro & Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335 and to recognise the wife’s homemaker contribution “not in a token way but in a substantial way”.[50]
[50] Transcript, 15 March 2013, page 78.
Unfortunately, the children’s relationship with the husband is one of estrangement. It appears to be conceded that the husband has had little to do with the children since separation, and arguably long before that.[51] The husband does not provide any financial support to the children. That said, the husband did pay child support in a nominal amount of about $30.00 a month (and down to $8.00 a month after X left school), however even this contribution ceased in mid-March 2013 when X turned 18. I agree with Mr Watkins that the husband avoided the questions put to him about financially supporting his children.[52]
[51] Transcript, 13 March 2013, page 46.
[52] Transcript, 15 March 2013, page 76.
The husband also had great difficulty in admitting that the wife was the primary carer for the children and insisted that this changed from 2000 when he was retired and, consequently, was around to assist as well.[53]
[53] Transcript, 13 March 2013, page 35
In this case the wife also argues that her contributions under s.79(4)(c) were made more arduous because of domestic violence at the hands of the husband.[54] The wife and children obtained an ADVO against the husband in December 2007. It appears that the relationship between the husband and the children has deteriorated since this time.
[54] Wife’s affidavit filed 13 August 2012, paragraphs 79-93; Transcript, 13 March 2013, page 64.
The Court notes that in Kennon v Kennon (1997) 22 Fam LR 1; (1997) FLC 92-757, Fogarty and Lindenmayer JJ stated:
“Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence…but its application is not limited to that.”[55]
[55] (1997) 22 Fam LR 1 at 24.
Later their Honours went on to make this comment:
“It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect…”[56]
[56] Ibid.
The wife also argued that the husband was controlling and oppressive during the marriage in relation to their finances. This can be demonstrated, says Mr Watkins, in the husband only agreeing at the very last minute to pay the special levy for the Property A property.[57] In support of this submission, Mr Watkins argued that, despite the parties agreeing the wife would get the Property A property, the husband has continued to retain one half of the rent from that property.[58]
[57] Transcript, 15 March 2013, page 80.
[58] Transcript, 15 March 2013, page 74.
The husband denies the wife’s allegations and says that he consented to the wife’s ADVO on a ‘without admissions’ basis and did not breach the terms of that ADVO, despite the parties residing under the one roof.[59] The husband also refuted the suggestion that he had been controlling and oppressive in relation to the parties’ finances. In this respect, Ms Petrie pointed to the wife’s access to monies during their relationship and following separation and her expenditure on various items including her own dental procedures.[60]
[59] Husband’s affidavit filed 27 February 2013, paragraphs 90-94. Transcript, 13 March 2013, page 62; transcript, 14 March 2013, page 64.
[60] Transcript, 14 March 2013, page 67.
During submissions, Mr Watkins specifically referred me to the Family Court case of Marando & Marando [1997] FamCA 9; (1997) 21 Fam LR 841; (1997) FLC 92-754 (“Marando”).[61] Marando concerned an elderly couple who had married in Italy in 1946. The father moved to Australia in 1951 and the mother, who was caring for their two children then born, followed with the children in 1957. The parties both worked, with the wife’s income from cultivating a market garden on the family property representing a substantial portion of the parties’ finances. Indeed, the mother’s financial contributions were noted to have been equal to that earned by the father from his full-time work, although the father also did additional income-producing work in his spare time. The mother also shouldered the primary load of caring for the home and the children, often in the midst of abuse and violence from the father, who consumed alcohol excessively. Through thrift and hard work the parties were able to acquire a further property in addition to the former matrimonial home. The length of the relationship eroded some of the parties’ earlier contributions. In his decision, Gee J allowed the father to remain in the former matrimonial home (due in part to certain evidence about the father’s precarious state of mental health) and distributed the investment property to the mother.
[61] Transcript, 5 March 2013, page 9.
