Umber and Travers
[2014] FCCA 114
•30 January 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| UMBER & TRAVERS | [2014] FCCA 114 |
| Catchwords: FAMILY LAW – De facto property settlement – alleged cash contribution of $46,000.00 in suitcase by de facto wife. |
| Legislation: Family Law Act 1975 ss.90SB, 90SF, 90SK, 90SM Property (Relationships) Act 1984 (NSW) |
| Cases cited: Kennon & Kennon [1997] FamCA 27; (1997) FLC 92-757 Stanford v Stanford (2012) 293 ALR 70 Hickey and Hickey (2003) FLC 93-143 Bevan & Bevan [2013] FamCAFC 116 In the marriage of Lee Steere (1985) FLC 91-626 In the marriage of Ferraro (1993) FLC 92-335 In the marriage of Clauson (1995) FLC 92-595 Russell and Russell [1999] FamCA 1875; (1999) FLC 92-877 Jones v Dunkel [1959] 101 CLR 298 Payne v Parker [1976] 1 NSWLR 191 Manly Council v/ Byrne & Anor [2004] NSWCA 123 Pierce and Pierce (1999) FKC 92-844 Kowaliw (1981) FLC 91-092 Esposito & Coster [2012] FamCAFC 118 |
| Applicant: | MS UMBER |
| Respondent: | MR TRAVERS |
| File Number: | NCC 684 of 2011 |
| Judgment of: | Judge Myers |
| Hearing dates: | 14 June 2013 & 8 October 2013 |
| Date of Last Submission: | 8 October 2013 |
| Delivered at: | Newcastle |
| Delivered on: | 30 January 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Brady |
| Solicitors for the Applicant: | Renfrew Solicitors |
| Counsel for the Respondent: | Mr Wilkinson |
| Solicitors for the Respondent: | Winder Lawyer |
ORDERS
That within 42 days the respondent pay to the applicant the sum of $120,253.53 as the applicant authorises and directs.
That otherwise as provided for in these orders each party retain and be declared to own all real property, chattels, motor vehicles, insurance policies, money in bank accounts, superannuation, shares in public or private companies, furniture furnishings and the like that stand in that parties name or that are in that parties possession as at the date of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Umber & Travers is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 684 of 2011
| MS UMBER |
Applicant
And
| MR TRAVERS |
Respondent
REASONS FOR JUDGMENT
Proceedings
These proceedings relate to an application made by Ms Umber (hereinafter referred to as the “applicant”) pursuant to section 90SM of the Family Law Act1975 for adjustment of property against Mr Travers (hereinafter referred to as the “respondent”).
At the hearing the applicant relied on the following documents that the court has read and considered:
a)Initiating Application filed 17 March 2011;
b)Applicant’s Affidavit filed 17 March 2011;
c)Applicant’s Financial Statements filed 17 March 2011;
d)Outline of Case Document incorporating Chronology
e)Minute of Order sought by the Applicant dated 12 December 2012.
The applicant sought the following orders that are summarised or otherwise set out below as contained in the Minute of Order document relied upon at the hearing:
a)That the asset pool of the parties be divided by way of a 40% division to the applicant and 60% division to the respondent.
b)That the respondent place the property situated at and known as Property K (hereinafter referred to as “Property K”) on the market for sale and that pending completion of the sale of such property that the applicant be entitled to live in the property to the exclusion of the respondent and that the applicant be deemed to be the trustee on the sale of the said property.
c)That the applicant be responsible for the cost of preparing Property K for sale and that such costs be reimbursed to the applicant upon completion of the sale of the said property.
d)That upon completion of the sale of Property K an amount of monies from the proceeds of sale be paid to the applicant in such an amount so as to constitute the applicant receiving a 40% share of the net asset pool of the parties.
e)That the applicant retains her interest in the property situated at and known as Property P to the exclusion of the respondent.
f)That each party be responsible for any credit card or Centrelink debts and indemnify the other in respect of any and all liabilities attaching to the assets in that parties possession.
g)That otherwise as provide for each party retain all goods and chattels inclusive of motor vehicles registered in that parties’ name or held by a party in that parties’ control, any money held in any bank account in that parties’ name solely, share portfolio and superannuation entitlement held in that parties’ name solely.
h)An order pursuant to section 106A of the Family Law Act1975.
At the hearing the respondent relied on the following documents that the court has read and considered:
a)Response to Initiating Application filed 29 April 2011
b)Financial Statement filed 29 April 2011
c)Affidavit of the Applicant sworn 28 April 2011 filed 29 April 2011.
d)Case Outline Document.
