Vaden and Vaden
[2008] FMCAfam 693
•14 July 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| VADEN & VADEN | [2008] FMCAfam 693 |
| FAMILY LAW – Property – marriage of fourteen years duration – assessment of contributions – whether rent associated with former matrimonial home in the United Kingdom should be “added back” into pool of property – negative contributions – assessment of s.75(2) factors – just and equitable. |
| Family Law Act 1975, ss.75(2), 79 |
| Vaden & Vaden [2007] FMCAfam 744 Kennon & Kennon (1997) FLC 92‑757 Kessey & Kessey (1994) FLC92-495 |
| Applicant: | MR VADEN |
| Respondent: | MS VADEN |
| File Number: | ADC 183 of 2007 |
| Judgment of: | Brown FM |
| Hearing dates: | 30 June & 1 July 2008 |
| Date of Last Submission: | 1 July 2008 |
| Delivered at: | Adelaide |
| Delivered on: | 14 July 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Berman |
| Solicitors for the Applicant: | Norman Waterhouse |
| Counsel for the Respondent: | In Person |
ORDERS
In full and final settlement of all claims for settlement of matrimonial property:
Within sixty (60) days of todays date the wife pay to the husband the sum of $197,277.60.
Contemporaneously with the payment referred to in order 1 hereof the husband transfer to the wife the whole of his right, title and interest in respect of the property situated at and known as Property E in the United Kingdom (hereinafter referred to as “the former matrimonial home”).
The wife indemnify and keep the husband forever indemnified in respect of all liabilities and outgoings in respect of the former matrimonial home.
In the event the wife is unable to comply with order 1 hereof, the wife execute all necessary documents and do all necessary things to place the former matrimonial home on the market for a price of not less than £240,000.00 or such other sum as the parties mutually agree with the proceeds of sale to be paid as follows:
(a)Firstly to pay the costs commissions and expenses in relation to the said sale;
(b)Secondly to distribute the balance of the proceeds of the sale so that the wife receives sixty percent of the parties’ net assets and the husband receives forty percent of the parties’ net assets taking into account the items of property to be retained by each of them as set out in these reasons for judgment.
The wife transfer to the husband all rights that she has pursuant to the Land Registration Act (UK) or any other legislation that entitles her to apply to have the charge/restriction registered against the former matrimonial home by Mrs P removed.
Pursuant to section 106A the Registrar of the court at Adelaide is appointed to execute all necessary documents including a Deed of Trust in favour of the husband in order to give effect to any necessary sale of the former matrimonial home.
The wife transfer her interest in the Friends Provident policy number [2] to the husband.
Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent order:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
(b)Each party hereby foregoes any claim they may have for any superannuation benefits belonging to or earned by the other;
(c)All insurance policies become the sole property of the owner named thereunder;
(d)Each party be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
The parties have leave to re-list the matter on seven (7) days written notice if any reason arises regarding the enforcement of these orders.
All applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Vaden & Vaden is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 183 of 2007
| MR VADEN |
Applicant
And
| MS VADEN |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to the division of matrimonial property.
The applicant in the proceedings is Mr Vaden – the husband.
The respondent is Ms Vaden – the wife.
There is some dispute between the parties as to when they began to live together as partners and so join their matrimonial resources.
The husband says it was in early 1988. The wife that it was in early 1992. There can be, however, no dispute that they married in H, in the United Kingdom, in 1994.
The marriage produced two children, [F] born in 1994 and [G] born in 1995. Both children were born in the United Kingdom. The family emigrated to Australia in February of 2005.
In May of 2006, the parties separated. Whether this was in Australia or during a holiday to the United Kingdom, which commenced on 17 May 2006 is immaterial now. The wife and children returned to Australia in early June. The husband returned in early August.
Accordingly, the parties have lived separately and apart since at least June of 2006. Since that time, [F] and [G] have lived predominantly with the wife. Ostensibly at least, it is the wife’s position that she wishes to return to live in the United Kingdom with the two children concerned.
On 29 January 2008, as a result of an agreement reached between the parties, a consent order was made in this court, which provided for the children to live with the wife and spend time with the husband on alternate weekends, during term time and for half of each school holiday. The parties were to have equal shared parental responsibility for the children.
More importantly, in the context of these proceedings, the orders provided that the wife could relocate the children to the United Kingdom, provided she gave the husband two month’s notice and informed him of all relevant details relating to the relocation.
The orders provided arrangements for the husband to spend time with the children, in the eventuality they returned to live in the United Kingdom.At an earlier stage, I declined to deal with the husband’s application for property settlement, pending the outcome of the relocation issue.[1]
On the resolution of this issue, on 29 January 2008, I fixed the parties’ competing property applications for hearing on 30 June and 1 July 2008.
[1] See Vaden & Vaden [2007] FMCAfam 744
In the meantime, the wife and children have not returned to live in the United Kingdom. More importantly, neither the wife nor her mother, Mrs P has commenced proceedings in the United Kingdom regarding any item of matrimonial property. Both parties remain in Australia and the jurisdiction of this court has been invoked regarding the appropriate division of the parties’ property.
The most significant item of matrimonial property, concerned in this case, is the parties’ former family home situated at Property E, in the United Kingdom. It is common ground that this property is registered in the wife’s sole name and is not subject to any mortgage. It is also agreed that the property is worth £240,000.00.[2]
[2] See affidavit of the husband’s solicitor, Lesley Hastwell filed 27 June 2008 to which is attached a valuation of residential property report of Keith Fox. The wife accepts this valuation is correct.
Mrs P is relevant to these proceedings because she has placed what is known as a restriction on the title of the Property E property. This prevents any registration of any subsequent disposition on that title, without her consent. This seems to be equivalent to a caveat on title.
Pursuant to this document, Mrs P purportedly claims to have an equitable interest in the Property E property, as a result of moneys advanced by her, to the wife, in respect of the property’s acquisition, the payment of a mortgage related to it and the cost of improving and refurbishing it.[3] It is common ground between the parties that Mrs P has not commenced proceedings in England to quantify the extent of this interest and nor has the wife sought to have this interest removed from the title, so she (the wife) may deal with the property in any way she sees fit.
[3] See exhibit K to the affidavit of the husband filed on 13 May 2008
It is the husband’s position that Mrs P’s claim is a sham, designed to frustrate him from realising his proper interest in the property, acquired as a result of his direct and indirect contributions made during the period of the marriage between the parties. Given this situation, he asserts that neither the wife nor Mrs P has any intention of doing anything about the restriction on title because they are acting in collusion with one another, hoping the restriction will act as an obstruction to this court making orders dealing with a property in another jurisdiction, which is potentially subject to suit in that jurisdiction.
At the outset of the hearing before me, on 30 June 2008, Ms Vaden sought to adjourn the proceedings. She had not filed any material in direct anticipation of the hearing. She was acting on her own behalf.
I declined to adjourn the proceedings, particularly because the wife had not returned to the United Kingdom and neither she nor Mrs P had commenced any proceedings in that country regarding the restriction on title or any other matrimonial proceedings.
I was concerned that the wife had failed to engage properly with these proceedings and considered there was some merit in the position of the husband that the wife was attempting passively to resist the Australian proceedings, whilst at the same time was unwilling to do anything in the United Kingdom.
The wife has had around five months, if not longer, to deal with these proceedings. She has done little, if anything, to advance her case in either this country or the United Kingdom. In my view, the husband is entitled to have his case dealt with, regardless of the wife’s attitude towards it and the fact that the major asset in dispute between the parties is not located in Australia.
The husband doubts the wife’s assertion that her return to the United Kingdom is imminent. He is suspicious that the wife is desirous of creating a stalemate, in regards to the resolution of his claim for a settlement of property.
In all these circumstances, I determined that it was appropriate that the matter should proceed. I was not confident that there would be any change in the position, if I acceded to the wife’s application for an adjournment, other than more delay.
Certainly, I thought it doubtful that any proceedings were likely to be brought by either one of the parties or indeed Mrs P in England in the foreseeable future and an adjournment would achieve nothing but a perpetuation of the stalemate between the parties.
