TUTT & TUTT

[2015] FCCA 762

FEDERAL CIRCUIT COURT OF AUSTRALIA

TUTT & TUTT [2015] FCCA 762

Catchwords:
FAMILY LAW  ̶  Whether allowance should be made for wife’s contribution after the husband left Australia  ̶  whether allowance should be made to wife because of the husband’s pension.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79

Mayne v Mayne [2011] FamCAFC 192
Shimyu v Tanner [2011] FamCA 271

Applicant: MS TUTT

Respondent: MR TUTT

File Number: DGC 3768 of 2012

Judgment of: Judge Phipps

Hearing dates: 10, 11, 12 September 2014

Date of Last Submission: 12 September 2014

Delivered at: Dandenong

Delivered on: 2 April 2015

REPRESENTATION

Counsel for the Applicant: Ms Phelan

Solicitors for the Applicant: Duffy & Simon

Counsel for the Respondent: Mr Potter

Solicitors for the Respondent: Chris Woods & Associates

ORDERS

1. That the amounts held in trust by Falcone & Adams and Duffy Simon be paid to the husband.

2. That the husband and wife do all acts and things and sign all such documents as may be required to transfer into the name of the wife all the real property situate at and known as [1] Property P, Victoria.

3. That on or before 30 May 2015 (the date) the wife pay the husband the amount of $303,753.68 (the payment).

4. That contemporaneously with the payment the husband and wife do all acts and things and sign all such documents as may be required to transfer into the name of the wife all the real property situate at and known as [2] Property P, Victoria (number 2).

5. That in the event that the whole of the payment has not been made by the date the husband and wife do all things necessary to sell number 2 and upon completion of the sale the proceeds be applied:

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

   (b)secondly to discharge any mortgage and other encumbrances affecting the property;

   (c)thirdly so much of the payment as is then outstanding together with interest at the rate of 8.5% adjusted monthly from the date;

   (d)fourthly the balance to the wife

6. The husband shall retain possession and ownership of;

   (a)his Peugeot motor vehicle;

   (b)the BP shares and Dragon Oil Shares in his name.

7. The wife shall retain possession and ownership of;

   (a)the Mercedes motor vehicle;

   (b)the Jaguar motor vehicle;

   (c)The karaoke machine.

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

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 3768 of 2012

MS TUTT

Applicant

And

MR TUTT

Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant wife, Ms Tutt, and the respondent husband, Mr Tutt were married for 33 years including the period of cohabitation prior to marriage. After immigrating to Australia they established a construction and development business.  After separation in March 2012 some properties they owned have been sold and the business has been wound up.  They do not agree on the distribution of their property.  The principal issues are how money received and used by each party after separation should be treated and whether the division of property should be equal or 55% in favour of the wife.

2. The parties agree that the contributions until the time of separation were equal.  The wife says there should be an adjustment in her favour because of her post separation contribution in winding up the business and caring for the younger child and because the husband has a United Kingdom pension of about $1,000 a month.

3. The property which is agreed is:

   Trust funds (Falcone & Adams)          $ 97,010.47

   Trust funds (Duffy Simon)                   $  11,613

   [1] Property P                    $460,000

   [2] Property P                    $370,000

   Property R, UK         $112,000

   Peugeot motor vehicle   $    6,200

   Mercedes motor vehicle   $    8,500

   Jaguar motor vehicle   $  78,000

   BP shares   $      780

   Dragon Oil Shares   $    7,080

   Karaoke machine   $    1,000

   Interim Fund distribution   $160,000

   Proceeds sale [D] property             $154,000

   Distribution September 2014                   $  40,000

   Total   $1,506,183.47

4. At the time of the hearing the trust funds held by Falcone & Adams were $194,597.  The parties acknowledge there was a liability to an electrician which might have been $38,000 and perhaps other liabilities.  At the conclusion of the hearing there was agreement for each party to draw $20,000.  A letter from the wife’s solicitors with accompanying documents from Falcone & Adams shows that the amount is now $97,010.47.

5. The wife lives in [1] Property P.  Number [2] is rented and she receives the rent payment.  The property in the United Kingdom was purchased by the husband after separation and the $112,000 is the amount the wife says the husband used from sale of matrimonial property for the purchase of that home.  The husband says it is $103,000.  The issue seems in part to be in the conversion rate from United Kingdom currency to Australian currency.  The difference is small and I will use the wife’s figure.

6. Each party has a small amount of superannuation.  The husband cashed in superannuation of $2,340.  The amounts are small and so I will not take them into account.

7. The husband receives a pension. The wife has had it valued using the Australian regulations at about $310,000. There cannot be a splitting order and the husband is not able to receive a lump sum. He receives about $1,000 a month and so it is relevant not as property but as a financial resource under s.75(2).

8. Each party applies for orders under s.79 of the Family Law Act 1975 (Cth). The basis upon which the parties lived together and conducted their finances in common has come to an end. It is just and equitable to make orders.

