Terzi and Terzi (No. 5)
[2019] FamCA 1009
•20 December 2019
FAMILY COURT OF AUSTRALIA
| TERZI & TERZI (NO. 5) | [2019] FamCA 1009 |
| FAMILY LAW – PROPERTY – Property adjustment – Undefended hearing – Where consideration of applicable principles – Where consideration of relevant contributions and s 75(2) factors – Where orders made for property adjustment. |
| Family Law Act 1975 (Cth) ss 69ZN, 75, 79 Family Law Rules 2004 (Cth) rr 11.02, 16.07 |
| Aleksovski v Aleksovski (1996) FLC 92-705 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Bevan & Bevan [2014] FamCAFC 19 Chapman & Chapman [2014] FamCAFC 91 Davey v Lee (1990) DFC 95-084; (1990) 13 Fam LR 688 Dickons & Dickons [2012] FamCAFC 154 Harris & Harris (1991) 104 FLR 458 Jarrah & Fadel [2014] FamCAFC 14 Russell & Russell (1999) FLC 92-877 Stanford v Stanford [2012] HCA 52 Teal & Teal [2010] FamCAFC 120 Terzi & Terzi [2019] FamCA 357 Terzi & Terzi (No 2) [2019] FamCA 490 Terzi & Terzi (No 3) [2019] FamCA 523 |
| APPLICANT: | Mr Terzi |
| RESPONDENT: | Ms Terzi |
| FILE NUMBER: | PAC | 2690 | of | 2016 |
| DATE DELIVERED: | 20 December 2019 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 15 November 2019 |
REPRESENTATION
| APPLICANT – SELF-REPRESENTED LITIGANT: | No appearance |
| COUNSEL FOR THE RESPONDENT: | Mr Cairns |
| SOLICITOR FOR THE RESPONDENT: | Auslawyers |
Orders
That upon noting that the wife has been appointed as trustee for sale of the property at B Street, Town C (“the Town C property”) being all of the land comprised, the wife do all things necessary to disburse the proceeds of sale of the said property as follows:
(a)in discharge of the mortgage secured over the Town C property;
(b) in payment of real estate agent’s commission and expenses on the sale;
(c)in payment of proper legal costs and disbursements of and incidental to the sale;
(d)in contractual adjustment of rates, levies and taxes in respect to the property;
(e)in payment to the wife of $2,620 representing funds expended by the wife on the property getting the property ready for sale;
(f)in payment of 40 per cent of the balance then remaining to the husband or as he may direct in writing;
(g) in payment of a further sum of $3,542 to the husband; and
(h) in payment of the balance then remaining to the wife.
That the wife do all things necessary to transfer to the husband her interest in the Y Shares.
Liberty to apply as to implementation or enforcement of these orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Terzi & Terzi (No. 5) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 2690 of 2016
| Mr Terzi |
Applicant
And
| Ms Terzi |
Respondent
REASONS FOR JUDGMENT
These proceedings relate to parenting and property issues between the applicant husband/father and respondent wife/mother commenced by the husband in June 2016.
The parenting aspect of the proceedings was heard undefended on 15 November 2019 and orders were made in relation to the child who at that stage was aged four. In summary the orders provided that the wife have sole parental responsibility for the child, that the child live with the wife and spend time with the father as determined by the wife.
Also on 15 November 2019 the wife was directed to file and serve an Outline of Case as directed by orders made on 9 August 2019 as an aid memoire to the Court, and upon receipt of that outline judgment was to be reserved to chambers on 2 December 2019.
The wife relied upon the following documents to support her application for property orders:
a)her Further Amended Response filed 18 October 2019;
b)her affidavit filed 18 October 2019;
c)her updated Financial Statement filed 18 October 2019;
d)the affidavit of Ms V filed 21 January 2019.