The legal principles to be applied and the issues in the case
The process to be followed for the division of the parties’ property is well established by law.[4] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[4] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities
as at the date of trial.[5] As a result of the valuation of Mr Fox, the
parties agree that the most significant item of matrimonial property is
Property E. It is agreed that this property is worth £240,000.00.
[5] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
The parties have also agreed upon the value of the contents of their former rented home in Australia and the value of a car being used by the wife. It is agreed that these items are worth $13,006.00 in total.
Regardless of this level of agreement, there exist a number of significant issues between the parties regarding what should and should not be included in their pool of assets and how those assets should be dealt with. These issues can be summarised as follows:
·After the parties separated, the wife was desirous of tenanting the Property E property, at a monthly rental of £900.00. No formal tenancy was concluded. The wife asserts as a result of the interference of the husband. Mr Vaden asserts otherwise.
·In January 2007, a person by the name of [Y], who is the sister of the wife’s sister-in-law began to live in the Property E property. It is the wife’s position that this person is minding the property until her return to the United Kingdom, when she will resume occupation of the property.
·In those circumstances, Ms Vaden does not see fit to claim any rent from [Y] and only requires her to pay the necessary outgoings in respect of the property.
·Essentially, it seems to be the wife’s position that, as Property E is registered in her sole name, it is hers to do with as she likes with.
·She asserts that, following the parties’ separation, the husband frustrated her attempts to lease the property and his actions have resulted in him being “hoist on his own petard”.
·The husband does not agree. He is aggrieved that the wife has failed to rent the property, at a proper market value and has resisted his attempts to have the property let.
·In such circumstances, he contends that there should be an “add back” of the likely rent of the property for a period of eighteen months. This equates to a sum of £16,200.00.
·The husband is also suspicious regarding the relationship between [Y] and the wife, asserting it is incredible that she would let the property without proper consideration.
·The husband asserts that it is open to the court to infer that there is a lease between [Y] and the wife, which the wife has concealed from him. As such the wife should not be entitled to complain about a “broad brush” being taken to the issue, given her lack of proper disclosure.[6]
·At around about the time of the parties’ separation, the wife had a sum of around £4,000.00, standing in her name in a bank account with Abbey National, in England.
·It is her position that this sum largely consists of moneys gifted to her by her parents to enable her to resettle herself, in Australia, after the parties’ separation.
·The husband does not agree. It is his position that this sum represents jointly accumulated matrimonial savings and should be available to be divided between the parties.
·The husband has provided details of his Australian superannuation entitlements. They amount to $14,732.00.
·The wife has not provided updated details of her Australian superannuation. As at 14 February 2007, she disclosed superannuation to the value of $2,589.24.
·It is the husband’s position that it is likely the parties now have superannuation entitlements in broadly similar amounts.
[6] See Weir & Weir (1993) FLC 92-338 at 75,593
Secondly, I must ascertain the contributions which each party has made towards those assets. Contributions fall into two broad categories. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.” It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
In assessing the parties’ contributions to the acquisition of the assets of their marriage, it is necessary to consider whether the court should adopt a global approach or an asset by asset approach. In the former, the court assesses the parties’ contributions to their assets in a total or comprehensive manner. In the latter, the court assesses the parties’ contributions to individual items of property.
The global approach is the method generally adopted because it is usually the more convenient, particularly when the court is assessing different types of contributions – home making and financial – towards the acquisition of the various assets concerned.[7]
[7] See Norbis v Norbis (1986) FLC 91-712 at 75,268
The husband asserts that the court should adopt a global approach to the division of the parties’ property. It seems to be the wife’s position that the parties respective contributions made towards their most significant asset, Property E, should be assessed individually.
The second step occasions controversy between the parties in the following major areas.
·The wife asserts that her direct financial contributions, during the marriage, in the form of wages received by her, have been markedly superior to those of the husband.
·The wife is a registered [healthcare professional]. She qualified in 1991 and has been largely in the paid workforce ever since.
·The husband is also a [healthcare professional]. He qualified in 1998. There is a considerable dispute between the parties as to what was the extent of his employment prior to this time and the level of his remuneration, both before he commenced his training and during it.
·It is the wife’s position that she was the main breadwinner and her income was essential to pay the parties’ necessary mortgage payments and provide the family’s financial support in the period concerned.
·She asserts that, at best, the husband was a modest income earner and at worst he was unemployed for significant periods and in receipt of only a modest bursary, whilst training to be a [healthcare professional], which occupied three or four years.
·The husband does not agree. It is his position that he worked to the full extent of his capacity during the marriage and contributed his income to joint family purposes.
·In addition, he points to the fact that it was a jointly made decision of the parties that he would apply himself to his studies, in order to become a [healthcare professional] so that, in the longer term, the parties and their family would benefit financially.
·
The parties acquired a flat in Property H[8] in August 1995.
[8] The address of the property was Property H.
The purchase price was entirely borrowed and was somewhere between £35,000.00 and £39,000.00. The property was sold in May 2000 for £162,000.00, yielding the parties a significant profit.
·It is the wife’s position that, from the date of purchase of the Property H property, her recurrent income serviced the necessary mortgage and accordingly, her contributions towards the acquisition of the property and its ultimate realisation, at such a considerable profit, are immeasurably superior to those of the husband.
·The husband does not agree, asserting that he contributed to the full extent of his capacity in respect of both the mortgage and other necessary outgoings for the family.
·The Property H flat was located in a Victorian building. It is the husband’s case that he conducted extensive renovations on the flat, which substantially increased the value of the property, when it was sold.
·On the other hand, it is the wife’s position that the renovations were modest in nature and were a joint enterprise to which she contributed in equal measure.
·The parties separated for around nine months in 1999. It is the wife’s case that the husband disappeared and left her solely responsible for caring for the children and discharging the mortgage on the Property H flat. She alleges that the mortgagee concerned came close to seizing control of the property.
·In these circumstances, it is the wife’s case that her parents, particularly Mrs P, provided her significant support, both financial and practical. They provided money to her to enable the mortgage to be paid and assisted her with caring for the children, so that she could continue working and supporting herself and [F] and [G].
·It is the wife’s contention that these contributions are highly significant and, without them, the Property H property would have been lost. As such, they merit special recognition.
·On the other hand, it is the husband’s case that the wife overstates these matters and he points to the fact that the period of the separation was comparatively brief, when compared to the length of the relationship and marriage between the parties.
·It is the wife’s case that, during this period of separation, the husband failed to make proper provision for the children’s financial support. On the other hand, it is the husband’s position that he paid child maintenance as required by the British Child Support Scheme.
·The parties reconciled in 2000. By this time, the wife had commenced divorce proceedings against the husband, including seeking a settlement of matrimonial property.
·It is her case that it was a condition of the reconciliation that the parties sell the Property H flat and move to a location closer to her parents’ home.
·The wife further asserts that, at this time, the husband recognised that the wife’s claim on the Property H property was significantly greater than his. As a result, as a precondition of the parties’ reconciliation, the wife asserts that she required any subsequently purchased property to be registered in her sole name.
·The husband concedes that the Property E property was registered in the wife’s name alone. However, he asserts that this fact does not properly reflect the respective interests of the parties in the property.
·It is common ground that, as a result of the profit made from the sale of the Property H flat, the Property E property was purchased without any borrowings.
·The wife concedes that Mrs P did not directly contribute any moneys to the purchase of the Property E property. However, it is the wife’s case that, without Mrs P’s assistance, she would not have been able to maintain ownership of the Property H property and so direct its proceeds into the Property E property.
·From the husband’s perspective, this acknowledgement is indicative of the fact that the restriction on title, placed by Mrs P on the Property E property, is a sham.
·
On the other hand, it seems to be the wife’s position that the fact that the husband agreed to the registration of the Property E property, in her sole name, constitutes recognition, on his part, of her superior contributions towards the acquisition of the
Property H flat, which is the major source of the parties’ wealth now.
·The husband points to the fact that he was undoubtedly in the full-time paid workforce, between 2000 and the date of separation, enjoying a similar salary to the wife. As such, he asserts that his financial contributions, during this period, must be accounted as being significant.
·On the other hand, it is the wife’s position that these contributions did not directly result in the acquisition of any property, as her efforts had already largely resulted in the acquisition of the Property E property unencumbered.