Background and history

1. The wife was born on [omitted] 1964 and the husband on [omitted] 1963.  The wife is 50 and the husband 51.  They married on [omitted] 1982 in the United Kingdom.  They moved to Australia in September 2001 and separated in March 2012.

2. There were three children of the marriage [X] born [in] 1990, [Y] born in] 1994 and [Z] born [in] 1996.  [Z] lives with the wife.  [Y] died after the parties separated and [X] lives independently.

3. Until 2005 the husband worked on a full-time basis as a [omitted] and the wife had several employers.  In July 2005 the parties [T] Pty Ltd which carried on the business of construction of residential premises under contract.  Both parties worked in the administration of the business and they make common ground that they contributed to the business and family equally until the husband left to live in the United Kingdom.

4. In addition, the parties had the Tutt Family Trust, with equal shares in [L] Pty Ltd, the corporate trustee.

5. Immediately prior to separation the parties were living in a home they owned in [O].  The wife moved to a rental property in [O] and then to [1] Property P.  The husband subsequently moved to [2] Property P and then returned to live in the United Kingdom.

6. At separation the trust owned properties at [G] and [D].  The husband commenced constructing a residential property on the [G] property which was sold part built.  Both properties have since been sold as has a property in [C].

7. The two properties in [P] were owned by [T] Pty Ltd since transferred to the parties.  The Mercedes motor vehicle and Jaguar motor vehicle are in the possession of the wife and the Peugeot motor vehicle in the possession of the husband.  The husband has the shares and the wife the Karaoke machine.  At separation the building company owned a truck. a compactor and an excavator, all of which have since been sold.

8. After separation when the wife moved to her own premises she spent $96,000 on appliances and furniture.  The valuation of the contents of her home now is $15,000.

9. Some questions were put to the wife about her spending on bingo.  The amounts she spent were small and certainly well within the bounds of reasonable entertainment expenses.

10. The husband moved to the United Kingdom and now lives there.  He sold two motor cars and some motorbikes and with money provided by relatives and friends he purchased the property in the United Kingdom.  Some cross examination of the husband went to the reasonableness of the sale prices.  The amount the husband received is not disputed and there is no other evidence.  The husband accepts that the proceeds of sale of motor cars and motorbikes should be included as part of the matrimonial assets.  He says it should be $103,000 and the wife says $112,000.  I will use the figure of $112,000.  The wife argues that because he has had the use of that money some allowance should be made as a notional interest benefit.  Using the figure of $112,000 incorporates any possible benefit there might have been.

11. During the marriage the parties paid their personal expenses using credit cards.  The credit card debts were paid from the company account and the amounts treated as drawings by the parties.  This continued to some extent after separation and then the parties agreed that each should draw $2,000 a week.  Once the proceedings commenced in November 2012 orders were made which continue to allow for payments which reduced to $1,000.

12. Evidence of the amounts which were paid to each party is in an annexure to one of the wife’s affidavits.  She was operating the company accounts and amounts paid to the parties were debited to each party’s account in the company ledger.  She debited against the husband’s account some amounts for maintenance at [2] Property P, the property in which the husband had been living and then the parties second child prior to his death.  These amount to some hundreds of dollars and in the context of this case make little difference.

13. In the 2012/13 period, commencing August 2012 the drawings of the husband in the ledger are $45,641.01.  The wife’s amount for the same period is $70,346.06, a difference of about $25,000.

14. In the following year the 2013/2014 period the drawings against the husband’s name are $3,836.85, but about $2,500 is maintenance expenses.

15. On 20 August 2013 the wife transferred $20,000 out of the SunCorp Mortgage Account into her account and on 9 September 2013 a further $25,000, a total of $45,000.  $9,000 was given to the parties’ daughter [Z] to purchase a motor vehicle.  Earlier, a similar amount had been given to the parties’ eldest child for a motor vehicle.

16. In October and November 2012 the wife went to the United Kingdom for a short period.  The evidence is not clear whether it was 10 days or longer.

17. The husband’s argument is that the wife has after separation received $70,000 more than the husband in drawings from the company account and the mortgage as well as spending $96,000 on household appliances and furniture, money the husband has not had.  The argument acknowledges that some of this money is reasonable living expenses.  On the wife’s evidence some has gone to legal expenses.  The argument is not that the amount should be added back but that it should be taken into account.  What the husband argues is that it offsets the advantage the husband has in having his pension.

Contributions

1. The parties have common ground that their contributions up to the date of separation are equal.  The husband left Australia on 10 December 2012.  Although the parties agree that they separated in March 2012 the husband stayed with the wife on occasions and they slept in the same bed, they had meals together and some social activity together.  In the context I do not consider they were still living together.  The wife argues that she made a greater contribution after separation but for this argument the relevant date is after the husband left Australia, 10 December 2012.  The wife argues that she was left to wind up the affairs of the company’s building business after the husband left and so the dispute about whether there should be an adjustment of the contributions in favour of the wife is the period after 10 December 2012.