In her Further Amended Response filed 18 October 2019 the wife sought orders, in summary:
a)Pursuant to Rule 20.54 of the Family Law Rules 2004 (Cth) a warrant issue to the Australian Federal Police to be assisted by the New South Wales Police to remove Mr Terzi from the property at Town C (“the Town C property”) being all of the land comprised and to place the property in possession of the wife Ms Terzi;
b)Upon execution of the warrant of possession by the Australian Federal Police and/or the New South Wales Police, Mr Terzi is hereby restrained from entering upon the property at Town C or to have anyone acting on his behalf as his agent or servant enter upon the said property on his behalf after the property is in the possession of the wife and that thereafter the husband be restrained from coming within 250 metres of the said property;
c)The wife be appointed as trustee for sale of the Town C property and for such purpose the said property shall vest in the wife for the purposes of facilitating a sale of the property as provided for in orders made 31 May 2019;
d)The husband is hereby restrained from entering, occupying or remaining on the Town C property, from attending at or being within 100 metres of the said property, from doing any act or thing to impede the sale of the said property and from discussing or communicating with any real estate agent appointed to sell the said property matters related to its said sale;
e)The wife have exclusive occupation of the Town C property from this date forward pending final sale of the property;
f)That upon completion of the sale of the Town C property, the proceeds of sale shall be distributed as follows:
i)In discharge of the mortgage secured over the Town C property;
ii)In payment of real estate agents commission and expenses on the sale;
iii)Impairment of proper legal costs and disbursements of each of the parties of and incidental to the sale;
iv)An adjustment of rates, levies and taxes on the workforce property;
v)In payment to the wife of $2,620 representing funds expended by the wife on the property getting the property ready for sale;
vi)In payment of 90 per cent of the balance then remaining to the wife to be deposited into the wife’s solicitors’ trust account;
vii)In payment to the wife’s solicitors of $2,000 representing the sum of solicitor costs as per orders dated 19 June 2019 and 16 July 2019; and
viii)in payment of the balance then remaining to the husband.
g)That the wife shall do all things necessary and sign all documents to facilitate the transfer of the Y Shares to the husband;
h)That the wife shall be declared the sole legal and beneficial owner of:
i)Furniture and household contents in her possession;
ii)Any monies in bank accounts in her name;
iii)Any superannuation benefits the wife is entitled to prior to the making of these orders and any superannuation benefits the wife may in the future be entitled to; and
iv)any property in her name and/or possession.
i)That the husband shall be declared the sole legal and beneficial owner of:
i)furniture and household contents in his possession;
ii)any monies in bank accounts in his name;
iii)any superannuation benefits the husband is entitled to prior to the making of these orders and any superannuation benefits the husband may in the future be entitled to; and
iv)any other property in his name and/or possession.
j)That the husband indemnify and keep indemnified the wife for any debt in relation to the business;
k)That unless specified in these orders, each party shall be solely liable for, and indemnify the other against the following:
i)any liability encumbering any item of property to which the party is entitled pursuant to these orders; and
ii)any liability incurred in his or her name, which still exists at the date of these orders.
l)In the event that either party fails to sign any necessary documents or instruments or do any acts required or contemplated by these orders to be done, with such failure continuing 14 days, then the Registrar of the Family Court of Australia shall pursuant to section 106A of the Family Law Act 1975 (Cth) have the power to execute any documents or instruments in the name of the person who has refused or neglected to sign any necessary document or instrument or to do any act required or contemplated by these orders;
m)Liberty be granted to relist the matter on seven days’ notice in relation to the limitation of these orders; and
n)That the husband pay the wife’s costs of and incidental to this response.
Background
The history of the parties’ relationship is set out in the interim Reasons for Judgment delivered 31 May 2019: Terzi & Terzi [2019] FamCA 357
19. The wife is presently aged 36 and the husband is 42 years of age.
20.The parties were married in 2013 in Country N. The wife moved to Australia in 2014 and the parties commenced living together in the matrimonial home in Town C. The date of the parties’ separation is not clear on the evidence before me, and appears to be some time in 2016.
21.Prior to the marriage the husband purchased a property in Town C, now valued at $800,000.00. There is a mortgage on the property of $349,130.14. The property and the mortgage, as discussed below, are now are in the wife’s sole name and the mortgage is $6,006.08 in arrears.
22.The husband owned a one third share in a business at the time that the mother moved to Australia and she commenced working full-time in that business with the father. The mother and father each hold a one third interest in the business, which the parties agree is worth $30,000.00.
23.The Business is situated on the bottom floor of the Town C property.
24.The wife became pregnant in 2015 and the only child of the relationship a son, X (“the child”) was born in 2015.
25.In 2015 the husband began receiving letters threatening bankruptcy and at this time the husband caused the matrimonial home to be transferred to the sole name of the wife and the home and mortgage now stand in the wife’s sole name. The wife deposes that she signed documents relating to the Town C property without reading them, as her English skills were then not at a competent level and that she was very unwell at the time due to being pregnant with the child.