·It is the wife’s position that her contributions, as a parent and homemaker, have been far superior to those of the husband in this area. It is her case that she arranged her work commitments so as to be available to care for the children. This resulted in her frequently working nightshifts, so that she could be available to parent the children during the day.
·The husband refutes any suggestion that he was an absent or uninvolved parent. It is his case that he pulled his weight, as a parent and tailored his commitments to fit in with those of the wife so that the children could be properly parented.
At the end of the second stage, the husband asserts that the parties’ various contributions, during their long marriage, should be regarded as being essentially equal. It is his case that the parties pooled their respective financial resources and their marriage was a joint partnership to which both contributed equally, according to the maximum of their respective capabilities, albeit in different forms from time to time.
On the other hand, it is the wife’s position that her contributions have been immeasurably superior to those of the husband. She points to her more assured work record, which she asserts is indicative that she must have contributed greater income during the marriage, particularly to the Property H property, which due to its rapid appreciation in the late 1990’s, is the real font of whatever wealth the parties have now.
Further, it is her position that she did more of the parenting of the children, in difficult circumstances, including working frequent nightshifts, than the husband. As such, her overall contributions should be regarded as being vastly superior to those of the husband.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In the main, section 75(2) deals with the prospective needs of the parties. This area too, occasions controversy between the parties in the following areas:
·It is the husband’s case that the parties are of a similar age and both enjoy good health. More importantly, both he and the wife have the same professional qualifications. As such, they are likely to receive similar remuneration for the foreseeable future.
·It is the wife’s case that she currently has more responsibility for providing for [F] and [G], who are fourteen and twelve years of age respectively. As teenagers, they are at the age when expenses relating to their care are likely to be at their highest. Accordingly, it is the wife’s position that this is a factor which calls for a greater distribution of the parties’ matrimonial property to be made in her favour.
·It is also the wife’s position that the husband has been an unreliable payer of child support, in the past, both in the United Kingdom and Australia. As such, she asserts that this is also a factor which calls for a greater distribution of property in her favour.
·On the other hand, it is the husband’s position that, as he is a PAYG tax payer and likely to remain so, his level of income is readily ascertainable by the authorities and so it is likely that he will pay a significant component of child support both now and in the foreseeable future.
·It is the wife’s case that she and the children will return to live in the United Kingdom in the foreseeable future. In such circumstances, she asserts that it may be difficult for her to ensure that the husband pays a proper level of child support, if he remains living in Australia.
·It is the wife’s case that she is deeply unhappy living in Australia. As such, the court should recognise her aspiration to return to live in the property at Property E, which she regards as her and the children’s home.
At the end of the third stage, it is the husband’s position that the various section 75(2) factors, in favour of each of the parties, largely cancel each other out. As such, it is his position that there should be no further distribution of assets, in favour of either of the parties at the end of this stage.
On the other hand, it is the wife’s position that the various section 75(2) factors greatly favour her. As such, she seeks a further significant allowance of asserts, in her favour, at the end of this stage.
Overall, it is her position that the parties’ matrimonial assets should be divided 75/25% in her favour. Needless to say, she would oppose any “add back” of purported rent, from the Property E property, into any calculation based on this apportionment.
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[9] or of equalisation of assets or financial resources.
[9] See Waters & Jurek (1995) FLC 92-635 at 82,375
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation.
Marriage is by and large a joint enterprise. How much buffer spouses must give one another, when financial set backs occur, must depend on the degree of consultation between them and the level of acquiescence in their relationship.[10]
[10] See D & D [2003] FamCA 473 at paragraph 49
The task, set out for me in this case, requires me to balance and compare contributions which are by their nature different. It is difficult to place a monetary value on the contributions of a parent and homemaker, who receives no actual remuneration. The discretion I have is a wide one.
The purpose of these proceedings is to resolve these various disputes between the parties and, as far as possible, end the financial relationship between them
The husband has formally set out the orders which he seeks from these proceedings. He has no interest in retaining the Property E property, as he sees his future life in Australia. He wishes the court to set an exact figure, in Australian dollars, which the wife must pay him to acquire his equitable interest in the Property E property.
Given the wife’s ostensible intransigence to these proceedings in Australia and what he characterises as her obstructive attitude towards any proper dealings with the Property E property, particularly her apparent unwillingness to either rent the property at a fair market rental or sell it, he is alive to the fact that he may have to enforce any orders, which this court makes, in a court of appropriate jurisdiction in England. Ultimately, it may be necessary for him to take proceedings to have Mrs P’s restriction on the title to the Property E property removed as a precursor to its sale.
If possible, he would like Ms Vaden to retain the Property E property, as this seems to be her wish, provided he is paid a proper sum. For her part, Ms Vaden does not rule out the possibility that she will be able to borrow funds, secured against the Property E property, to enable such an outcome. If she pursued this possibility, it would be necessary for Mrs P’s restriction to be removed.
In his application, the husband seeks that the wife execute a declaration of trust that the Property E property is held on trust for herself and the husband and for an appointment to be made of him, as its trustee, in order to secure the ultimate sale of the property, so that he may receive his proper entitlements in cash.
Further, he wishes an order to be made that the wife transfer to him all rights that she holds pursuant to the Land Registration Act (UK) or any other legislation that entitles her to apply to have Mrs P’s restriction on the title to the Property E property removed.
It is the submission of Mr Berman, counsel for the husband, that this court has authority to transfer a chose in action, namely an entitlement to institute proceedings, from one spouse to another, in proceedings relating to a matrimonial cause.[11]
[11] See In the Marriage of Carvill (1984) FLC 91-586
Documents relied upon
The husband relies on the following documents:
i)An affidavit of himself filed 13 May 2008.
ii)A statement of his financial circumstances filed 15 January 2007.
The husband commenced these proceedings on 15 January 2007. On the date of hearing, he filed a further amended application, which formally sets out the orders, which he seeks in these proceedings.
The wife responded to this application on 14 February 2007. At this stage, she was legally represented. During the course of proceedings, she has filed a number of affidavits. These affidavits largely set out the wife’s case in respect of the parties’ financial history with one another.
During the course of these proceedings, the wife adopted these various affidavits and sought to rely on them in these proceedings. These documents are as follows:
i)Four affidavits of herself filed on 14 February 2007; 4 May 2007; 23 July 2007; and 7 August 2007.
ii)A statement of her financial circumstances filed 14 February 2007.
In addition the parties tendered a number of documents into evidence before the court. The most important of these documents included pay slips for the parties; a child support payment history for Mr Vaden from the Australian Child Support Agency for a part of the period since the parties separated; and an affidavit filed by Ms Vaden in the Brighton County Court, in relation to the divorce proceedings between the parties which were commenced in 1999 and concluded by reason of the parties’ reconciliation in 2000.
In the submission of Mr Berman, this latter document is likely to be the most reliable source of information concerning the wife’s financial position in 1999, particularly her position in respect of the mortgage payments on the Property H flat and the assistance she received from Mrs P at that time.
The evidence
The parties themselves were the only witnesses in these proceedings. Mrs P did not take part in the proceedings nor did she submit an affidavit to the court. It is the wife’s position that it was impracticable for her to give evidence in the proceedings.
As I have already indicated, Ms Vaden sought the adjournment of these proceedings. I was not prepared to grant such an adjournment, given the length of time the proceedings had been on foot and the failure of the wife to comply with earlier‑made trial directions, notwithstanding the absence of legal representation on her part. It is Ms Vaden’s position that she cannot afford legal representation at this time.
Notwithstanding the lack of legal representation and the absence of any recent affidavit, it was my impression that the wife is an intelligent and articulate person, who was able to present her case adequately. Certainly, she was able to articulate the major areas of evidentiary conflict between her case and that of the husband.
During the course of the proceedings, I was able to observe both parties at close hand and make some assessment of their respective credibility. In these reasons for judgment, findings of facts are made on the balance of probabilities, following my observation of each of the witnesses concerned. In what follows, statements of fact constitute findings of fact.
The parties are currently extremely poorly disposed to one another. I suspect that this has been the case for many years. In particular, the wife appeared to hold considerable bitterness, against the husband, in respect of the circumstances surrounding the parties’ separation for around nine or ten months in 1999/2000.
