TEMPLETON & TEMPLETON

[2019] FCCA 1533

FEDERAL CIRCUIT COURT OF AUSTRALIA

TEMPLETON & TEMPLETON [2019] FCCA 1533

Catchwords:
FAMILY LAW – Property dispute after over 20 years marriage – only assets being matrimonial home and husband’s superannuation – whether superannuation should be split – wife seeking to retain matrimonial home –  just and equitable in particular circumstances of the case that the wife retain the matrimonial home and the husband retain his superannuation.

Cases cited:
Stanford v Stanford [2012] HCA 52
Kennon v Spry; Spry v Kennon [2008] HCA 56
Keehan & Keehan [2015] FamCAFC 122

Applicant: MR TEMPLETON

Respondent: MS TEMPLETON

File Number: DGC 2224 of 2018

Judgment of: Judge Burchardt

Hearing date: 29 March 2019

Date of Last Submission: 29 March 2019

Delivered at: Dandenong

Delivered on: 17 June 2019

REPRESENTATION

Counsel for the Applicant: Mr Potter

Solicitors for the Applicant: Scammell Black Mileo

The Respondent: In Person

ORDERS

1. That the Respondent pay the Applicant $45,500.00 (“the payment”) within 60 days.

2. That in the event that the whole of the payment has not been made by the date, the real property situate at Street A, Suburb B, Certificate and Title Volume … Folio … on Plan of Subdivision No. … (“the property”), be forthwith sold together out of Court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:

   (a)Firstly to pay all costs, commissions and expenses of the sale;

   (b)Secondly to discharge the mortgage and any other encumbrance affecting the property;

   (c)Thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 7.5 per centum per annum adjusted monthly from the date to the wife.

3. That pending the payment or completion of the sale:

   (a)The Respondent have the sole right to occupy the property and during such right of occupation the Respondent pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;

   (b)The parties hold their respective interests in the property upon trust pursuant to these orders; and

   (c)Neither party encumber the property without the consent in writing of the other party.

4. That the Applicant forthwith upon payment pursuant to order (1) do all necessary acts and things and sign all necessary documents to transfer to the Respondent at the expense of the Applicant all his right, title and interest in the property.

5. That the Respondent be liable for and indemnify the Applicant against all payments in respect of Mortgage … in favour of the Commonwealth Bank of Australia.

6. That unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:

   (a)Each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders.

   (b)Insurance policies remain the sole property of the owner/beneficiary named thereon/in.

   (c)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

   (d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

7. The application of the Applicant on the 2 day of July 2018 otherwise be dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 2224 of 2018

MR TEMPLETON

Applicant

And

MS TEMPLETON

Respondent

REASONS FOR JUDGMENT

Background

1. This is a property dispute arising out of a marriage which lasted over 20 years. The parties are divorced but it is convenient to refer to them as husband and wife. The applicant husband seeks that there be a property division of either 60/40 or 62.5/37.5 in favour of the wife, depending on the view the court takes of the wife’s alleged failure to disclose.  The wife seeks that she retain the matrimonial home and pay the husband $40,000, with each party to retain their superannuation. Given that the only significant asset of the parties, the former matrimonial home, has a net value of about $272,500 and the husband’s superannuation is $150,000, and that of the wife being minimal, the wife’s proposal shows a stark difference between the parties.

2. Irrespective of the arithmetical outcomes that this case might give rise to, it is my clear view that the wife’s proposal is the one that represents a just and equitable outcome in the very particular circumstances of this case.

Agreed or uncontroversial relevant facts

1. The husband was born on … 1974 and the wife was born on … 1973.  Cohabitation started in 1991 and they were married on … 2003.

2. Their children, [X], born … 2002, and [Y], born … 2005, followed in due course.  There is a dispute as to when separation occurred with the husband asserting March 2017 and the wife asserting March 2014.  The facts might be said to support either version, but, in my view, nothing turns on it.  The parties were divorced on 8 March 2017.

3. The husband moved out of the matrimonial home, it would seem, in about mid to late 2013.  I say this, because in his first affidavit he deposed that he paid the home loan for some eight months after separation, with his last payment being in March 2014.

4. The children spent but little time with the husband.  It would appear he sees them each week for a meal, but only rarely, apart from that.