26.Throughout the course of their marriage the husband has had control of the money earned from the parties’ business. The wife was not paid a wage. The husband was responsible for ensuring the mortgage repayments and other bills were paid. The wife deposes in her affidavit that throughout her marriage to the husband he would direct her to sign blank cheques and she did not know what these cheques were used to pay for.
27.Following separation the father has had the responsibility for meeting those mortgage payments and outgoings.
28.Following separation the child has been in the primary care of the wife and has not spent time with the husband since February 2017.
29.The wife is currently unemployed and is in receipt of government benefits.
30.The husband has been assessed to pay Child Support but has not fulfilled his obligation to financially support the child.
…
32.In February 2018, the Region G Council took legal action against the wife for unpaid council rates and sought that she pay $2,061.00 in repayment of the debt and fees associated with the legal proceedings. The court documents were served upon the mother being left at the Town C property, where the father resided and as such the mother had not been aware of the debt or the legal proceedings at the time. She deposes that it was the father’s responsibility to ensure these rates and levies were paid.
33.In November 2018 the wife took the child to Country N for a holiday and returned in January 2019.
34.Soon after the wife returned from Country N she became aware that the father had not made any mortgage repayments since 4 December 2018.
35.The wife deposes that the husband’s drug use and mental health issues have affected his capacity to work in the business and therefore make the repayments on the mortgage. In January 2019 the mother became aware that the business had ceased operating for a few weeks following an incident in which the father had become angry and yelled at customers to leave his business premises.
36.On 6 March 2019 the wife received a notice from the bank that her mortgage repayments were in arrears in the sum of $6,006.08, and that failure to repay this amount would result in the bank taking possession of the property…
On 7 March 2019 the wife filed an Application in a Case seeking interim property orders that the property situate at B Street, Town C (“the Town C property”) be sold and that she receive a distribution from the sale proceeds. The wife also sought an order that she transfer her one third interest in the business to the husband.
Such application came about as the wife is not in paid employment and was unable to meet the mortgage repayments and meet arrears.
On 15 April 2019 the husband did not attend Court and the wife’s interim property application was heard on an undefended basis. Orders were made that:
(1)The Application in a Case filed 7 March 2019 by the wife proceed to undefended hearing.
(2)That the parties shall do all acts and sign all documents, deeds and instruments necessary to list the Town C property for sale by private treaty with Company J at Town C, or other such Real Estate Agent as nominated by the wife (‘the Real Estate Agent’).
(3)That the Wife nominate and instruct a conveyancer or solicitor of her choice to act on the sale of the Town C property.
(4)That in the event that the Town C property has not sold by 15 April 2019, the Wife is at liberty to list the property for auction with the same Real Estate Agent and agree to the following terms:
(a)Such auction take place within one month from the date of placing the property for sale by public auction or as soon as practicable thereafter.
(b)The reserve price for such auction shall be determined by as agreed between the Wife and the Real Estate Agent.
(c)Failing agreement of the reserve price within 7 days of placing the property for sale by auction, the sale price shall be determined by a valuer appointed by the Real Estate Agent Institute of NSW whose direction shall be final and binding and the cost of such appointment and valuation to be met solely by the Husband, or as otherwise agreed between the parties.
(d)In the event that the bidding at the auction does not reach reserve price the Wife may negotiate with the highest bidders or any other interested person and effect a sale of the Town C property at a price that is not more than 5% below the reserve price.
(5)That upon completion of the sale of the Town C property the parties shall distribute the sale proceeds as follows:
(a)In discharge of the mortgage/s secured over the Town C property.
(b)In payment of the Real Estate Agent’s commission and expenses on the sale.
(c)In payment of conveyancer’s or solicitor’s fees, costs and disbursements.
(d)In payment of proper legal costs and disbursements of each of the parties of and incidental to the sale following production of genuine receipts.
(e)In adjustment of rates, levies and taxes on the Town C property.
(f)In payment to the Wife of the sum of $30,000.00.
(g)Pending further order, the balance is held in the Trust account of the Real Estate Agent appointed in accordance with these orders.
(6)Pending the sale of the Town C property, the Husband shall:
(a)Keep the property in good order and repair.
(b)Co-operate in all reasonable ways with requests by Real Estate Agents and/or prospective purchasers including but not limited to:
(i)Providing keys to obtain access.