The husband is angry and frustrated at what he regards as the wife’s deceit regarding the Property E property. It is his position that the wife’s registration, as the property’s sole proprietor, is as a result of historical considerations only, which relate to the parties’ reconciliation in 2000 and the wife is being manipulative and disingenuous now as a result of the concession he offered her approximately eight years ago now.
As a result of their mutual level of animus, I do not regard either party as being an entirely reliable historian, in respect of past financial matters. The relationship and subsequent marriage between the parties was a long one. Inevitably many documents have been lost and each of them has now either forgotten details of salient financial matters or has mistakenly reconstructed them. This is inevitable, in cases of this kind and is not necessarily an indication of dishonesty.
In this case, it seems to me likely that both parties have followed the natural human tendency, in proceedings such as these, to minimise their own failings and maximise those of the other. For the same reason, both have maximised the extent of their respective contributions, during the marriage and minimised those of the other party. For obvious reasons, the parties are now struggling for financial advantage over the other, against a background where neither feels well disposed towards a former spouse.
Despite these factors, both parties seem to me to be basically honest witnesses. On balance, the husband is likely to be a more reliable financial historian than the wife. The major difficulty with the wife’s evidence is her singular lack of cooperation to date with the process of resolving the parties’ competing claims in this court.
This has put both her and the husband and indeed the court at some disadvantage in reaching an equitable resolution of the case. Ultimately, the wife must bear some of the consequences of her actions in this regard.
It is difficult to know why she has been so uncooperative, potentially to her own financial detriment. It may be because naively she hopes the husband will desist with his actions and the case will go away; it may be because she feels the appropriate place for the dispute to be determined is England and it is only as a result of a temporary accident of circumstances that she and Mr Vaden are in Australia; it may be that she thinks that any order made by a court in this country will have no effect in the United Kingdom and, if and when she returns to England, she will be able to commence her own proceedings, possibly in the absence of the husband, if necessary.
However regardless of what is her motivation, it is my view that
Ms Vaden has buried her head in the sand about these proceedings. This may be foolish on her part, but it does not necessarily make her dishonest.
However, in my view, the most likely reason as to why Ms Vaden has been so uncooperative is her visceral conviction that Mr Vaden has no entitlement to claim any interest in the Property E property, which is both legally and morally hers to do with as she likes, independent of any interference from the husband.
This stems from her belief that the husband was a useless philanderer, particularly in 1999 and it was her efforts, augmented by those of her mother, which enabled the Property H flat to be purchased and maintained, in the first place and then sold, at such a great profit, which is the only reason why she has the Property E property now.
The central evidentiary issue concerns the use the wife has put the Property E property to, in the 18 months or so since 1 January 2007. The husband asserts that it is frankly incredible that the wife would allow the property to be utilised by a person whom the wife knows only as [Y], for no proper consideration and without the benefit of any lease.
In such circumstances, he asks me to conclude that the wife has most likely been clandestinely collecting rent for the property and utilising it for her own purposes, in defiance of her obligations to make proper disclosure to the court and to frustrate his proper entitlements.
The husband has his suspicions in this regard but can produce no definitive evidentiary proof to this end. Certainly there is no evidence the wife has been directly receiving such rent. Ms Vaden says she trusts [Y] and it suits her to leave the property occupied and secure, without unnecessary legal encumbrance, so that it can be quickly vacated, when she and the children return to England, as she intends they will do.
This scenario does not appear inherently implausible to me, given my impressions of the wife’s temperament and her level of antipathy for the husband. She seems to me to be quite capable of utilising the property in this way to ensure, in the short to medium term, there is no possibility of the husband gaining any direct benefit from the property, even if this means the same consequence for herself.
Although intelligent and hardworking, the wife did not seem to me to be particularly worldly, so far as financial matters are concerned. Irrespective of her feelings for the husband, it was foolish of her to allow what she asserts is her most substantial financial asset to lie fallow in this way, whilst complaining of impecuniosity in Australia, at least in part because of the husband’s unreliability so far as the payment of child support is concerned.
In addition, given the length of the marriage between the parties, it also seems to me that she was at best naive to think that the husband was likely to have no interest whatsoever in the property. He has always vigorously contended otherwise and pressed her to have the property formally tenanted. I have no reason to doubt the wife’s claims of being deeply unhappy in Australia and of wanting to return to England as soon as is practicable. But the fact remains she is still in Australia and has provided no concrete evidence of any actual plan to leave.
Accordingly, there are consequences for the wife of either leaving the property untenanted, out of a mixture of spite for the husband and inchoate feelings that such an outcome served her interests or of secretly letting the property and concealing the profits from the husband.
In appropriate cases, there may be adverse consequences for a party, if it can be shown that he or she has deliberately failed to make a proper disclosure of some material financial fact. Such a non-disclosure may result in the court drawing an adverse inference against the party, who has not made a proper disclosure. In Weir & Weir[12] the Full Court said as follows:
“It seems to us that once it has been established that there has been a deliberate non-disclosure…then the court should not be unduly cautious about making findings in the favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…We should have thought that the courts jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.”
[12] See Wier & Wier (supra) at 79,593
In my view, the former explanation - antipathy for the husband and the mistaken belief that it somehow advanced her cause - is the most likely reason why the issue of the potential “add back” of the rental for the Property E property arises. Regardless of what sympathy one may feel for Ms Vaden, because of extreme emotions the parties’ most recent separation undoubtedly precipitated in her, which emotions are quite likely intensified by reason of her being far from home and the support of her family, there must be some consequences for her arising from the way Ms Vaden has approached this case.
a) Chronology
The husband was born in 1966. The wife was born in 1966. The parties must have met in their early 20s. At the time the wife was a student. The husband had some work as a [omitted] technician.
The wife’s training was hospital based and she was provided with accommodation. She began her training in 1988 and completed it in August 1991. The wife says the husband was living mainly with his parents. For his part, the husband asserts that the parties began to live together very early on. The wife does not agree, asserting that
Mr Vaden was “not her boyfriend straightaway.”
The commencement of a de facto relationship does not always provide such a clear point of demarcation, as does the date of the celebration of a marriage. The parties were very young at the time. No doubt the husband stayed overnight from time to time. It does not really matter. The parties had no great wealth and were untroubled by the responsibilities of children. However, after the wife had completed her [healthcare professional] training, in August of 1991, the parties were sufficiently committed to one another to decide to travel together overseas for an extended period of time. In my view, this marks the point at which their financial relationship began.
The parties returned to the United Kingdom at some time in 1992. They had spent all their money whilst travelling. Accordingly, at the time the parties began to cohabit, neither had any assets of any significant material worth.
The husband accepts that the wife commenced work, as a registered [healthcare professional], once the parties began to live together in 1992. It is the wife’s position that, for a number of years thereafter, the husband’s employment was intermittent and his income unreliable. Accordingly, she was the family’s main breadwinner, taking off the bear minimum of paid maternity leave, following the birth of [F] and then [G].
The husband acknowledges a period of brief unemployment but asserts that he was soon placed on a government based job scheme, which provided him with an income comparable to that of the wife. Thereafter, he worked in a number of positions, including as a [specific occupations omitted].
The husband is able to provide some independent evidence that he was employed by the [X], in various capacities, between November 1992 and 1998.[13] Significantly he was employed initially on a part‑time basis, between November 1992 and September 1993 and thereafter, on a full‑time basis, until June of 1995 at a salary of £8,425.
[13] See exhibit H2
The wife purchased a property, which was registered in her sole name, at Property B in December of 1992. The purchase price was £32,000, which was entirely borrowed. It is the wife’s position that the property was purchased in her name because she was the only one of the parties with any capacity to borrow money. I accept that this was so.
The Property B property was sold, at a loss, at some time in the middle of 1995. The major reason the property was sold was that both parties were anxious to buy the flat at Property H. I suspect that both of them thought that the property was a good buy and neither wished to lose it.
It is the wife’s position that, as the mortgage holder on the Property B property, she paid all the necessary outgoings in respect of the mortgage. This may be so but the husband did have some income and I have no reason to think that he did not contribute at least some of it towards joint family purposes.