In reply, Ms Petrie submitted that Marando is not relevant given that this “is not a case where the wife had nowhere to go”.[62] Ms Petrie went on to argue that if the wife’s alleged plight “was as dire as what the wife suggests” she would have left the former matrimonial home years earlier and sought accommodation in any one of the three investment properties.[63] This argument is persuasive given that the wife is the joint legal owner of two of the three investment properties. Moreover, the Property O property, which the wife and children did eventually move into, is located near the former matrimonial home. The more likely reason for the wife delaying her relocation to the Property O property was that she wished to undertake renovations and improvements to that property prior to occupying it.
[62] Transcript, 14 March 2013, page 69.
[63] Ibid.
I also note that the wife submits that she assisted in the management of the investment properties. There is certainly some evidence that would support this assertion. Moreover, the wife argues that she applied her income and government benefits for the benefit of the family and managed the family’s finances frugally and is unaware of how the husband applied his own income.[64] If I accept these submissions, it would seem to cast considerable doubt on the wife’s other submission that the husband was controlling and oppressive during the marriage in relation to their finances.
[64] The wife’s case outline, Part E.
Global or asset-by-asset assessment of contributions
Given the length of the parties’ relationship, and its history, the ‘global’ approach to the assessment of contributions is the most appropriate to the parties’ circumstances.
Contributions analysis
Overall, the evidence suggests that the husband made considerable pre-marriage contributions which have not been significantly eroded by the competing contributions of the wife. As the Full Court of the Family Court stated in the case of In the Marriage of Pierce (1998) 24 Fam LR 377:[65]
“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…”
[65] In the Marriage of Pierce (1998) 24 Fam LR 377 at page 386-387.
I am also satisfied that the wife has been the primary carer for the children and continues to provide significant support for them.
On the evidence before me, I do not accept the wife’s argument that her family contributions were made more arduous because of domestic violence or related controlling behaviour.
Consequently, and pursuant to s.79(4) of the Act, the Court assesses the parties’ respective contributions at 40% in favour of the wife and 60% in favour of the husband.
Step 3: section 75(2) and related factors
I now turn to the third step in the process of apportioning the assets available for distribution between the parties and refer to each of the relevant factors under s.79(4)(d) to (g) of the Act to which regard must be given.
Section 79(4)(d): effect of any proposed order upon the earning capacity of either party to the marriage
Apart from the agreed ‘loss’ of half of the Property A property rental income by the husband that will benefit the wife, the orders that I propose making in this matter will not affect the earning capacity of the husband and should improve the earning capacity of the wife.
Section 79(4)(e): matters referred to in sub-section 75(2) so far as they are relevant
(a) The age and state of health of each of the parties
There is a notable, but not uncommon, age difference between the parties with the husband now in his early sixties and the wife in her mid-forties. The husband has been retired from full-time work for many years and the wife engages in casual or part-time employment.
Both parties claim health concerns although the medical evidence supporting these claims was minimal.
(b) The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
As stated previously, the husband has been retired from full-time work for many years and the wife has, until relatively recently, been engaged in home duties including the care of the parties’ two (now) adult children.
The wife argues that she has limited future earning capacity as she has no qualifications.[66] The husband argues that his age and health militates against him engaging in full-time work and that, in addition, he is the carer of his elderly mother. The husband refutes the wife’s claim that he has a higher earning capacity than her.
[66] Wife’s case outline document, Part F
That said, it was clear from the evidence that both parties are currently employed on a casual basis by (omitted). The husband also admitted receiving income from casual (omitted) work (which the husband described as a ‘hobby’).[67] The wife also works casually as a (omitted) for the (omitted) and is generally employed for extended periods around the seasonal appeals.
[67] Transcript, 14 March 2013, page 31.
(d) Commitments of each of the parties that are necessary to enable the parties to support:
(i) himself or herself;
(ii) a child or another person that the party has a duty to maintain
Neither party has re-partnered. There is insufficient evidence before the Court to substantiate the husband’s assertion that the wife has re-partnered with her neighbour, Mr L (which she denies).
The two children of the marriage are living with the wife. They are both now adults.
The husband is the carer for his elderly mother.
(e) The responsibilities of either party to support any other person
I refer to the above comments.