(ii)Doing all things necessary to facilitate access to the property at all reasonable times and facilitating access for inspection without interference.
(c)Maintain the property in a presentable condition so as to facilitate the sale including but not limited to presenting the property in a neat and tidy condition at all times when the property is subject to inspection.
(d)Do all things necessary to facilitate a sale at the earliest possible time.
(e)Both parties shall refrain from doing or saying anything which has the effect of hindering or preventing an inspection or a sale of the property being effected.
(f)And give vacant possession not less than 14 days before settlement.
(7)Pending sale of the Town C property the Husband shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of the sale and shall make all such payments as and when they fall due.
(8)That the parties shall sign all documents, deeds and instruments necessary to cause the transfer of the Wife’s share in the Husband’s Business to the Husband.
(9)That in the event that either party fails to execute any deed or instrument necessary to give effect to these orders within 7 days of being requested to do so, the Registrar of the Family Court of Australia at Parramatta shall be appointed pursuant to section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and do all acts and things as may be necessary to give validity to the operation of the deed or instrument.
(10)The wife’s costs of and incidental to the Application in a Case are reserved.
(11)The solicitor for the Applicant wife provide an electronic copy of the proposed orders to the Associate in chambers within 2 business days.
(12)Reasons for judgment to be published on a date to be fixed.
(13)Either party have liberty to apply as to these orders for implementation or enforcement of these orders on short notice by application to the Court in chambers in appropriate circumstances.
On 31 May 2019 the matter was relisted for judicial case management and the Court was informed that the husband was preventing the sale of the Town C property. The husband failed to appear.
Subsequently, on 7 June 2019 the wife filed an Application in a Case seeking enforcement orders to facilitate implementation of the orders made for the sale of the Town C property and an interim property distribution to her of $30,000 following such sale with the remaining funds to be held in a controlled monies account pending further order of the Court.
The circumstances leading to the filing of that application are set out in the Reasons for Judgment of 19 June 2019: Terzi & Terzi (No 2) [2019] FamCA 490:
5.The wife’s affidavit deposes that the agent appointed to have the sale, Company J, Town C, has advised that the husband was refusing access to the property, but the agent would continue to attempt to seek access to the subject property.
6.On 8 April 2019, the husband communicated with the wife via text message informing her that he had purportedly sold a business that had previously been conducted in part of the premises of the Town C property. The communication, in the Country N language to the wife, threatened to kill the wife “with his own hands”.
7.The wife at that stage made no report to the police in relation to the threats made in the subject text message, but subsequently the police applied for an apprehended domestic violence order on her behalf, and on 6 May 2019 an interim apprehended domestic violence order was made for the protection of the wife against the husband.
8.Subsequently, the wife received communication that the husband had purported to sell and lease the business to named third parties. They informed the wife that they had provided to the husband 10 per cent deposit and had signed a document identified as the pre-lease agreement. The wife informed those third parties that the property was indeed to be sold and that she was not in agreement to the property being leased or the business being disposed of as sought by the husband.
9.The third parties subsequently informed the wife that they had ceased any intention of acquiring the business. One assumes that they will deal with the husband directly in relation to deposit moneys purportedly paid by them directly to him.
10.The wife has more recently been informed by the listing real estate agent that on several occasions they had attempted to have access to the property, but the husband continued to cause difficulties. There followed a series of email exchanges between the wife and the husband, and by email dated 24 May 2019 the husband informed the wife as follows:
I hereby give her full permission to sell my property and list it with any agent she desires to sell it … disburse the money received as she wants. I will not put a caveat on the property and will give permission for the real estate to sell the property as she desires. I will be leaving next week Thursday or Friday – which would have been Thursday, 30 May or Friday, 31 May. He then wished the wife best wishes and good luck.
11.The circumstances are the wife is unsure as to whether the husband has vacated the property and, not withstanding his professed intention to do so, she seeks to proceed to have enforcement orders made as sought in her application.
The husband again failed to appear at Court on 19 June 2019 and orders were made by way of enforcement as follows:
(1)The Applicant wife be appointed as trustee for sale of the property B Street, Town C NSW being the whole of the land contained and for such purpose the said property shall vest in the wife for the purposes of facilitating a sale of the property as provided for in orders made 31 May 2019.