Property H was purchased in July 1995 for around £39,000. It was registered in the parties’ joint names and both applied for a mortgage from the Abbey National Bank to fund the purchase. In support of his application for the mortgage advance, Mr Vaden supplied a letter from his payroll manager at the [X] indicating a salary of £8,960 per annum with overtime allowances of £895 per annum.
After the Property H property had been purchased, the husband elected to commence his studies to become a [healthcare professional]. It is his position that he received a bursary to support his studies and also continued to work part‑time two nights per week.
The wife does not accept the husband’s assertion regarding his part‑time work. It is her position that this would have been contrary to the conditions of his bursary. As such, it is her position that she supported the husband, whilst he trained for approximately three and a half years to become a [healthcare professional]. At the same time, it is her case that she paid the mortgage on the Property H flat and necessarily was the main breadwinner for [F] and [G].
Importantly, the wife concedes that she “supported and encouraged [the husband] in every way possible” regarding his training.[14] Accordingly, it cannot be said that the husband was on a selfish frolic of his own and was wantonly neglecting his familial responsibilities. I accept that it was a joint family plan that he would obtain some qualifications for himself, which in the longer term would be of benefit not only to himself but the wife and children as well.
[14] See wife’s affidavit filed 14 February 2007 at paragraph 26
As previously indicated, the Property H flat was renovated, during the period of the parties’ occupation of it. The husband asserts that a new bathroom and kitchen were installed; wooden and tiled floors polished; wood and plaster work restored; central heating installed; and an original fireplace renovated.
It is the husband’s case that the renovations were extensive and few, if any tradespeople were recruited to do the required work. It is his case that he did most of the work involved, at times with assistance from his father. He concedes that the wife provided some but minimal assistance.
As is to be expected, the wife disputes the extent of the renovation work involved and asserts that it was largely a joint project, to which both she and Mr Vaden contributed in equal measure. Disputes of this nature are common in matrimonial property proceedings. It is often difficult to attribute any exact value to the renovations which have been installed. In addition, independent verification of who did what and when is often lacking.
To my mind, what is important is that the renovations were a joint project. Accordingly, both were involved in the work required, to some degree. No doubt mutual decisions were made about what sort of renovations were to be done. Accordingly, it cannot be said that one party was a passenger, whilst the other was the major driving force, in either the renovations or indeed the wider functions of the marriage.
My impression is that both parties, in the period from 1995 to 1999 were very busy. How could it be otherwise? They were the parents of two young children. The husband was a student. The wife was working full‑time. Undoubtedly finances were tight from time to time.
However, it cannot be said that the parties did not pool their financial resources. It seems likely that the wife’s income was larger and more reliable than the husband’s was but I do not think that it can be said that he was shirking his responsibilities. He was pursuing his studies, with the wife’s acquiescence. I accept that he worked whenever he could. Accordingly, it is my finding that the parties’ marriage was a joint enterprise during this period.
The wife complains that the vast majority of the responsibility for parenting [F] and [G] fell on her whilst at the same time, she was also the family’s main breadwinner. She asserts that, in order to make ends meet, she worked frequent night shifts, which also allowed her to be available, to care for the children, during the day.
I do not doubt how hard the wife worked nor do I question her devotion to the wellbeing of the children. However, much as she would like to assert it now, the wife was not a sole parent. She shared the household with Mr Vaden. In those circumstances, I think it unlikely that Mr Vaden discharged none of the parenting responsibilities for the children.
To the contrary, it is Mr Vaden’s case that he was a devoted and fully involved father. Again, disputes of this kind are common in vitriolic proceedings such as these, particularly in the absence of independent corroborating evidence. It is likely that both parties overstate their respective cases somewhat. However, given Ms Vaden’s attitude of pained self‑righteousness towards Mr Vaden, I think her likely to be the parent who is liable to the greater degree of such overstatement.
The period following the husband’s qualification as a [healthcare professional] was one of great turbulence for the parties. The emotional consequences of this turbulence continue for the parties to the present day, particularly for the wife. Prior to the husband’s qualification, the parties put the Property H flat on the market because they jointly wished to move to a larger property, which would have a garden for the children. A contract of sale was apparently signed, but before the sale was completed, the parties separated, when the husband left the parties’ home in January of 1999.
It is the wife’s position that, for a period of around 10 months, the husband totally abrogated his responsibilities, both to her and the children, only shortly after he had reached a position where he could make some contribution. It is her case that this was a period of great financial austerity for her, which was alleviated only by the support of her family and without any assistance whatsoever from the husband.
It is a significant element of her case that her contributions, during this period, must be given great weight.
As a result of the parties’ separation, the wife commenced proceedings in the Brighton County Court against the husband. I have been provided with an affidavit, which she filed in support of her application.[15] The affidavit was sworn on 25 June 1999. Given the proximity of its swearing to the period of the parties’ separation, it seems likely to me to provide a reliable account of the wife’s financial circumstances at the time. Certainly, it seems unlikely that the wife would have been influenced by any favourable feelings she felt towards the husband. Rather, the contrary is likely to be the case.
[15] See exhibit H3
In the affidavit, the wife discloses a monthly salary of £521.00 together with some additional government benefits in a lesser sum. Her major monthly expense was the mortgage of £219.46; living expenses of £303.33; and utilities of around £105.
At that stage, it was the wife’s calculation that her monthly expenses exceeded her income by an amount of around £190. She disclosed savings of around £500.
Of some significance, in the context of the present case, the wife deposed that she had incurred a debt of around £3,300 in respect of the aborted sale of the Property H flat. It was also her position that Mrs P had advanced her the sum of £500 to secure a holiday, which the parties themselves had earlier agreed to purchase.
Although, in the affidavit of June 1999, the wife deposes to receiving child support from the husband in the sum of £220 per month, it is
Ms Vaden’s position now that the husband was unreliable in respect of this payment, which intensified the financial pressure upon her.
The husband refutes this allegation and deposed that he “paid what he had to pay”. He has produced one bank statement, which shows a deposit of £228.41, into the wife’s account on 28 June 1999.[16]
[16] See exhibit H4
I accept that this was a period of great financial austerity for the wife. Financial necessity compelled her to keep working. She was reliant on her mother for help with babysitting and to keep her head above water. There was the pressure of the failed sale of the Property H flat.
The wife continues to feel hard done by, so far as the husband’s behaviour is concerned, during this period.
In these difficult circumstances, the parties’ divorce proceedings apparently came close to resolution. It is the wife’s position that both parties recognise that she was likely to receive 80% of the parties’ net worth, principally because she was to have the ongoing care of [F] and [G]. However, the parties reconciled before any such orders were made and, if the wife is to be believed, before a decree nisi became absolute.[17]
[17] See wife’s affidavit filed 14 February 2007 at paragraph 10
It is my view that the wife remains convinced that this purported understanding, never converted into an enforceable order, is nonetheless the basis for her entitlement to retain and control the entirety of or, at the very least, the lion’s share of the Property E property.
Certainly, as a precondition of the parties’ reconciliation, she insisted that they move and a new home be purchased, which was to be registered in her sole name. It is the flavour of her case that the fact that the Property E property was so registered was to protect her in future from any further misbehaviour by the husband.
Such an agreement was never formally recorded. It is difficult to see how it could have been. Marital fault does not provide any grounds for the division of matrimonial property in this country.[18] In addition, much water has flowed under the bridge since 2000. What happened in 1999/2000 cannot now form the basis on which the parties’ matrimonial property is to be divided. The purported basis of division then cannot be applied to the circumstances which prevail now.
[18] See Kennon & Kennon (1997) FLC 92‑757 at 84,294‑5
The Property H flat was sold in May 2000 for £162,000. It had proved to be a good investment. After payment of the mortgage and other expenses relating to sale, it was possible for the Property E property to be purchased without the necessity of borrowings. The purchase price was £115,000. Neither party suggests there was any significant excess of funds released by the sale of the Property H flat. Certainly it is not suggested that any moneys were advanced to Mrs P or that she made any demand for such a payment.