2. At that time, December 2012, the building company was completing a 28 residential building project for Rural Places.  The project had been built in stages and the last 10 were approaching completion.  They were virtually completed.  There was concreting work some gardening and some finishing touches.  The wife says that rectification works needed to be done 12 weeks after handover of the property were done by Rural Places.  Payments for work done prior to December 2012 still had to be made and the wife says that she had contractors contacting her, even coming to her door, demanding payment.  She had to deal with these situations.

3. The parties’ youngest child, [Z], just turned 16, was living with the wife and so the wife was still carrying on her homemaker and child carer role.

4. Contributions must be assessed overall and that is particularly so in this case.  The parties’ common endeavour in contract building and owning property had commenced in July 2005.  The amount of property they had accumulated shows that their endeavours were successful.  At times one may have been more engaged than the other.  For instance, the wife travelled to the United Kingdom for a short time in late 2012.  The wife acknowledges that the husband worked long hours on the construction of the [G] property which, until the wife decided against it, was to be her home.  The relatively short time the wife was engaged on her own after December 2012 when the last project was in its closing stages and the business affairs wound up must be assessed in the overall context of the whole of the relationship.  The daughter was just 16 when the husband left Australia.  The husband’s financial contribution to her care was small.  She was 16 and needed support and supervision appropriate to her age.  The wife had the expenses for the daughter but she had $70,000 in additional drawings offset by the husband’s pension of about $24,000 over two years.  The wife’s activities after the husband left Australia do not alter the equal contribution.

Section 75(2)

1. The wife has employment as a [omitted] earning $1,000 gross a week.  The husband’s income is his pension of £690 per month about $1,000 per month.  He says he cannot do the physical work of a [omitted] because of injury.  There is no medical evidence of his injury but the husband obviously has organisational and administrative skills as a builder.  The reason he gave for moving to the United Kingdom in December 2012 was that his elderly parents need care.  The wife disputes the extent to which the husband is involved with his parents that the husband’s evidence is not such that he alleges he needs to be a full-time carer.  The husband has income earning potential equivalent to the wife.

2. Each party has a residence in which to live.  There are no children under the age of 18.  The husband’s argument acknowledges that there should be some adjustment in favour of the wife because of the pension he receives. 

3. The argument between the parties is what account should be taken of the extra amounts the wife received from the company and matrimonial funds in 2012 and 2013.  Some of this money was spent on legal expenses but the exact amount is not in evidence.  The husband too has spent money on legal expenses.

4. The decisions on adding money back into the property pool show it can be done in only limited circumstances one of which is legal expenses.  A fair approach is to treat money spent on legal expenses as coming from the interim distributions of property which are to be added back.

5. The wife withdrew $96,000 and spent most of it on household appliances and furniture which has now been valued at only $15,000.  The husband, by sale of motor vehicles and motorbikes, used a slightly larger amount, $112,000, to purchase his residence in the United Kingdom.  It has retained its value and so that amount goes into the property pool. 

6. While the wife spent a significant amount on appliances and furniture I do not consider it falls into the category of extravagance or waste. Nonetheless she now has an expensively furnished house with eight televisions, four purchased from the $96,000, something the husband does not have and it needs to be taken into account. The authorities say that this can be done, in the appropriate case, under s.75(2)(o) as a fact or circumstance the justice of the case requires to be taken into account. (Mayne v Mayne [2011] FamCAFC 192,  Shimyu v Tanner [2011] FamCA 271) This is a case where it is appropriate to apply the paragraph.

7. The total property pool is $1,506,183.47.  I have taken the additional $70,000 the wife received as drawings into account under contributions. The $96,000, mostly spent on household appliances and furniture, would have increased the property pool by about 6%.

8. There is evidence that the husband’s pension valued in accordance with Australian family law regulations has a value of $310,000.

9. The additional financial resource the husband has in his pension in the context of the size of the property pool is not balanced by the wife’s better furnished house. The proper adjustment, additional to the adjustment for contributions is 2½% percent in favour of the wife.  The wife receives 52½% of $1,506,183.47, that is, $790,746.32 and the husband 47½% that is $715,437.15.

10. The wife proposes that the husband be paid the two amounts held in trust, the two [P] properties be transferred to her, and that she pay the husband a cash amount by mortgaging one of the two properties.  This is a more convenient result for the parties than transferring a property in Australia to the husband when he is living in the United Kingdom.  This is the just and equitable way of putting the result into effect.

11. Each party has received $177,000 by interim distribution.

12. The distribution of assets is:

Asset	Husband	Wife
Interim distribution	177,000	177,000
[1] Property P	460,000
[2] Property P	370,000
Property R	112,000
Peugeot	6,200
Mercedes	8,500
Jaguar	78,000
BP shares	780
Dragon Oil Shares	7,080
Karaoke machine	1,000
Trust funds	108,623.47
Payment	303,753.68	(303,753.68)
Total	715,437.15	790,746.32

1. The wife must pay the husband 303,753.68 within 60 days and in default the property at [2] Property P must be sold.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Judge Phipps

Date: 2 April 2015