(2)The Respondent husband Mr Terzi is hereby restrained from entering occupying or remaining on the Town C property, from attending at or being within 100 meters of the said property, from doing any act or thing to impede the sale of the said property and from discussing or communicating with any real estate agent appointed to sell the said property matters related to its said sale.
(3)The Applicant wife have exclusive occupation of the property situate at B Street, Town C NSW from this date forward pending final sale of the property.
(4)The husband pay the wife’s costs of and incidental to this application for enforcement.
Unfortunately, the wife was compelled to file yet another Application in a Case on 10 July 2019 to enforce the orders of 15 April 2019. The circumstances necessitating such an application are set out in the Reasons for Judgment delivered 16 July 2019: Terzi & Terzi (No 3) [2019] FamCA 523:
7.The present application comes before the Court in circumstances where the husband remains in occupation of the property and, it appears, has resolved not to comply with orders made by this Court.
8.The Court is reasonably satisfied that the husband has notification of the proceedings today, and as he has done in the past, it appears he has elected to not be represented or to appear in person in response to the application by the wife.
9.As to service, an affidavit of the solicitor for the wife that comprises Exhibit “A” has been filed in these proceedings.
10.The wife has now become registered proprietor of the property as trustee for sale pursuant to the Court’s previous orders, and notwithstanding the husband prevaricating in relation to the sale, she is anxious for the property to be sold as referred to in previous reasons for judgment in these proceedings.
11.The wife attended the property at Town C on 19 June 2019 and the wife arranged for locksmiths to attend the property and change the locks. She spent time cleaning the property that was in a disappointing state of repair and cleanliness.
12.On or about 8 July 2019 the wife discovered the husband had gained entry into the property, notwithstanding that she had changed the locks. The listing agent had contacted the wife and informed her that the husband was inside the premises and was refusing to comply with the agent’s request in allowing potential lessees or purchasers to inspect the property.
13.The wife attended Town S Police Station on 8 July 2019 and, in its essence, the police were not prepared to be engaged in the issues, it being a matter within the jurisdiction of this Court.
14.Accordingly, the wife seeks that a warrant for possession issue under the provisions of the rules so as to facilitate a bailiff appointed by the Court in removing the husband from the premises to provide to her vacant possession as previously ordered.
The husband again failed to attend Court on 16 July 2019 and ex parte orders were made that provided:
(1)Pursuant to Rule 20.54 of the Family Law Rules 2004 a warrant issue to the Australian Federal Police to be assisted by the New South Wales Police to remove Mr Terzi from the property at B Street, Town C being all of the land comprised as Lot … in Deposited Plan … and to place the property in the possession of the wife Ms Terzi.
(2)Upon execution of the warrant of possession by the Australian Federal Police and/or the New South Wales Police, Mr Terzi is hereby restrained from entering upon the property at … B Street, Town C or to have anyone acting on his behalf as his agent or servant enter to enter upon the said property on his behalf after the property is in the possession of the wife Ms Terzi and that thereafter the husband Mr Terzi be restrained from coming within 250 metres of the said property.
(3)The husband pay the wife’s costs of and incidental of the Application in a Case filed 10 July 2019 assessed in the sum of $1,000.00 with such sum to be paid to the wife from the proceeds of sale of the property at Town C to be held by the selling agent in accordance with orders made 31 May 2019.
On 9 August 2019 the matter came before the Court for case management. There was no appearance by or on behalf of the husband on this occasion. Trial directions were made in relation to readying the matter for undefended hearing.
On 15 November 2019 the parenting matter was heard undefended and orders were made as discussed above.
In regards to property issues, the wife was directed to file and serve an Outline of Case as directed by orders made on 9 August 2019 as an aid memoire to the Court, and upon receipt of that outline judgment was to be reserved to chambers.
Upon receipt of the wife’s case outline, the property judgment was reserved on 2 December 2019.
Procedural fairness
Rule 16.07 of the Family Law Rules 2004 (Cth) (“the Rules”) relevantly provides:
Parties' participation
(1) Each party to an application set down for hearing on the first day before the Judge must attend in person and, if legally represented, with their legal representatives.
Note: The court may dispense with compliance with a rule (see rule 1.12).
(2) If a party does not attend on the first day before the Judge, the other party may seek the orders sought in that party's application by, if necessary, adducing evidence to establish an entitlement to those orders in a manner ordered by the court.