5. The wife has stayed in possession of the matrimonial home with the children since separation and has made all the payments that have been made in respect of the mortgage, which she has managed to remain on top of, the rates, in which she remains in arrears but has under control, and the other outgoings of the property.

6. The husband is employed as a tradesman for Employer and it seems he has been in that employment for many years.  The wife works in health care and has only recently obtained full-time work.  Given that she was working three days per week when she filed her Financial Statement on 15 August 2018 with an income of $1,179 per week, it is reasonable to suppose that at least for the moment her income is at least $600 greater.

7. The husband’s Financial Statement filed 29 June 2018 reveals a weekly wage of $1,505, together with expenses of $1,195.  However, that figure includes $147 for superannuation which is not a payment made by him but one paid on his behalf so that his net expenses are $1,050, a surplus of almost $500 per week.

8. The wife’s expenses were given in her Financial Statement as $876, but, once again, she has erroneously included $80 contributed to Super Fund C by her employer (this being almost exactly nine per cent of her weekly gross income) and her net surplus of income over expenses at that time was of the order of $379.

9. There are ongoing disputes about credit cards which it will be necessary to deal with separately.

The parties’ affidavits

1. I have read the parties’ affidavits, which are brief and in many ways by no means wholly informative, more than once. I have regard to the materials in them.  The only matters additional to those described above taken from the parties’ affidavits are as follows.

2. The wife has deposed in her first affidavit filed 15 August 2018 that she received an inheritance of $50,000 from her grandparents in 2001.  She complained that the husband had not paid child support until his wages were garnisheed. 

3. The wife further deposed to borrowing from her parent’s sums in the total amount of $23,817.  Contrary to the text of the affidavit these were not borrowed in one tranche in 2015, but rather advanced as annexures T1 and T2 show, from 2014 to 2018.  T1 is a document dated 20 August 2015 signed by both the wife and her parents which relevantly asserts that moneys had been loaned to her since the husband left and, “I agreed that I would reimburse them, should I sell my home.”

4. The affidavit also deposed to the borrowing of funds and their application to the credit cards debt at about the time of separation.

5. The husband’s affidavit material complains that he knew nothing of the credit cards until well after the end of the relationship.  In his second affidavit filed 8 March 2019 he deposed to an inheritance of $10,000 in about 2009 to 2010.  He deposed to withdrawals by the wife on the mortgage account on 7 November 2012 of $30,000 and on 22 January 2014 of $15,000.  He noted that the visa card debt was $8,600 at separation but that $12,240 had been paid off that sum on 3 December 2013 leaving a balance of just over $1,000, and that he had not provided the money.

6. The mother’s second affidavit filed 14 March 2019 deposes that the amounts now left in her superannuation with Super Fund C were only $1,086.  She deposed that there was no final separation until March 2014 because she and the husband were still trying to work things out.  She said that the NAB visa card had been paid out at separation and that only the husband used it.  She also complained that no child support was paid until 30 September 2014.

7. Annexure T8 shows that contrary to the husband’s earlier affidavit denials, the parties jointly borrowed $30,000 on 5 November 2012.  The wife deposed that $12,240 of this was applied to the visa card and a car was bought for $15,000.

8. She further deposed that $15,000 was used to pay out the then credit card debts, including some $9,400 in two tranches on the husband’s NAB credit card which has always been his alone. 

9. The wife deposed that she had withdrawn $2,088 on 27 November 2016 and $3,326 on 29 October 2018 on hardship grounds from Super Fund C, and for all the complaints made by the husband about disclosure, exhibits T1 and T2 to her affidavit seem to me to show this to be correct.

10. I note that at paragraph 26 the wife revealed that the matrimonial home was bought in … 2000 for $122,500 with a loan of $116,000.  This is the only indication in any of the materials that I can see as to when the property was bought and for how much.

11. It should be noted that the husband’s affidavit in reply filed 22 March 2019 is almost entirely composed of complaints about alleged

    
    

    non-disclosure on the wife’s part, something that the husband through his solicitors has certainly pressed at all times up to and including judgment.  I shall explain why I do not think the wife has been in any way significantly in default of compliance in relation to disclosure.  He would have done much better to have saved his money.