The respondent sought the following orders that are summarised or otherwise set out below as contained in the Minute of Order document relied upon at the hearing:
a)That the respondent transferred to the applicant of all his right title and interest in the property at Property P subject to the first registered mortgage in favour of the (omitted) Bank.
b)That the applicant refinance the (omitted) Bank mortgage over the property at Property P so as to remove the respondent’s name from the financial facility entirely.
c)That the applicant be declared solely entitled to all items of personalty in her possession including but not limited to any monies standing to her credit in any bank or financial institution, the Toyota (model omitted) motor vehicle in her possession, furniture, furnishings and other personal items, the (omitted) caravan and/or the proceeds of sale of the vehicle.
d)That the respondent be declared solely entitled to all other items of Realty and personalty in his respective possession free from any claim whatsoever from the applicant.
e)That the respondent indemnify and keep indemnified the applicant from and against all debts, claims and liabilities in relation to:
i)The (omitted) Bank mortgage registered over the property at Property K.
ii)The (omitted) Bank Visa debt.
iii)The (omitted) Bank MasterCard debt.
iv)The (omitted) Bank MasterCard debt.
f)Costs.
The court has read and considered those documents that form exhibits “A” – “H” in the proceedings.
Jurisdiction
The Court may only make an order under section 90SM in relation to a de facto relationship where the threshold requirements found at sections 90SK and 90SB of the Family Law Act are met.
Section 90SK(1) provides:
A court may make a declaration under section 90SL, or an order under section 90SM, in relation to a de facto relationship only if the court is satisfied:
(a) that either or both of parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for the declaration or order was made (the application time ); and
(b)that either:
(i)both parties to the de facto relationship were ordinarily resident during at least a third of the de facto relationship; or
(ii)the applicant for the declaration or order made substantial contributions in relation to the de facto relationship, of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
in one or more States or Territories that are participating jurisdictions at the application time;
or that the alternative condition in subsection (1A) is met.
(1A)The alternative condition is that the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.
Section 90SB provides:
A court may make an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a) that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b) that there is a child of the de facto relationship; or
(c) that:
(i) the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii) a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.
The court finds that both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction, being that of New South Wales when the Initiating Application was filed by the applicant; that both parties to the de facto relationship were ordinarily resident in New South Wales during at least a third of the de facto relationship and that the parties were ordinarily resident in New South Wales at the time the relationship broke down. At the commencement of the hearing it was agreed as a common fact between the parties that the parties had lived during their relationship in New South Wales and that the relationship was for at least two years. The court finds that the relationship commenced (despite some argument during the hearing about the actual date) in July 1999 and concluded in October 2010.
While there was argument as to the actual contributions and any adjustments that ought to be made between the parties, the court is easily able to and does find that both parties had made contributions as contemplated by the provisions of section 90SM (4)(a), (b) or (c) of the Act (s.90SB) .
The court finds that the threshold requirements found at sections 90SK and 90SB are satisfied and as such the court has the jurisdiction to make orders for a property settlement pursuant to section 90SM of the Family Law Act1975.
Background & Evidence
At the time of the hearing the applicant was 54 years of age and the respondent 57 years of age. The applicant receives a disability support pension from Centrelink. The respondent receives a disability support pension from Centrelink and also a monthly amount paid to him by an insurance company (omitted) in respect of an income support payment. It was not challenged by the applicant that the payment made to the respondent by (omitted) will conclude in the early part of 2014.
In on or about (omitted) 1998 prior to the parties’ relationship, the respondent and his then de facto partner Ms J purchased a property at Property T (hereinafter referred to as “Property T”) for $97,500.00.
In 1999 the applicant declared bankruptcy and became eligible to receive a disability support pension after suffering a nervous breakdown following what appears on the evidence to have been a violent relationship with a former partner.
The court finds that the parties commenced their relationship in on or about (omitted) 1999. At that time the respondent’s earlier de facto relationship with Ms J had ended, the respondent was then residing in the Property T property and was the owner operator of a (omitted) business known as (business omitted). The applicant was not working at the commencement of the parties’ relationship.
The respondent deposes that the applicant advised him at the commencement of the parties living together in (omitted) 1999 that she was bankrupt. At paragraph 9 of the respondent’s affidavit he deposes that despite what the applicant had told him the applicant had in fact declared herself bankrupt effective from 30 September 1999. The respondent deposes that the applicant was discharged from her bankruptcy on 29 May 2000.
During the course of cross examination the applicant conceded that the respondent had assisted her in obtaining an early discharge from bankruptcy. It is not clear to the court whether any monies were paid to the bankruptcy trustee by either party in order that the applicant be discharged from bankruptcy earlier than she would have otherwise been discharged.
The applicant contends that during the Christmas period in December 1999 her mother provided to her a suitcase containing the sum of $46,000.00 or $47,000.00 in cash. At paragraph 11 of the applicant’s affidavit the applicant deposes that her late brother Mr M had been sick and ultimately passed away, and that prior to his death Mr M had said to the applicant “Ms Umber, you should get a little house somewhere and set yourself up”. The applicant deposes that her brother had a fear of banks and had saved cash at home for a number of years. It is the applicant’s contention that the sum of either $46,000.00 or $47,000.00 were her late brother’s savings, and that when the applicant’s mother provided the suitcase of cash to her, the applicant’s mother said to the applicant “Mr C is alright, get yourself a little place”. The applicant deposes that Mr C is the applicant’s older brother and that Mr C had what the applicant described in her affidavit as “a few properties”.