Further, rule 11.02(2)(c) of the Rules provides:
(2)If a party does not comply with these Rules, the Regulations or a procedural order, the court may:
(c)determine the case as if it were undefended.
Considerations pertaining to an adjournment of proceedings, particularly in relation to parenting proceedings, were considered by the Full Court in Jarrah & Fadel [2014] FamCAFC 14. Ainsley-Wallace J referred to Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, in which the majority of the High Court said at [217]:
… delay and costs are undesirable and that delay has deleterious effect not only upon the party to the proceedings in question but to other litigants. … It would impact on other litigants seeking a resolution of their cases.
Her Honour made reference to the principles imposed upon judges conducting child-related proceedings and referred to the fifth principle set out in s 69ZN(7) of the Family Law Act 1975 (Cth) (“the Act”):
… that the proceedings are to be conducted without undue delay and with as little formality, and legal technicality and form, as possible.
Her Honour went on to say at [11] in Jarrah & Fadel (supra):
… The interests of justice are not the husband’s sole preserve. Delays in the resolution of the parenting proceedings have, no doubt placed stress and anxiety on the wife and perhaps caused her to incur costs. The children are represented and an Independent Children’s Lawyer has been appointed…
Such comments apply equally to property proceedings where a party refuses or fails to engage.
As set out above, the husband has failed to attend court events. The husband’s disengagement in the proceedings has previously resulted in interim property and final parenting orders being made on an undefended basis. As referred to above, the husband has also failed to comply with Court orders necessitating the filing of an application for enforcement by the wife.
The wife has filed evidence of the husband having been served with the documents she relied upon at hearing and having been advised of the process for him to appear by video link as at that point in time he was in custody for having breached an Apprehended Domestic Violence Order (“ADVO”) issued against him for the protection of the wife. Despite this, no such arrangements were made by the husband.
In such circumstances, it is clearly appropriate to consider property issues on an undefended basis in the absence of the husband.
Property
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19 and Chapman & Chapman [2014] FamCAFC 91.
Thus, the process ordinarily involves a staged process.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship. In particular, such a circumstance arises where both parties seek adjustive orders but are unable to agree as to same.
The circumstances of this matter as outlined above clearly demonstrated that it is appropriate and just and equitable for an order adjusting the property rights of the parties.
Once the s 79(2) issue is resolved, the Court then considers the contributions made by the parties as defined in s 79(4)(a) to (c).
The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The matrimonial pool
The B Street, Town C property based on a valuation filed with the Court on 21 January 2019 is valued at $800,000.
The wife has engaged a real estate agent who has commenced the process of selling the property. The wife deposes that there have been two interested buyers that offered $700,000 but both offers fell through. The property is yet to be sold.
The wife is unsure of the value of the parties’ business as the parties did not obtain an expert business valuation. The wife expects the business is not worth much as the business is not currently operating and was formerly operated from the property being sold and thus it will not be included as an asset on the balance sheet.
The mother gives evidence of an outstanding debt of the business to W Company of $1,318.53.
The assets of the parties as best can be determined are:
Assets:
Wife B Street, Town C property $ 800,000.00E
Wife CBA account $ 1,157.00
Wife Y Shares $ 4,600.00
Joint Household content $ 500.00
Wife Vehicle 1 $ 2,000.00
Wife Assets in Country N $ 3,000.00
Superannuation:
Wife Super Fund in Country N $ 9,100.00E
Liabilities:
Wife Mortgage B Street, Town C $ 356,699.00
The total net asset pool available for distribution minus the parties’ liabilities is, therefore, $463,658 subject to the ultimate sale price of the property.
The wife, otherwise, contends for two add backs to the matrimonial pool. She asserts that the husband sold equipment used in conducting his business and estimates the value of such equipment of approximately $10,000, however, provides no evidence to support this contention. Similarly, she contends that the husband has sold a shed that the parties bought for $5,000 in 2016 as “it is no longer on the property” but provides no evidence to support its inclusion as an add back to the balance sheet. As such, neither of these will be included as add backs on the balance sheet.
The orders of 2 November 2019 provided that the wife was to transfer the Y Shares to the husband. This has not occurred at this stage, however, this is to be included as an asset to be retained by the husband.
Contributions
In Aleksovski v Aleksovski (1996) FLC 92-705, Baker and Rowlands JJ said at 83,437:
It is therefore necessary that trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.