The husband has a different perspective as to why the Property E property was registered in the wife’s sole name. It is his perception that the parties’ reconciliation was successful and the relationship between the two was strong. He deposes as follows:
“We had also had discussions about starting a business or buying another property and there would be advantages to us if the property was registered in her name solely. There was never any intention that I relinquish any rights in the property, it was merely an arrangement between a husband and a wife that we saw suiting our marriage and our future financial planning at the time.”[19]
[19] See husband’s affidavit filed 13 May 2008 at paragraph 17
I accept the husband’s evidence that neither Mrs P nor any other member of the wife’s family directly advanced any funds to secure the Property E property. Nor at the time of the property’s purchase did
Mrs P see any necessity to safeguard any interest which she claimed in the property. The wife does not seriously suggest anything to the contrary.
It seems to be Ms Vaden’s position that Mrs P advanced at least £15,000 to her during the period of the parties’ separation in 1999. Given the contents of her affidavit, filed in the Brighton County Court, this seems to be excessive and have some aspects of an ambit claim.
At the very most, the mortgage payments on the Property H flat would have been £2,200; the moneys lost in the sale around £3,300; the holiday £500 and perhaps some other costs.
At the time of the swearing of this affidavit, the wife calculated her monthly shortfall of funds in an amount of around £192. This was apparently calculated on the basis of maintenance from Mr Vaden, which she says she never received. I think it likely that she received at least some maintenance but suspect Mr Vaden was not as reliable as he now deposes. I also accept that Mrs P provided financial support but doubt it was anywhere near the vicinity of £15,000.
In cross‑examination, Ms Vaden conceded that she understood the basis of Mrs P lodging a restriction on the title of the Property E property relates to her contention that she is now entitled to be repaid a sum of £15,000, as a result of her advances made in 1999. Ms Vaden also conceded that her mother had never contributed any moneys, which directly related to the purchase of the Property E property or in respect of its renovation or refurbishment.
It seems to me to be self‑evident that Mrs P would not have lodged the restriction on title, if the parties had not separated. It also seems to me highly unlikely that she would have ever demanded any repayment from her daughter arising from the events of 1999. In my view, it cannot be doubted that Mrs P advanced the various sums, which she did, as gifts to her daughter, motivated by her love and affection for her and her desire to assist her through a period of great financial hardship.
Accordingly, it is my view that there is no proper basis in law for
Mrs P’s restriction on the title concerned. Accordingly, it appears axiomatic that the restriction was intended to be a device to frustrate Mr Vaden pursuing an application for property settlement, either in this country or the United Kingdom. From the wife’s perspective, she saw the restriction as acting to her advantage.
The parties lived in the Property E property, with the children, from May 2000 until they emigrated to Australia in February of 2005. During this time, both parties were in the paid workforce and enjoyed similar salaries. They pooled their financial resources and utilised them for joint family purposes. Necessarily, as the property was unencumbered, there were no mortgage payments to be made.
The parties were unsure whether they would find life in Australia to their liking. They came to this country on temporary working visas and elected to retain the Property E property, in the event that they decided to return to the United Kingdom. Initially, they decided to rent the property, to the wife’s brother, at a rental of £500 per month. This was less than the going market rate but the parties mutually agreed that it was preferable to rent the property to a family member, who would be willing to vacate it at short notice, if they returned to England.
The parties settled in rental accommodation at Property N. The husband obtained employment with the South Australian government. The wife also obtained work one or two months after the family’s arrival in Australia.
The parties transported most items of their furniture from the UK to Australia. It is common ground that these items of property are currently in the wife’s possession and have a modest value. The parties also brought their accumulated savings to Australia, which converted to around $36,000.
The parties left a Renault motor vehicle behind in England with the wife’s brother to sell on their behalf. In January of 2006, the wife received the sum of $9,000, when her parents visited Australia.
This sum represented the proceeds of sale of the Renault motor vehicle and some of the rent from the Property E property.
The parties purchased a campervan, when they arrived in Australia. This was sold in mid‑2006 and a Hyundai Santa Fe motor vehicle was purchased for $18,000, using the moneys received from the United Kingdom and the trade‑in from the campervan. The wife retains this vehicle, which has been formally valued.
The relationship between the parties in Australia seems to have been an unhappy one, marked by mutual mistrust over the control of their ostensibly jointly held bank accounts. Both accuse the other of clandestinely withdrawing funds for personal advantage. I suspect that neither is without fault in this regard. Certainly, the wife acknowledges that she opened an account with the Australian Central Credit Union, in her own name, and placed some matrimonial funds in this account.
She retains approximately $5,000 in this account.
The parties had planned to travel to the United Kingdom, in May of 2006 for a family holiday, particularly to attend the wife’s brother’s wedding. By this time, the marriage was in serious and irremediable difficulties. The wife refused to travel to the United Kingdom unless the husband released her from the lease of the Property N property. This he refused to do. I suspect that both parties were jockeying for financial advantage knowing that their separation was inevitable.
Nonetheless, the family travelled to England together in May of 2006. They lodged temporarily in the Property E property. The parties formally separated around this time and the husband left the Property E property and moved in with friends.
The wife and children returned to Australia shortly afterwards. Upon her return, she vacated the Property N property. It is Ms Vaden’s position that she could not afford to keep up the rent of the property. The husband is critical of her for what he believes was precipitate and spiteful behaviour, which resulted in the loss of the parties’ rental bond in the sum of $2,000. He is also critical of the wife for retaining the greater proportion of the parties’ furniture and effects.
The wife’s brother vacated the Property E property at the end of June 2006. The husband had planned to return to Australia on 2 July 2006. He did not do so. It is his case that he discovered, by chance, that the wife had placed an advertisement, on the Internet, offering the
Property E property for lease at a monthly rental of £850. The wife had not consulted him about this arrangement. The husband has tendered a copy of the Internet advertisement.[20] The wife does not dispute this evidence or that the rent she sought at the time was a reasonable market value one.
[20] See exhibit D to the husband’s affidavit filed 13 May 2008
Undoubtedly, the husband saw this action as a provocative one. He sought legal advice and was advised to place his own charge over the property claiming a “notice of home rights under the Family Law Act 1996.” More importantly, on 28 June 2006, the husband himself moved back into the Property E property, having been advised that his occupation would both prevent the wife selling the property or leasing it.
The husband caused his English solicitors to write to the wife, in South Australia, informing her of his action in moving back into the
Property E property and lodging a charge over it. The letter also stated that Mr Vaden did “not intend to return to Australia in any event.”[21] The estate agents retained by the wife, to let the property, were also formally informed by the husband’s solicitors of his actions and his view that he was entitled to occupy the property pursuant to section 30 of the Family Law Act 1996 (UK).
[21] See exhibit A to the wife’s affidavit filed 14 February 2007
Notwithstanding his assertion, in his solicitor’s letter, Mr Vaden returned to Australia on 5 August 2006. The situation between the parties remained tense and unhappy. It is the husband’s position that the wife was extremely obstructive to him spending any time with [F] and [G]. On the other hand, it is the wife’s position that the children were resistant to seeing their father because they had formed a negative view of him as a result of his prior behaviour towards them.
Before Mr Vaden left the United Kingdom, Ms Vaden alleges that he rented the Property E property to a Mr S but did not account to her in respect of any rent received. The husband denies that there was any such arrangement. Neither party chose to pursue this issue in the proceedings before me on 30 June and 1 July 2008.
However, the wife remains aggrieved that the husband incurred a number of liabilities, in respect of his occupation of the Property E property, which he has not paid. She also asserts that the husband left the property in a poor state of repair.
I do not think that the wife’s evidence regarding the alleged accounts incurred by Mr Vaden is particularly compelling. Certainly, one of the accounts, upon which she relies, relates to changing the locks at the property in December of 2006.[22] What is clear is that in December, a member of the wife’s family moved into the property with the approval of Ms Vaden and Mrs P. As previously indicated, this remains a major bone of contention between the parties.
[22] See exhibit A to the wife’s affidavit filed 4 May 2007
It is the wife’s position that she has “refused to sell or commercially rent” the Property E property because it is likely that she will want to return to live there. As such, she wishes to have the ability to return to the property at “short notice”. It is also her position that there are difficulties incumbent in the property being commercially leased, not the least of which is the husband’s actions in registering a restriction on the title. The wife asserts that this may prevent any lease being made of the property.[23]
[23] See wife’s affidavit filed 4 May 2007 at paragraph 17‑18
Needless to say, the husband does not accept the validity of these submissions. It is his position that the property could quite easily be tenanted at an appropriate commercial rental. He has his suspicions that this is what is actually occurring clandestinely and that Mrs P is acting as the wife’s agent in this regard and collecting rent from [Y], which she has either distributed to the wife already or is holding on her behalf.