The applicant deposes at paragraph 11 that she told the respondent about the cash in the suitcase in the new year of 2000 and that the respondent said to her “give me the money and I will put it into my account. I will help you find a house”. To which the applicant deposes she said “I can’t buy a house I have been bankrupted”. The applicant further deposes that she advised the respondent that she had had a car accident; that she owed money to 3 different solicitors for what appears to the court to be monies owed for legal fees for the applicant having pursued a personal injury claim as a result of a motor vehicle accident; and that the applicant had received $22,000.00 for injuries sustained in the motor vehicle accident.
It is apparent to the court having considered the evidence in the matter that the sum of $22,000.00 received by the applicant was not enough to pay what the applicant describes at paragraph 11 of her affidavit as her solicitor’s costs, barrister’s costs and health expenses and that this culminated in the applicant’s bankruptcy.
In response to the applicant’s disclosure, the applicant deposes the respondent said “I will put the money into my account in bits. You can trust me. I will buy a house and down the track I will put it in your name. This is the best way”. The applicant deposes that after such conversation, the applicant gave to the respondent the suitcase full of money and that the respondent then counted some of the money on the dining room table and the applicant counted some of the money on the floor.
In Paragraph 11 of the applicant’s affidavit the applicant deposes that after counting the money and giving it to the respondent she “never saw any of the money again”.
The applicant deposes at paragraph 11 of her affidavit that the respondent acknowledged on 10 February 2000 that the applicant “invested $40,000.00” with the respondent and annexes to her affidavit marking the same with the letter “J” a document that appears to be dated 29 January 2000. The document is titled “RE-HOUSE AT Property P”. The applicant further annexes copies of other documents to her affidavit that the applicant relies upon as evidencing her having paid to, or given to the respondent the sum of $46,000 or $47,000. Those documents are annexed and marked with the letter “K” “L” and “L2” to the applicant’s affidavit.
The respondent denies the conversations with respect to the cash monies as alleged by the applicant and denies the documents were drafted by him, or were signed by him and asked the court to accept that the documents were drafted by the applicant and fraudulently signed on his behalf. The respondent denies the applicant ever gave to him the sum in cash as alleged by the applicant.
During submissions Counsel for the respondent suggested the court should take notice of the signature of the respondent on each document is different. Upon studying the documents it would indeed appear that those signatures purported to be that of the respondent are different. It should be noted that no expert evidence was filed by the respondent by any person such as a forensic document examiner who might have been able to provide evidence that would have assisted the court in coming to a view about the execution of the said documents. It is noted that the documents are not witnessed by what the court would describe as a third party.
The documents that are attached and marked with the letters K - L2 to the applicant’s affidavit include signatures purported to be those of the respondent. Interestingly, and more so unusually, when the court takes judicial notice of the manner in which people might usually sign their name, the purported signature for the respondent as executed unusually includes the honorific title or what is sometimes termed ‘prefix’, being “Mr” as part of the actual signature.
The manner in which the applicant gave evidence during cross-examination with respect to the circumstances where she came into possession of the documents (that are alleged to have been executed by the respondent as evidencing the payment of cash monies by the applicant to the respondent) causes the court to doubt the reliability of the applicant’s evidence. It was the actual manner in which the evidence was given including the applicant looking around, pausing, otherwise being unresponsive or evasive during the answering of questions in cross examination that cause such concern.
During cross-examination and at paragraph 29 of the applicant’s affidavit the applicant suggested that on the day she and the respondent separated that she was given 10 minutes in which to pack her belongings and get out. The applicant provides evidence in her affidavit at paragraph 26 of her affidavit that she was not allowed into the respondent’s study. The applicant suggested that in the ten minutes she had available to pack her belongings and leave that she went into the respondent’s study and found the documents that are attached and marked with the letters K - L2.
On a number of occasions during cross examination the applicant was unresponsive to questions asked of her. On one occasion during cross examination the applicant responded to a question asked by counsel for the respondent stating that as she was “medicated” she “cannot remember everything”.
The court notes that while it was at all times open for the applicant to file and then rely on an affidavit of her mother attesting to the provision of monies in the suitcase to the applicant, and although the applicant had caused an affidavit by her mother to be filed earlier in the proceedings, the applicant did not seek to rely on that affidavit at the hearing.
At paragraph 14 the applicant deposes to being subjected to considerable family violence by the respondent during the parties’ relationship. Despite the inclusion of this evidence, Counsel for the applicant indicated at the commencement of submissions that no submissions would be made to the court on behalf of the applicant that the court would be asked to find that the family violence caused the applicant’s contributions to be made more arduous and further, that the applicant would not rely on principles set out by the Full Court in Kennon & Kennon [1997] FamCA 27; (1997) FLC 92-757.