Stanford & Stanford

1. This is one of the very many cases which Stanford in fact envisaged, where the parties now conduct their financial affairs in a fashion radically different to that when they were married and both parties seek a property adjustment.  It is plainly just and equitable that there be one.

The pool

1. The parties agree that the pool consists of matrimonial home $557,500, husband’s motorbike $500 (the wife surmised that it was worth more but there is no evidence to support this surmise).

2. Mortgage Liability $285,000. Husband’s superannuation $149,000, wife’s superannuation $1,086.

3. These matters are all agreed or, in the case of the motorbike, are so small amounts as to be neither here nor there.  As I indicated to the parties during the hearing I do not propose to allot values to their cars or chattels, and, as I understand it, both parties were content for the court to adopt this approach.  None of these items have any meaningful realisable second-hand sale value.

The evidence and submissions given at court

1. What follows is taken from my notes.

2. The husband’s counsel opened and canvassed the outline of the relationship in helpful terms.  I note that he put the parties’ credit card debts as $15,300.  He asserted significant non-disclosure by the wife and submitted that there should be a 60/40 distribution in the wife’s favour, including a superannuation split.  It would be 62.5/37.5 if the court was not satisfied that disclosure had not been made.

3. The husband was called and adopted his affidavits and Financial Statement as true and correct. 

4. Under cross-examination by the wife who was self-represented, the husband confirmed that the wife had made such payments as have been made on the mortgage and rates for the last five years.

5. He did not agree that they had paid out the loan on a car and he denied that the wife had ever asked for spousal support.  He agreed that the Child Support Agency garnishes his wages.  He said he paid voluntarily before that, but there was a disagreement about the percentage of time the children were in his care.

The evidence and submissions of the wife

1. The wife opened her case.  She said she was working three days per week and had a minimal wage.  She had paid the mortgage, rates and raised the children by herself.

2. The wife said the husband had $150,000 in super and she had $1,000.  She proposed to pay the husband $40,000 and that he keep his superannuation.  The husband had been employed with the same employer for 20 years, would have plenty of long service leave and leave entitlements.  One of the children is on antidepressants and so is she.  She was diagnosed with cervical cancer last year and is under treatment.  She still works in health care.  The bank is prepared to lend her $40,000 plus the arrears of the mortgage.

3. The wife was called and adopted her affidavits and Financial Statement as true and correct.

4. The wife confirmed that she received an inheritance in 2001.  It was put to her that this was from a family trust, but she said it was from her grandparents.  There have been no further distributions.  She had taken $20,000 out because the house was a shell and required flooring.  They had bought a vehicle also.  They used their credit cards to get the home loan and she repaid this.

5. When taxed with failure to provide records, the wife said that they were joint accounts and the husband was as able to get accounts as she was.  She has no invoices relating to these matters which are now 20 years ago.  The car could have cost $12,000 to $15,000.  She could not say how much was repaid on credit cards.  All decisions were jointly made.  Both her grandparents are gone and the trust no longer exists.

6. The wife confirmed that there was no loan agreement with her parents.  Her parents would give her money for groceries and they then paid for his car.  The car had not been in her name. 

7. The wife conceded the husband worked and contributed appropriately during the relationship.  She did not accept that he had received a small inheritance of $10,000 in 2009, although if I understood it, she did not argue that he may have received something.

8. When questioned about the drawdown of $30,000 in November 2012, the wife said it paid off the National Bank credit cards.  The National Bank was in the husband’s name only.  The mortgage was in joint names.  When asked where the $12,240 that was applied to the credit card on 3 December 2013 came from, the wife did not know.  She has no other source of money and no recollection of where this money came from.  She asserted there had been another $30,000 loan later.  She had withdrawn money from her three superannuation accounts on a hardship basis, which led to two of the accounts being closed.  She thought she had provided the relevant bank records.  She posted her payslips to the solicitor for the husband and had not brought them today.  It emerged that the ones sent were apparently the originals.  Her employer has changed ownership and she will have to get replacements.  She had not received the husband’s bank accounts but worked out his pay from his tax forms.  The wife said she works in childcare and has no money.  She had asked for Super Fund C and had sent documents to the solicitor.  She is now working five days per week.  The family trust was cancelled in 2001.  She asked rhetorically why she should access her super on hardship grounds if she had moneys hidden.  She denied having any moneys concealed.