(f) The eligibility of either party for a pension, allowance or benefits…
The husband is in receipt of a modest Centrelink benefit as he is his mother’s carer. The wife is not in receipt of any pension, allowance or benefit. Both parties have modest superannuation benefits. The husband does not appear to be drawing any payments at this time and the wife will not attain her retirement age for some years to come.
(g) Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable
This is a live issue in this case.
I am satisfied that the orders to be made in this matter will provide a reasonable standard of living for the parties having regard to their assets and liabilities and the circumstances existing at the present time.
(m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation
As stated previously, neither party has re-partnered and there is insufficient evidence before the Court to substantiate the husband’s assertion that the wife has re-partnered.
(o) Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
There are no other factors which the justice of the case requires to be taken into account that have not been discussed previously in this decision.
For the sake of completeness, I note that considerations under s.75(2)(h), (j) and (k) of the Act are not applicable here as neither party seeks final orders in respect of spousal maintenance. I also note that s.75(2)(c), (ha), (l), (n), (naa), (na), (p) and (q) as well as s.79(4)(f) and (g) of the Act are not applicable in the circumstances of this case (or in the case of s.75(2)(na), no longer applicable as the children are no longer eligible children for the purposes of child support).
Further adjustment analysis
In light of the above-mentioned circumstances, the Court agrees with the submissions made by the wife that there should be a modest adjustment in her favour pursuant to s.75(2) and related factors.
The wife is now middle-aged and has no recent history of full-time paid employment. Her prospects of obtaining paid full-time employment will be difficult unless she undertakes appropriate training. That said, in addition to the rental income she can be expected to receive if she retains the Property A property (or another rental property in lieu), the wife has the capacity to secure part-time and casual employment.
The Court does not, however, agree with the submissions made by the husband that there should be an adjustment his favour pursuant to s.75(2) and related factors. The husband has been retired for some years and is likely to continue to be in receipt of rental income for many years to come. Like the wife, he has the capacity to secure further casual employment. He will also be able to access some modest superannuation benefits in the shorter term. As stated, the Court is not persuaded that the possible inheritance that the husband may receive can be considered to be a financial resource belonging to him.
As to the relevant percentage, the Court finds that an adjustment of 5% in favour of the wife is appropriate given all the circumstances.
Final step: justice and equity
Section 79(2) of the Act provides that:
“The Court shall not make an Order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
The High Court of Australia, in Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; (2012) FLC 93-518, made a number of useful observations on the manner in which a Court’s power under s.79 is to be exercised, particularly with respect to the ‘just and equitable’ component of the Court’s formulation. The judgment of the majority (consisting of French CJ, Hayne, Keifel & Bell JJ) stated that:
“36. 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.”[68] (references omitted)
[68] Stanford v Stanford [2012] HCA 52, at [36].
The High Court then went on to say at [36] to [43]:
“36. … And while the power given by s 79 is not "to be exercised in accordance with fixed rules", nevertheless, three fundamental propositions must not be obscured.
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s.79(1)(a) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s.79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion ...
39. Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist … The question presented by s.79 is whether those rights and interests should be altered.
40. Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
41. …
42. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
43. By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.”
This case concerns a relatively long marriage where the children are now adults. It also concerns considerable pre-marriage contributions made by the husband which have not been significantly eroded by the competing contributions of the wife. That said, the wife’s contributions as homemaker and parent are significant.
The Court has earlier determined that on a contributions analysis, the matrimonial property should divided 40% in favour of the wife and 60% in favour of the husband. In addition, the Court is satisfied that a further adjustment of 5% in the wife’s favour to reflect s.75(2) and related factors is warranted. This produces an overall adjustment favouring the wife 45% to the husband’s 55%.
Based on the agreed valuations and determinations made by this Court, and assuming the net asset pool was liquidated, this represents an amount of $1,453,913.00 in favour of the wife and $1,777,004.00 in favour of the husband.[69]
[69] These figures have been ‘rounded’ to the nearest dollar.