In or about August 11 2000, Ms J transferred her interest in the property at Property T to the respondent pursuant to orders made in the Bankstown Local Court made under the Property Relationships Act1984. A copy of a transfer executed by Ms J and the solicitor for the respondent, that evidences such transaction and that is dated in August 2000 is annexed and marked with a letter “E” to the applicant’s affidavit.
The applicant deposes at paragraph 8 of her affidavit that the respondent advised her that he paid Ms J the sum of $10,000.00 or $20,000.00 to “pay Ms J out to get her name off the house”. At paragraph 10 of the respondent’s affidavit he deposes that on 11 August 2000 he finalised a property settlement with Ms J whereby she transferred her interest in the Property T property to the respondent. The respondent did not disclose in his affidavit what money he paid Ms J if any, nor does he annex to his affidavit a copy of any orders or terms of settlement that were entered into between the respondent and Ms J pursuant to the Property (Relationships) Act 1984 (NSW).
The respondent deposes that whilst the parties were living in the Property T property he purchased a property at Property P in his sole name. At paragraph 11 of the respondent’s affidavit, he deposes that the home at Property P was purchased for the sum of $49,000.00. The respondent deposes that he contributed the sum of $6073.53 and borrowed the sum of $3962.36 from the (omitted) Bank drawing the same from a line of credit he had with the (omitted) Bank secured over the Property T property. Well beyond being clear, the respondent failed in whole in his affidavit to disclose where the balance of the money needed to fund the balance of the purchase price of Property P and pay ad valorem stamp duty on such purchase were sourced.
At paragraph 18 of the applicant’s affidavit, she deposes that the property at Property P was purchased for the sum of $49,000.00 in May 2000 and that the respondent had sourced some monies in the sum of $4704.36 from a (omitted) Bank line of credit. The applicant deposes that the property was purchased in the respondent’s name for the purposes of him being able to claim what the applicant describes at paragraph 19 as GST.
At paragraph 24 of the applicant’s affidavit she deposes that the sum of $47,000.00 being what she describes as “My contribution of cash from Mr M’s suitcase” were used in order to fund the purchase price of the property at Property P.
At paragraph 26 of the applicant’s affidavit, she deposes that although the sum of $4704.00 was drawn against the loan with (omitted) Bank to settle the Property P purchase, the facility was often drawn out to the limit of $20,000.00. The applicant deposes that the sum of $12,500.00 was drawn out of the account to pay for what the applicant describes as a “caravan” by the respondent. The bank account statement for the said account support the applicant’s claim.
The respondent deposes at paragraph 13 of his affidavit that on or about 28 November 2002 the respondent purchased a property at Property K in the sum of $194,000.00. The respondent deposes to having annexed to his affidavit document marked with the letter “A” being a settlement statement for the purchase of the Property K property. However the document that is annexed and marked with the letter “A” is not a settlement statement for the purchase of the said property but rather the front page of a Contract the Sale of Land - 2000 edition for the purchase of the property at Property K. Affixed to the front page of the contract is a seal of the Office of State Revenue, the document shows the purchase price for the property in the sum of $194,000.00.
The applicant deposes at paragraph 30 of her affidavit that the respondent purchased the property at Property K for the sum of $197,000.00 and that such purchase settled on or about 30 November 2002. The court accepts that the purchase was settled somewhere between 28 November and 30 November 2002 and finds that the purchase price was $194,000.00.
At paragraph 13 of the respondent’s affidavit he deposes that he funded the purchase of the property at Property K with funds borrowed from (omitted) Bank.
The respondent deposes at paragraph 14 of his affidavit that the Property T property was sold on or about 24 January 2003 for the sale price of $273,000.00. Attached marked with the letter “B” to the respondent’s affidavit is a copy of the settlement statement for the sale of the Property T property. From the sale proceeds the following adjustments and disbursements were made being:
a)Amount paid to counsel for outstanding water rates $ 348.00
b)Amount paid to water authority rest any rates $ 90.75
c)Costs and disbursements for acting on the sale $ 630.00
d)Amount to discharge registered mortgage $210,000.00
The respondent further deposes that he received the net amount of $34,877.00 being the balance of the purchase price following disbursements paid out together with an amount of $18,000.00 being the balance of monies left over from the deposit paid to the real estate agent after the payment of agents commission on the sale.
The respondent deposes at paragraph 14 of his affidavit that he received from the combined proceeds of sale the amount of $52,000.00 or $53,000.00.
The respondent deposes that the payment of $210,000.00 caused a partial reduction in the monies owed to (omitted) Bank for the Property K property and as at January 2003 the sum of $53,000.00 was then owing on the said property.
At paragraph 32 of the applicant’s affidavit she concedes that the mortgage paid out on settlement of the sale of the Property T property was some $210,000.00 and that it was “possible that some of the borrowings to fund the acquisition of the Property K property had been secured against Property T”.
The applicant deposes that towards the end of the relationship the respondent was some 177kg, refused to shower, could not wipe himself after going to the toilet, could not attend in his personal hygiene and the respondent’s body was covered in what the applicant describes at paragraph 42 of the affidavit as “rashes and pussy boils” and that the applicant “would have to lift all the folds of fat” on the respondent’s stomach so that the applicant could “rub creams and ointments into the skin over the puss boils”.