9. The wife said the relationship ended in about March 2014, not July 2013.  It was put to her that in January 2014 she had taken out an Intervention Order application against the husband’s new partner, she said that even after they were together (the husband and his new partner) she and the husband were still trying to sort it out.

10. The wife said her older daughter is undertaking a six year apprenticeship.  It is part-time.  It is a VCAL process.  She was not sure how much the daughter is paid.  It emerged, following questioning, that this six year period is perhaps an overestimate because the daughter may be able to compress the apprenticeship significantly if she undertakes it full time.

11. The wife was adamant that $10,000 had been paid to the husband at separation to pay off his credit card.

12. Counsel took the wife through the assets of the relationship and with the exception of the motorbike to which I have referred, she accepted the figures put to her.  I note that the visa credit card is $11,000 in debt and the NAB visa is $4,992.

13. An earlier debt to an ANZ visa card has apparently been paid off, even though the parties’ competing versions make it impossible for me to work out exactly who achieved this and in what proportions.

14. I note that while the wife is adamant that the husband’s NAB account was always his account only, it is her own case that she was allowed by the husband to use the ANZ and bank accounts post-separation.  The ANZ account is now of no moment since it no longer exists, but the bank account appears to be an issue of major moment to both parties.  In the scheme of the parties’ overall finances the amounts are, of course, fairly small.  Doing the best I can in these slightly murky circumstances, it seems to me that the $11,000 bank debt should be taken as a joint debt to be paid equally by the parties, but the NAB debt is the husband’s alone.

Contribution

1. This was a lengthy relationship in which both sides clearly did their best.  Both parties worked and the wife additionally brought up the children as their primary carer.  The amount of time the husband now spends with the children does not suggest he played a particularly significant role in the child rearing responsibilities.  However, he no doubt was always the greater earner and that needs to be borne in mind.  Each of the parties, as I find, received an inheritance.  The inheritance of the wife was received relatively early in the relationship and the $50,000 that she obtained was plainly, in my view, applied to the common purposes of the relationship.  It does not matter precisely what that application was, as there is no suggestion whatever of wastage.  This would undoubtedly have been a significant benefit to the parties.  Nonetheless, it needs to be borne in mind that this was some now almost 20 years ago and that is plainly a relevant consideration also.

2. Likewise, the husband’s $10,000, which I accept was what he inherited, would have been applied to the parties’ common benefit.  This was, of course, much later and in a far smaller amount.

3. The wife has paid the mortgage and utilities and rates to the extent that they have been paid since separation.  True it is that she has had the occupation of the matrimonial home with the children, but given that I can take judicial notice, notwithstanding the current downturn, that very significant increases in property values have occurred since 2013, this is also a matter that, in my view, should be given some weight.

4. Balancing these matters together and bearing in mind that these are invariably matters of impression and degree, I would assess the contributions of the parties taken globally at 55 per cent in favour of the wife and 45 per cent in favour of the husband.

The question of the wife’s duty to disclose

1. It is readily apparent that the solicitors for the applicant have spent a lot of time on this.  Little regard has been paid to the self-representation of the wife.  Not only that, but a number of the documents which were sought in cross-examination such as receipts from the original purchase of materials for the house and the like are so old that it was little short of risible that they were pressed.  I should make it clear that I thought both witnesses were truthful witnesses, albeit that their recollections in some respect differ.  The husband was only cross-examined for a very brief period of time and gave direct answers to the questions put to him.  He struck me, however, as being very intense and my impression was that he remained extremely angry with the wife.

1. It should be noted that the wife’s assertions of threats and the like, while they may well be true bearing in mind that the wife’s affidavit evidence that he was placed on a Community Services Order some sort of misconduct have not been challenged either in affidavit or cross-examination, it is not put that they rise to the level of a Kennon argument.  Nothing the wife said or did suggested that her contributions to the marriage during the marriage were rendered onerous in the fashion that Kennon describes.

2. The wife was, in my view, an honest witness.  She was palpably honest.  While one or two of her answers suggested a slightly insouciant attitude towards precision, I have heard and seen her give her evidence and I have no doubt that she is truthful.  It may well be, as counsel for the husband put it, that his instructor has not received the payslips and perhaps other documents that the wife says she has posted, but I think she has posted them and their non-arrival is just one of those unexplained things.  I do not think that the wife has been dilatory, save possibly in the most minor of ways about discovery, and I would not be making an adjustment against her as a result.