The parties have, of course, reached agreement as to how the net asset pool should be divided (see Exhibit ‘B’). Consequently, what the parties seek from the Court is a determination as to a final payout figure; such being dependent upon the Court’s various findings and whether that outcome is just and equitable in all the circumstances.
The Court cannot ignore the reality of the substantial liability the wife has accrued in her legal costs. The evidence also indicates that the husband has paid about $60,580.00 towards his own legal costs to the date of the final hearing.
During cross-examination, the husband acknowledged having about $126,286.00 in savings,[70] although it is unclear if this figure took into account the recent payment of $17,000.00 that the husband made on account of legal fees. The figure also presumably excludes his superannuation entitlements. Ms Petrie asserted that the relevant savings were $116,453.00 as at 14 March 2013.[71] The husband, being over 60, has the ability to draw on his superannuation and is able to do casual work, more likely to a greater extent than was disclosed during the course of these proceedings. That said, the husband indicated that he does not wish to access his super at this time and does not know much about the specifics of this.[72] The Court can also not ignore the fact that he is an only child and that it is likely that he will receive some kind of inheritance, however indefinable, in the future.
[70] Transcript, 5 March 2013, page 9 and Transcript, 13 March 2013, page 33.
[71] Transcript, 14 March 2013, page 54.
[72] Transcript, 13 March 2013, page 33
The wife has accrued significant legal costs in the sum of $199,035.50. She has paid $7,053.50. The husband’s total legal costs are $67,480.00. He has $6,900.00 left payable on this amount.
The parties have benefitted from living in mortgage free properties and the receipt of rental income from three investment properties (and later two when the wife moved into Property O property). These investment properties are also unencumbered. At the end of the day, the parties are in a comparatively financially stable and healthy position.
Overall, the Court is satisfied that a just and equitable outcome requires the husband to pay to the wife the sum of $138,734.00.
The parties structured their finances so that each had their own bank accounts which it appears neither knew much about the other. There was a joint bank account and I do not accept the wife’s evidence that the husband asserted control over this account to her detriment. If anything, the wife had unfettered control over this account. Both parties criticise the other for their use of the funds in the joint account. The husband says he used withdrawn funds to pay off a mortgage and the wife says she used withdrawn funds for living expenses. The Court sees no reason to disbelieve either party.
Conclusion
There will be orders to reflect the agreed distribution of real and personal property as set out in Court Exhibit “B” and referred to in paragraph 48 of this decision.
In addition, there will be Orders for the husband to pay the wife the sum of $138,734.00 within the next ninety (90) days.
Subject to the above, there will also be Orders that each party retain all other property currently in their respective possessions, free of any claim from the other. This will include motor vehicles, monies standing to their individual credit in any bank or financial institution and any furnishings, household or personal effects, including jewellery.
Each party will also be required to indemnify the other with respect to any debts and liabilities standing in that party’s sole name.
There will also be an Order pursuant to s.106A of the Act as sought by both parties.
Both parties foreshadowed that they may make an application for costs after a final decision had been made by the Court.[73] In the event that a costs order is pressed then an Application in a Case and relevant supporting affidavit should be filed and the Court can consider these issues separately.
[73] Transcript, 5 March 2013, page 8.
In addition, I note that on 30 May 2011 I reserved the question of costs for the mention hearing that day and the Conciliation Conferences held on the 17 and 18 May 2011.[74] I also note that on 30 August 2012 Judge Kemp reserved the question of costs arising from the withdrawal and dismissal of the husband’s AIC in a Case filed on 16 August 2012. In the circumstances, and in light of this decision, I also see no reason or merit at present to depart from the general principle in s.117(1) of the Act that each party should pay their own costs.
[74] Orders made 30 May 2011, paragraph 5.
For all these reasons the Orders of the Court will be as set out at the commencement of these reasons for judgment.
Given the factors to which I have referred, I am satisfied that the Orders are just and equitable.
I certify that the preceding one-hundred and forty-eight (148) paragraphs are a true copy of the reasons for judgment of Judge Monahan
Date: 27 June 2013.
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Jurisdiction
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