The applicant further deposes that the applicant would each day wash the respondent’s “underpants, trackpants and shorts which were soiled with faeces”.
At paragraph 12 of the respondent’s affidavit, he deposes that he weighed “considerably less than 155kg” and that at the time of swearing his affidavit weighed less than 120kg. It was put to the applicant during cross-examination that the applicant had not undertaken the tasks referred to by the applicant at paragraph 42 of her affidavit. There is insufficient evidence before the court to make any finding as to whether the applicant undertook the tasks referred to in paragraph 42 affidavit. The court however notes that at paragraph 12 of the respondent’s affidavit he sets out that he had undergone various surgeries. The court accepts the applicant would need to have provided the respondent with care during the period in which he was convalescing following the surgical procedures.
The applicant deposes the day prior to separation the respondent said to her words to the effect:
“You are getting slack. I like sex. You have to pull up your socks. You have to do more in the yard. I am giving you notice. Shape up or ship out. You are worthless. You are fat and ugly. You have a big arse. You are a worthless piece of shit. You are nothing but a boiler. I can do ten times better than you. You are white trash. I am going to get rid of you. When I get rid of you I get rid of all my problems”.
The applicant further deposes at the date of separation the respondent said to her:
“Get out of here in 10 minutes. You have 10 minutes to get your stuff. I don’t want to see your ugly face and your big fat arse again. Get your repulsive face through those gates. Ring me in a week get a truck and I will let you get your personal things out of the house”.
The respondent presented during cross-examination as a cantankerous, argumentative witness who openly challenged counsel for the applicant, failed on numerous occasions to answer questions. The respondent during cross examination appeared to tell the court what the respondent thought the court should hear, openly refused to answer questions, challenged the court on more than one occasion to hold him in contempt and lock him up. During the course of the hearing particularly during cross examination of the respondent, the court observed the respondent to continually stare at the applicant in a menacing way, become aggressive and speak about the applicant in a derogatory tone and manner.
Whilst the respondent denied perpetrated anything upon the applicant that might be classed as significant family violence, the court accepts the applicant would have been subject to at the very least, unpleasant behaviour and the court accepts the version of events with respect to the things the applicant purports were said to her by the respondent on the day prior to and on the date of separation.
Following separation, interim property orders were made by Justice Foster, as he then was, a Federal Magistrate on 12 October 2011, by consent that required the respondent to transfer to the applicant his interest in the property at Property P and the Applicant take over the liability for the flexi plus mortgage that was then secured against the Property P property.
The Law
On 1 March 2009 the provisions of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act2008 commenced. Since 1 March 2009 de facto relationships are now within the jurisdiction of the Family Law Act1975 except those in Western Australia.
Where parties have lived in a de facto relationship, Part VIII(a)(b) of the Family Law Act1975 provides for alteration of property interests between parties.
The legislative pathway and the manner in which the court considers adjusting property between de facto parties remains similar to that adopted by the court when determining an application for property settlement by parties to a marriage pursuant to Part VIII of the Act.
Section 90SM of the Family Law Act defines the Court’s powers in determining applications for property settlement between de facto couples. Sub-section 90SM(3) of the Act provides that the court must not make an order under the section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 90SM(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of parties’ interest in property. Those matters are:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
Section 90SF(3) of the Act sets out the relevant further considerations which are as follows:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(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; and
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIII(a)(b) financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship
In the case of Stanford v Stanford (2012) 293 ALR 70 the High Court (at 78-79) considered the manner in which the court should embark when determining property proceedings and held that:
“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 equity principles, the existing legal and equitable interests of the parties in the property”.
The court has historically determined property proceedings in accordance with the well-established principles set out in Hickey and Hickey (2003) FLC 93-143 embarking upon a four step process. The first step requires the court to identify and value the assets, liabilities and financial resources of the parties at the time of the hearing. The second step requires the court to consider the parties contributions and consider any adjust that should be made between the parties. The third step requires the court to consider the actual circumstances of the parties and make adjust for those circumstances considering a variety of factors set out at section 90SF(3) of the Family Law Act 1975. Lastly step four requires the court to satisfy itself that the actual effects of the orders are just and equitable.
In the recent Full Court of the Family Court decision in Bevan & Bevan [2013] FamCAFC 116 the Full Court considered the decision in Stanford and the implication of that decision when looking at the four step approach taken by the courts. Bryant CJ and Thackray J held at paragraph 59:
“Prior to Stanford, property applications were commonly dealt with by reference to what the trial Judge called “a four stage process”.
This process was described at [31] and [32] of his Honour’s reasons. The jurisprudential basis for the process was well established – see the line of cases cited in Hickey & Hickey (2003) FLC 93-143 at [39].
The four stage (or step) process involves:
·identification and valuation of the property of the parties;
·identification and evaluation of contributions to the property (including property no longer owned by the parties);
·identification and assessment of the various matters in s 79(4)(d) to (g) including, to the extent they are relevant, the matters in s 75(2);
·consideration of matters of justice and equity.