It really comes down to questions of weight. Whilst weight would and must be given to a contribution which a party makes shortly before the separation, less weight may be given to a contribution made by one of the parties to a marriage early in the cohabitation period of a long marriage, particularly in circumstances where the contribution has gone into the parties' assets or been used up in the payment of family expenses.
In the same case Kay J said at 83,443:
What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship. Just as early capital contribution is diminished by subsequent events during the marriage, late capital contribution which leads to an accelerated improvement in the value of the assets of the parties may also be given something less than directly proportional weight because of those other elements.
In Dickons & Dickons [2012] FamCAFC 154 the Full Court said:
23.We wish also to refer to the approach of the Federal Magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
24.There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
In Harris & Harris (1991) 104 FLR 458 the Full Court said in assessing contributions:
The task of the court in proceedings under section 79 [and thus s 90SM(4)] is not akin to an accounting exercise.
To borrow a phrase used by McClelland J in Davey v Lee (1990) DFC 95-084; (1990) 13 Fam LR 688 at 689 in relation to s 20 of the Property (Relationships) Act 1984 (NSW):
The Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind.
The wife contends that her contribution based entitlement to the net asset pool is 40 per cent.
The husband brought into the relationship the significant asset of the Town C property.
The wife made financial contributions to the relationship by working in the husband’s business at various times throughout the relationship as outlined above and was not paid a wage during this time. The wife also made a small financial contribution to the reopening of the husband’s business of $7,000 of which he repaid her $4,000.
Following separation the wife has also personally expended money in preparing the Town C property for sale. She provides evidence of receipts for money expended to the value of $2,648.
The wife also made significant non-financial contributions to the relationship. She was the primary homemaker during the parties’ relationship and following the birth of the parties’ child was the primary carer. Otherwise, the wife remained the primary carer for the child of the marriage, now just four years of age, until hearing.
Contributions clearly must favour the husband. Overall contributions will be assessed as 30 per cent to the wife and 70 per cent to the husband.
Relevant s 75(2) factors
The wife contends that a 50 per cent adjustment should be made in her favour based on her future needs.
The parties are aged 37 and 42 and both are in good health.
The wife has the sole care of the parties’ child who is only four years old. The wife has no familial support in Australia to assist with the care of the child and so as long as she remains living in Australia she will bear all the responsibility for the child.
She has historically received very little by way of child support from the husband and has, it appears, little prospect of receiving such support in the future. As at 11 October 2019, the husband had an outstanding child support debt of $2,336 with the Child Support Agency.
The wife is currently unemployed as she is responsible for the care of the parties’ young child. She is in receipt of a Single Parent Pension and Family Tax Benefit of $1,230 per fortnight. The wife has qualifications and is part way through a course.
However, as she has the full time care of the child and no support from her family who all live overseas, her capacity to obtain appropriate gainful employment is limited in the foreseeable future.
This is a small asset pool where future needs of the wife and child require significant recognition. Overall, there will be an adjustment arising from the above considerations of a further 30 per cent in favour of the wife. This will create a disparity of about $277,000 between the parties.
Overall
Overall, it is just and equitable to assess the parties’ overall entitlements as to 60 per cent in favour of the wife and 40 per cent in favour of the husband.
Accordingly, the asset pool excluding the Town C property is to be divided as to 60 per cent in favour of the wife and 40 per cent in favour of the husband.
The real property is to be sold and the net proceeds divided in the same proportion.
These other assets are:
Wife CBA account $1,157.00
Wife Y Shares $4,600.00
Joint Household content $ 500.00
Wife Vehicle 1 $2,000.00
Wife Assets in Country N $3,000.00
Superannuation:
Wife Super Fund in Country N $9,100.00E
Total: $20,357.00
The wife will retain the contents of the home and thus will be required to adjust to the husband $8,142 represented by the transfer of the Y Shares and a cash payment of $3,542 this representing 40 per cent of the non-real property assets.
Otherwise, the home will be sold as previously ordered with the wife to receive 60 per cent of the net proceeds less the adjusting payment to the husband and the husband receiving 40 per cent of the net proceeds plus the adjusting cash payment of $3,542.
Although orders have already been made for the sale of the Town C property and an interim distribution to flow from such a sale, as this has not occurred at this stage, orders will be made that the proceeds of sale will now be distributed in accordance with these reasons.
Orders will be made accordingly.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 20 December 2019.
Associate:
Date: 20 December 2019
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