Future needs

1. The wife is a year older than the husband, but they are both only in middle years.  She is under treatment for cervical cancer, although no medical evidence has been provided nor any prognosis.  It is difficult to know what weight to give to that factor, if any, in these circumstances.  The husband is in unexceptionable health. 

2. The wife continues to have the sole care of the two children who are, even now, only 16 and a half and 13.  She will continue to have the expenses of child rearing for quite some time to come.  Furthermore, even assuming her income has increased because it is now five days per week, her income will always be substantially less than that of the husband.  He is in very secure long-term employment which has subsisted for decades.  She has been in employment for seven years and is presumably reasonably secure.  Nonetheless, she said that whether she retains five days per week as at present will depend on the work that is available, and that evidence was both given with conviction and not the subject of challenge in cross-examination.  In these circumstances, I would ordinarily allot a loading in the wife’s favour of 10 per cent.

Should there be a superannuation splitting order?

1. The husband has deposed – and correctly enough, indeed – that he will not be able to access his superannuation for a very considerable period of time.  That is plainly, as the law stands, correct.  There is certainly no suggestion he will need to access it on hardship grounds.  Indeed, lurking in the background somewhat, it appears that he is in a new relationship and may be residing with his new partner.  He has not condescended to put that person on affidavit, nor indeed said anything about the possibly joint circumstances of their relationship.  Once again, as with the wife’s ill health, it is not possible to be overly firm in any conclusions, but his future would appear to be bright.

2. The net value of the pool, leaving aside the credit card debts, is of the order, including superannuation, of some $422,500 ($272,500 net value of the house and $150,000 parties’ superannuation).

3. It is instantly apparent that any splitting order such as that proposed by the husband, who proposes an equalisation, will necessarily ensure that the matrimonial home has to be sold.  Counsel for the husband said that this was unfortunate, but unavoidable.

4. I accept that most, if not almost all, of the husband’s superannuation must have been amassed during the relationship.  Given the parties’ ages, ordinarily one would say that some form of superannuation division would be appropriate.  This is not, however, an ordinary case.

5. The wife’s position is that she desperately wishes to keep the home in which the children have grown up and which she has herself, effectively alone, paid for the last five years.  In my view, that is a very telling consideration.  If I make, effectively, almost any superannuation split the wife simply will not be able to pay the husband out.  Furthermore, the 80 to 90 per cent division in the wife’s favour overall that would need to be made of the non-superannuation assets would be simply not sustainable, according to ordinary principles applied in property division cases.  As I have said, my application of this methodology produces a figure of 65/35 and that is plainly not properly able to be increased to the sort of amounts the wife seeks.

6. Nonetheless, I think that justice and equity in this case requires the wife to keep the home.  Her proposal would actually give the husband approximately 45 per cent of the total pool, including superannuation.

7. While this is not the figure that, in percentage terms, either my own application of the standard methodology or that of the husband would produce, in my view, the gain that the husband makes in keeping a substantial superannuation which, by the time he is my age he will well and truly appreciate, and which given normal life span as it now stands is likely to be a very considerable benefit to him for a very substantial proportion of his life, together with $40,000 to get restarted, is a just and equitable outcome.

8. It is well-established that in some cases where the pool is small there are grounds for giving all or almost all of it to one or other party.  This case, in my view, could equally well be assessed against that criterion.  The fact is that if I make an order anything approximating what the husband seeks (i.e., making a superannuation split of any significant amount), the wife and the two children will be homeless.  She is most unlikely to be able to afford another home and certainly not anything remotely approximating the one that she presently has.

9. In these unusual circumstances, as I say yet again, an outcome that gives the husband his superannuation and the $40,000 is just and equitable. It should be emphasised that the requirement that the final result be just and equitable is an imperative one (see Keehan & Keehan [2015] FamCAFC 122).

10. It should be noted (if I have not said so already) that I accept that the husband’s NAB account was always his alone.  It was indeed paid out at or about separation and any extent debts are his.  The other card account must be divided equally between the parties.  I have drawn draft orders to reflect these conclusions and will give the parties an opportunity to consider them before making them final.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 17 June 2019