61. Although the four step process has been regularly applied, the Full Court has stressed it is no more than a means to an end, since the statutory obligation is to alter existing interests only if it is just and equitable to do so. Thus, in Norman [2013] FamCAFC 116 Reasons Page 18 & Norman [2010] FamCAFC 66 at [60], the Full Court (Finn, May and Murphy JJ) said:
It is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result. For all its usefulness and merit as a “disciplined approach” or a “structured process of reasoning” (per Fogarty, Lindenmayer, McCall JJ, N and N, unreported, 10 June 1992), the “three-step” or “four-step” approach merely illuminates the path to the ultimate result.
62. To like effect, in discussing the four step approach in our joint judgment in Martin & Newton (2011) FLC 93-490, we said (original emphasis):
305. … that approach is not legislatively mandated, and as the Full Court [in Hickey] said, is simply the preferred approach. This is because it will be sufficient, in most cases, to have regard to the overall justice and equity of the orders after determination of the asset pool, consideration of contributions and assessment of the relevant s 75(2) matters.
306. But in our view, there is no requirement that the justice and equity of the order, as prescribed by s 79(2), must only be considered at the fourth (and last) stage. In our view, the requirement to make an order that is just and equitable permeates the entire decision making process, and it is not impermissible to consider it at an earlier point if the particular case requires it. We consider this is such a case.”
The four step approach while not legislatively mandated continues to be adopted by the courts when determining an application under section 90SM of the Family Law Act1975 for adjustment of property interests as it is a means by which the court is able to illuminate a pathway towards a result that is just and equitable. This approach is well established by authority (In the marriage of Lee Steere (1985) FLC 91-626, In the marriage of Ferraro (1993) FLC 92-335, In the marriage of Clauson (1995) FLC 92-595).
When determining property proceedings (utilising a four step approach), the court will utilise the evidence of experts such as valuers, agreements reached between the parties, or make findings based upon the evidence presented in order to identify and value the property, liabilities and financial resources of the parties. The court then considers the contributions made by the parties as defined in section 90SM(4)(a) to (c). Thirdly the court must consider the future needs of the parties by having regard to the provisions of section 90SF(3) in so far as they are relevant. Finally in determining what order the court should make the court must be satisfied in all of the circumstances that it is just and equitable to make the order as required by section 90SM(3). It is the justice and equity of the actual orders that the court must consider. See Russell and Russell [1999] FamCA 1875; (1999) FLC 92-877).
This is a case where the assets of the parties are not divided evenly between them. Counsel for the respondent made it clear that even on the respondent’s case an adjustment would need to be made between the applicant and the respondent. The court takes the view that in this case the court ought to make an initial finding as to whether it is just and equitable to make an order. Accordingly when identifying, according to ordinary common law and principles of equity, the existing legal and equitable interests of the parties’ in the property, the court finds that the contributions the parties made over a long period of time are not reflected in the way in which the parties hold their assets. In this case the respondent holds assets of substantially greater value than those held in the name of the applicant and it is therefore the view of the court that it is just and equitable to make a property settlement order in the proceedings.
The property of the parties
At the conclusion of the hearing, Counsel for both the applicant and Counsel for the respondent handed up a list of agreed assets and liabilities that form exhibit “H” in the proceedings and are set out in the table below:
| Asset | Ownership | Value |
| Property K | Respondent | $440,000.00 |
| Property P | Applicant | $125,000.00 |
| Toyota (model omitted) | Applicant | $ 10,000.00 |
| Toyota (model omitted) | Respondent | $ 16,000.00 |
| Home Contents | Applicant | $ 4,165.00 |
| Home Contents | Respondent | $ 19,690.00 |
| (omitted) Shares | Respondent | $ 7,522.00 |
| (omitted) Shares | Applicant | $ 2,926.00 |
| (omitted) Shares | Respondent | $ 4,390.00 |
| TOTAL | $629,693.00 |
| Liabilities | Ownership | Value |
| Mortgage Property P | Wife | $ 30,000.00 |
| Mortgage Property K | Husband | $ 53,000.00 |
| TOTAL | $ 83,000.00 | |
| NET VALUE | $546,693.00 |
Counsel for the parties jointly agreed that no argument about add backs was made by either party.
The court finds that the assets and liabilities of the parties available for division are as set out in the table above.
Contributions
The Court now embarks on the second step, namely an assessment of the parties contributions within the context of s.90SM(4)(a) to (g). These provision provide:
The Court must take into account when considering what orders should be made for the alteration of parties’ interest in property. Those matters are:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
Central to the applicant’s case is that she had contributed either $46,000.00 or $47,000.00 to the respondent in cash.
The court has noted the various issues in the applicant’s case as to whether the monies were paid including the documents that are alleged by the applicant to evidence payment, the way in which the applicant is purported to have come into possession of the documents that are relied upon by the applicant to support her claim, and the failure by the applicant to adduce any evidence from her mother with respect to the alleged payment of money in a suitcase by the applicant’s mother to the applicant.