The husband disputes the wife’s assertion that the case raises complex jurisdictional issues, particularly because of Mrs P’s purported interest in it. As previously indicated, it is Mr Vaden’s view that this is nothing more than a concoction designed to defeat or frustrate his proper claim.
I have no knowledge of the intricacies of English property law. However, it seems to me, there would have been no impediment to the wife commercially renting the Property E property, if she had wished to do so. Certainly, she could see no difficulty with such an option in June of 2006.
I find it difficult to conceive that lodging a notice of home rights by the husband could act as a bar to such an outcome, particularly as the husband was advocating the property’s rental and no doubt would have been prepared to formally provide his assurance, in this regard, to any prospective tenant.
The husband commenced these proceedings on 15 January 2007, raising issues to do with property and children. At that stage he sought the immediate sale of the Property E property and the equal division of its proceeds. The wife responded to this application on 14 February 2007. She did not raise any issues regarding the relocation of the children from South Australia to the United Kingdom. She did however seek a declaration be made that the most convenient and appropriate forum for the determination of the parties’ respective interests in the Property E property was a court within the United Kingdom.
On 12 April 2007, the husband filed an application seeking that the Property E property be leased forthwith, through an agreed estate agent, at a commercial rental. He also sought an order that the net rents be apportioned equally between the parties. It was the wife’s position that this court had no jurisdiction to make such an order. However, it cannot be said that the wife was not formally put on notice, regarding the husband’s attitude towards the property.
On 7 August 2007, the wife raised the issue of the children returning to the United Kingdom in her care. Accordingly, she sought an order that she be at liberty to relocate to the United Kingdom with [F] and [G]. Prior to that time, the parties had been in dispute as to the arrangements for the children to spend time with each of them. The husband seeking a shared care arrangement and the wife being strongly opposed to such an outcome, on the basis that it was not in accordance with the children’s views.
At the time, the wife deposed to being deeply unhappy in Australia and feeling isolated and financially impoverished in the country.
I determined that a family assessment should be prepared and a trial date allocated, as quickly as possible, to determine the international relocation issue. Three days were set aside for the trial commencing on 29 January 2008. It remained the wife’s position that it was inappropriate for this court to deal with the issue of the parties’ property, particularly whilst her application to relocate the children to the United Kingdom remained outstanding.
On 7 September 2007, I determined the preliminary jurisdictional issue.[24] I determined that the children’s issues, particularly the international relocation issue, should be determined first. Accordingly, the further hearing of the husband’s property application was stayed until the determination of the children’s aspects of the case.
[24] See Vaden & Vaden [2007] FMCAfam 744
I considered that, if the wife was successful, in her ostensible application, it was extremely likely that, upon her return to the United Kingdom, she would immediately commence property proceedings in that country and that it would be oppressive to have two sets of proceedings on foot. At this stage, given the complexity of the children’s aspect of the case, I also ordered that [F] and [G] be independently represented.
The parties were able to reach an accommodation with one another regarding the children’s issues and a consent order was made on 29 January 2008. On this occasion, the parties’ property applications were fixed for final hearing, in this court, on 29 June and 1 July 2008. The husband was directed to file his trial material by 5 May 2008.
The wife to file her material by 19 May 2008.
The wife did not comply with this order and did not formally apply to adjourn the proceedings, until the morning of 30 June 2008.
As previously indicated, she has neither returned to the United Kingdom nor commenced property proceedings in that country. The orders of
29 January 2008 entitled the wife to relocate the children to the
United Kingdom on giving the husband two months’ notice.Both parties are currently employed in Australia. The husband is earning up to $1,719.45 gross per week. Up to 11 May 2008, he had earnt $52,594.05 gross for the 07/08 financial year. The wife earns $2,966 gross per fortnight and is able to sacrifice a portion of her salary into rent to achieve a tax benefit. She has recently signed a 12‑months lease on a rental property for her and the children.
The husband maintains that Ms Vaden has no current intention of returning to the United Kingdom. Ms Vaden asserts otherwise but has no clear plans to depart Australia and, as previously indicated, has recently entered a lease and received a promotion at her work. She is employed on a recurrent three‑month contract.
I have not been provided with any current child support assessments in respect of [F] and [G]. It is the husband’s position that he has paid nearly all of the child support assessed of him. However, recently due to a motorcycle accident, he has been unable to work and has fallen into arrears. On the other hand, it is the wife’s position that the husband has been recalcitrant in respect of his responsibilities to pay child support.
It is the husband’s understanding that he has been assessed to pay just over $1,000 child support per month. As a result of his accident, he has been paying $400 per month and has fallen into arrears in a sum of around $3,000. The wife has provided a transaction statement for the period from 1 June 2006 to 17 April 2007. This is a period of 46 weeks and shows a collection of $6,982.47 or around $152 per week.
More recently, Mr Vaden has downloaded his payer payment history for the period from 1 July 2007 to 1 July 2008. This shows he has paid $8,266.39 or around $159 per week.
The final area for controversy, between the parties, concerns an account held by the wife in the Abbey National Bank. At around about the time of the parties’ separation, the account held just under £5,000.[25] It is the husband’s position that this sum represents joint matrimonial property.
[25] See exhibit G to the husband’s affidavit filed 13 May 2008
On the other hand, it is the wife’s position that she received a sum of around £4,000, after the parties separated, from her parents to assist her with the expense of reaccommodating herself and the children, when she returned to Australia. She has provided a statement for the account, as at 3 May 2006, which shows a balance of £355.07. She is unable to locate the statement for May. On balance, I have no reason to disbelieve the wife’s evidence in this regard.
Step One – the pool of assets available for division
As previously indicated, the parties are in substantial agreement about most of the assets available for division between them. For the reasons provided above, I do not propose to include the Abbey National bank account in the parties’ pool of assets. The other major area of contention between the parties concerns whether there should be a notional addition to the pool of matrimonial property the rent attributable to the Property E property.
The Full Court of the Family Court[26] has identified three areas where it is appropriate to notionally “add back”, into a pool of matrimonial property, assets which do not exist or cannot be proved to be still existing. The circumstances are as follows:
·Where matrimonial assets have been utilised to pay the parties’ legal fees, thus diminishing the pool of assets available to be distributed between them and so creating a situation where the normal rule whereby each party should bear his or her own costs is defeated.[27]
·Where there has been a premature distribution of matrimonial assets.[28]
·Where one of the parties has embarked on a course of conduct, either recklessly or with the direct intent to reduce or minimise the effective value of some item of matrimonial property.[29]
[26] See In the Marriage of Omachini (2005) 33 Fam LR 134 at 144
[27] See In the Marriage of DJM and JLM (1998) 23 Fam LR 396
[28] See In the Marriage of Townsend (1994) 18 Fam LR 505
[29] See In the Marriage of Kowaliw (1981) FLC 91-092 at 76,644
In regards to the third of these categories, it has been pointed out by the Full Court that this principle represents a guideline for the court rather than a fixed code, bearing in mind the discretionary nature of the jurisdiction created by section 79 of the Family Law Act.[30]
[30] See In the marriage of Browne & Green (1999) 25 Fam LR 482
In my view, each of these categories, regarding the notional adding‑back of assets, is to be regarded in the same way. Accordingly, whether an item of property is to be notionally added into a pool of matrimonial assets, in circumstances where the value of that asset cannot be definitively established because it no longer exists or the situation relates to an alleged wastage of an asset, must depend on the circumstances of the case concerned and on an overall consideration of the justice and equity of the situation.
It is the husband’s position that the wife has either wasted the asset represented by the Property E property, which includes his substantial equitable interest, by failing to rent it or has secured a premature distribution of assets in her favour by secretly collecting rent on the property. Either way, Mr Vaden seeks to include a notional amount of £16,200 in the parties’ pool of assets. This represents eighteen months of rent at £900.00 per month.