Where a party to proceedings fails to call a material witness the court may draw an adverse inference because of such a failure. See the decisions in Jones v. Dunkel [1959] 101 CLR 298 and the subsequent decisions of the New South Wales Court of Appeal (“NSWCA”) in Payne v. Parker[1976] 1 NSWLR 191 and Manly Council v. Byrne & Anor [2004] NSWCA 123. The applicant did fail in the view of the court to call the applicant’s mother and the court accordingly draws an adverse inference from this failure. However despite drawing of an adverse inference, the concerns the court holds about the reliability of the applicant’s evidence with respect to the documents forming annexures K – L2 of the applicant’s affidavit the court finds that the applicant contributed the sum of $46,000.00 to $47,00.00 in cash as there is no other plausible explanation in the view of the court as to where the funds were sourced in order to fund the purchase of the property at Property P, particularly in light of the document that is annexed to the applicant’s affidavit and marked “H” being a settlement statement from T.A.Murphy Solicitors dated 17 May 2000 that confirms that the respondent contributed the sum of $40,300.53 above the monies received from the bank.
In the absence of any evidence before the court as to the circumstances in which the applicant obtained an early discharge from bankruptcy, the court is not in a position to make any findings about whether the applicant did or did not disclose to her bankruptcy trustee the facts that she had been gifted the sum of $46,000.00 or $47,000.00 at a time when she was bankrupt.
The court accepts that the applicant had little by way of assets at the commencement of the relationship other than a motor vehicle being that of a Toyota (model omitted) referred to by the respondent at paragraph 8 of his affidavit. Neither the applicant nor respondent ascribe a value to the (omitted). The court takes judicial notice that a (omitted) was a 4 door rear wheel drive motor vehicle imported into Australia by Toyota and that the sale of (omitted)’s in Australia ended in around 1993. Should the (omitted) have been the very last (omitted) model imported into Australia then it would have been approximately 6 years old as at the commencement of the parties’ relationship. Given the above and in the absence of any evidence as to what the (omitted) would have been worth the court attributes no value to the (omitted) and no weight to the applicant’s contribution in respect of the said motor vehicle.
The respondent owned a half interest in the property at Property T at the commencement of the parties relationship having purchased the said property only some 14 months earlier with the respondent’s earlier partner Ms J.
At paragraph 10 of the respondent’s affidavit, he deposes that the Property T property was purchased for $97,500.00. No details are given by the respondent as to what debt was encumbered upon the property if any and the source of funds used for the purchase. By contrast the applicant provides at paragraphs 3-7 of her affidavit significant information gleaned from historical Land and Property Information searches that are annexed to the applicant’s affidavit and that reveal:
a)The house at Property T was purchased from the Housing Commission of New South Wales for $97,500.00 on 8 April 1998.
b)That a mortgage was granted by the Respondent and Ms J to the (omitted) Bank securing a loan in the sum of $87,750.00.
c)Ms J’s interest in the property at Property T was transferred to the respondent on 11 August 2000 and no stamp duty was payable on the transfer as the transfer had been made pursuant to “Orders made under the Property Relationships Act1984 in the Local Court at Bankstown File No. FL025/000085.
d)The respondent took over the obligations to (omitted) Bank as evidence by way of Variation of Mortgage registered on the Property T property dated 11 August 2000.
The respondent at paragraph 10 of his affidavit provides evidence of having finalised a property settlement with Ms J and that he received from her, her interest in the property. As set out in this judgement above, the court notes that the respondent without explanation failed to attach a copy of any orders or agreement between Ms J or provide any further information about the terms of any settlement reached.
The applicant provides evidence at paragraph 8 of her affidavit that the respondent told her that he had paid Ms J either $10,000.00 or $20,000.00 but that the applicant could not remember which of the sums was the sum conveyed by the respondent to her. Noting the applicant’s evidence given during cross examination about her memory, the court does not propose to make a finding about the actual amount that might have been paid.
The court is able to find that there was some equity in the property at Property T. The Respondent and the applicant agree that the respondent owned a business that was a self-operated (omitted) business at the commencement of the parties’ relationship known as (omitted). No value is ascribed to the business by either party.
The applicant deposes that the business operated a (omitted) and that the respondent advised her that the respondent’s mother “had guaranteed a loan” and that “5 or 6 years ago” the respondent sent the (omitted) to an auctioneer being that of either “(omitted) or (omitted)” and that the respondent received “either $11,000.00 or $13,000.00” for the (omitted).
At paragraph 7 of the respondent’s affidavit, the respondent further deposes to owning “a house full of furniture, a boat, motor and trailer, a box trailer, a motor vehicle and other belongings”. Again no value is sort to be ascribed to those items.
The court does not attribute much weight to either of the parties’ initial contributions to the extent that one is to be elevated above the other. The Full Court of the Family Court in Pierce and Pierce (1999) FLC 92-844 at paragraph 28 said as follows:
“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, regard must be had to the use made by the parties of that contribution.”
The court accepts that throughout the course of the parties’ relationship, the respondent made a greater direct financial contribution by way of the monies earned whilst operating the business and then via the receipt of monies from the income protection policy payments made by (omitted).
At paragraph 25 of the applicant’s affidavit, she raises the issue of the respondent’s failure to agree to the property at Property P being rented out. If the applicant by implication suggests in part that there was some loss occasioned to the parties caused by the respondent’s failure then such suggestion is not accepted by the court.
In the decision of Kowaliw (1981) FLC 91-092, the Full Court of the Family Court held that financial losses incurred by the parties or either of them in the course of their marriage should be shared by them (although not necessarily equally) unless one of the parties has embarked upon a course of conduct designed to reduce the value of the assets or where one of the parties has acted recklessly, negligently or wantonly with the assets causing a reduction or minimisation of their value. This is often referred to as ‘waste’.
No finding is made by the court that either party embarked upon a course of conduct designed to reduce the value of the assets or had acted recklessly, negligently or wantonly with the assets causing a reduction or minimisation of their value.
It is not really clear whether the parties undertook any work of great worth to any of the properties and there is insufficient evidence of any great weight that would give rise to the court making an adjustment for non-financial contribution made by the parties to the acquisition, conservation or improvement of the parties’ property.
The court notes that there are no children of the marriage, and finds that there is insufficient evidence that would allow the court to make an adjustment for contributions made by a parties to the welfare of the family in their capacity as homemaker.
The court finds that the proposed orders of the parties will not affect either parties’ earning capacity.
Weighing up the various contributions of the parties, the court finds that an adjustment ought be made in the respondent’s favour of 7.5%.
Section 90SF(3) factors
Having determined the contribution elements the court is required to have regard to the provisions of section 90SF(3).
The matters to be so taken into account are:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(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; and
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIII(a)(b) financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship
It is apparent having considered the evidence that at the date of the hearing the applicant was 54 years and the respondent 57 years and that the parties are in equally poor health.
The court has considered 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 at the date of the hearing the parties were both in receipt of a Disability Support Pension paid by Centrelink. The monies the parties receive from Centrelink is not disproportionately greater or smaller than the other.
The respondent receives a monthly payment of some $2,000.00 from (omitted) as an income insurance policy payment. The respondent’s unchallenged evidence is that such payment was for a term of 5 years only and will terminate in the month of March of 2014.
The court is satisfied that the parties have limited physical and in the applicant’s case, mental capacity for appropriate gainful employment.
The parties do not have a child nor is there evidence before the court that they have commitments necessary to enable the parties to support either party or a child or other person.
There is evidence before the court with respect to both parties being eligible for a pension.
The court is satisfied that the parties each will afford a standard of living that in all the circumstances is reasonable.
The court finds that the proposed orders of the parties will have a nil effect on external creditors. Further there is no evidence before the court with respect to the parties’ cohabitating with any other person.
The court notes that the parties had not entered into a binding financial agreement.
The court finds that the duration of the de facto relationship has not in any way affected the earning capacity of either party.
The court notes that neither party are seeking to continue that party's role as a parent of any child.
The court finds that there was not sufficient evidence as to either party cohabiting with another person nor evidence as to any financial circumstances relating to either party cohabiting.
There is no evidence before the court that evidences that there is a Part VIII(a)(b) financial agreement that is binding on either or both of the parties, nor is there any other form of financial agreement that is binding on either party.
There are no further facts or circumstances in the opinion of the court the justice of the case requires to be taken into account.
Having regard to the above considerations the court finds that there should be no adjustment made between the parties with respect to section 90SF(3).
Section 90SM(3) – Just and Equitable consideration
The fourth stage of the process is to step back and assess whether in all of the circumstances it is just and equitable to make the orders as proposed.
In the case of Russell and then similarly in Esposito & Coster [2012] FamCAFC 118 the full court comprising Coleman, Thackray & Ainslie-Wallace JJ at paragraph 66 looked at the scope of section 79(2) and stated:
“The section does however oblige the court to “stand back” from its preliminary determination, and consider its impact. So doing may inform the terms of the orders appropriate to produce a just and equitable outcome in those terms. It may result in a re-consideration of s 79(4) and or s 75(2) factors, and a different outcome. Whatever the scope of s 79(2), the court’s determination with respect to it cannot be dependent upon findings or conclusions which are irreconcilable with those recorded in the context of a consideration of s 79(4) or s 75(2)”.
The court does not make any further adjustment bases upon whether the final orders are just and equitable.
Conclusion
Having regards to the assets and liabilities of the parties, having considered each party’s contributions pursuant to section S.90SM(4), what adjustment should be made when considering those factors at section 90SF(3) and making adjustments to the orders after considering whether the effect of the orders are fair and equitable in accordance with s.90SM(3)(2) the court makes the orders set out in the beginning of this judgment.
I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of Judge Myers
Date: 30 January 2014
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