I do not believe that the evidence is sufficient for me to conclude that there has been a clandestine rental arrangement in respect of
Property E. The question therefore arises whether it can be found that the wife has “acted recklessly, negligently or wantonly” in respect of Property E, so that the overall value of matrimonial assets has been reduced or minimised.
In Kowaliw, Baker J indicated that, as a matter of general principle, financial losses, either individually or jointly incurred by parties, during the course of their marriage, should ordinarily be shared by them. The Property E property has not been reduced in value, as a result of the wife’s conduct. Rather, the property has not been utilised to its full potential.
Both parties blame the other for this state of affairs However, the fact remains that technically at least, the property was in the wife’s sole name. True it is that the husband has consistently and vociferously advocated that the property should be rented, which overtures the wife has steadfastly ignored.
In all the circumstances of this case, I think it would be an unduly simplistic analysis to regard the wife as having wasted the sum of £16,200.00 or that she should be notionally regarded as having had the benefit of this sum, which I am not satisfied has ever really existed. Rather, I think it appropriate that I deal with this issue in another way.
Although the Full Court has generally disapproved of the notion of “negative contributions”,[31] it is my view that, given all the circumstances of this case, it would be preferable to deal with the consequences of the wife’s conduct, in respect of the Property E property, between January of 2007 and now, under the second step of the process, which deals with the assessment of the parties’ respective contributions overall, including in the period between now and separation rather than through the artificial, and I believe potentially fraught, exercise of adding back assets.
[31] See SJS & NS (2005) 33 FamLR 109 at 119
Accordingly, for those reasons, I find that the parties have the following pool of assets available to be divided between them:
Assets
$
Property E
496,800.00[32]
Wife’s motor vehicle and house contents
13,006.00
Friends Provident Policy
14,426.00
Australian Central Credit Union account
5,027.00
Total
529,259.00
[32] I have utilised the agreed value of the property, which is £240,000.00 and then taken an exchange rate of £1.00 being equal to $2.07. This was the exchange rate at the date of hearing.
The wife has not provided up to date details of her Australian superannuation entitlements. The husband’s Australian superannuation entitlements amount to $14,732.00. I find the wife is likely to have a similar amount of superannuation.
Given the brief period of time the parties have lived in Australia, it is to be expected that their Australian superannuation entitlements will be modest. Their incomes are similar. Neither party proposes any splitting orders in respect of superannuation. Accordingly, I do not propose to make any further orders in respect of the parties’ Australian superannuation entitlements.
Step two – assessment of contributions
The relationship between the parties was one of significant length, being at least fourteen years in duration. The relationship produced two children. I am satisfied that overall both parties have made significant financial and non-financial contributions, during their marriage, both as wage earners and parents.
This is not a case where one party brought into the marriage significantly more assets than the other. Rather, it is the wife’s case that she worked harder and longer in the paid workforce, particularly prior to 1999, than the husband did, and she provided more of the parenting and home making responsibilities for [F] and [G].
Marriage is a partnership. For the reasons already provided, I do not find that the husband can be regarded as a bystander, during the parties’ marriage, particularly when he was studying to be a [healthcare professional]. This was a project of which the wife approved and to which she gave her full support.
The evidence reveals to me that both parties were very busy during their marriage, but particularly the wife, who had to juggle the responsibilities of being a parent with a career. It is undoubtedly the case that her earnings, during the marriage, were superior to those of the husband, who in the early stages of the marriage was largely unqualified.
In addition, during the period of the parties’ separation, in 1999, the wife was the mainstay of the family’s financial support for a period of around ten months. I accept that during this period she received extensive financial assistance from her mother, Mrs P. I do not think that that assistance was extensive as the wife would now have the court believe it to have been but, in my view, it was significant nonetheless.
On the evidence led before me, I do not believe that I can conclude that the moneys advanced by Mrs P to the wife constituted a loan, which she (Mrs P) required to be repaid. Rather, I am satisfied that the motivation leading to the various advances made by Mrs P was the parent/child relationship, which she shared with Ms Vaden and her devotion to her grandchildren, particularly her hope that they would remain financially secure. As such, I am satisfied that these contributions made by Mrs P should be taken to have been made on behalf of the wife alone.[33]
[33] See Gosper & Gosper (1987) FLC91-818 and Kessey & Kessey (1994) FLC92-495
Bearing in mind the wife’s greater contributions during the marriage, both through her own efforts and those attributed to her in respect of Mrs P, I have come to the conclusion that a proper assessment of the parties’ respective contributions, during the marriage, favours the wife in magnitude of 55/45% of the parties’ asset pool.
However, an assessment of the parties’ post separation contributions favours the husband, chiefly in regards to the wife’s wastage of the asset represented by the Property E property. However, at the same time, the wife has provided the vast majority of the parenting of the two children concerned, albeit she has received some financial support from the husband. In regards to the period post-separation, I would award the husband an allowance of 2.5% in respect of the matrimonial pool of property.
Accordingly, at the end of the second stage of the court’s deliberation, I assess the parties’ respective contributions as being 52.5/47.5% in the wife’s favour.
Step 3 – section 75(2) factors – the prospective needs of the parties
Sub-section (a) – The parties are both in their early forties. They enjoy good health. Ordinarily, I would expect both of them to have very many years of productive life before them. Accordingly, the matters which fall for consideration under this criterion are not significant in this case.
Sub-section (b) – Both parties are qualified psychiatric nurses, in full-time employment, who enjoy similar salaries. Their services are likely to be much in demand for the foreseeable future, either in England or Australia.
Accordingly, the parties’ respective professional qualifications are likely to ensure that they will both enjoy some measure of financial security in future. The most valuable asset parties can take out of a marriage is a substantial and reliable income earning capacity.[34]
Both parties, in this case, have such an asset. Accordingly, the matters which fall for consideration under this criterion are not determinative.
[34] See Clauson & Clauson (1995) FLC 92-595 at 81,911
Sub-section (c) – [F] is fourteen years of age. [G] will be thirteen in December. Accordingly, both children are of an age when, most likely, their financial demands will be at their greatest. Both will be attending secondary school, most probably until they are seventeen or eighteen. They will have expensive educational, sporting and other interests, which they will need to pursue.
The parties have agreed that the children will live predominantly with the wife. In the event she returns to live in the United Kingdom, the children will be restricted to spending time with their father only during school holidays. The parties have agreed that they will share the costs of the children’s travel to spend time with their father on at least one occasion each year.
In all these circumstances, the burden of providing financially for the children will rest heavily on the wife. In my view, this is a factor which significantly favours the wife.
The wife, of course, does not bear the financial responsibility for maintaining the children alone. She is and will remain entitled to claim child support from the husband, as indeed she has done. However, it must not be forgotten that the payment of child support, in no way compensates the principle care providing parent for the loss of career opportunity and the inevitable restrictions upon working hours and choice of work, which the obligation to care for children entails.[35]
[35] See Clauson & Clauson (supra) at 81,911
Sub-section (d) & (e) – These do not appear to be relevant considerations in this case.
Sub-section (f) – The parties, as a result of being in Australia for just over three years, have not made extensive contributions to the accumulation type superannuation funds, which are favoured in this country. I am unaware of what level of retirement benefits each has as a result of their prior periods of employment in the United Kingdom. Accordingly, I am not in a position to make an accurate assessment of the respective preparedness for retirement of either of the parties.
However, given their respective ages, both parties are some way away from retirement and so, theoretically, have time to accrue further superannuation and make financial provision for their later years, whether this be in the United Kingdom or Australia.
Sub-section (g) – One of the sad consequences of the end of the marriage between the parties is an inevitable reduction in the standard of living for them both. It is trite, but true nonetheless, that two households cannot live as cheaply as one. What is important, in respect of this subsection, is that any drop in standard of living should not be borne disproportionately by one party.
It is the wife’s case that she and the children will be returning to live in the United Kingdom at some stage in the not so distant future. In this eventuality, she wishes to return to live in the Property E property, which she regards as her family home. I can understand why this would be so and why the property holds such emotional connections for her.
However, I am concerned that the wife’s feelings of entitlement in respect of this property have clouded her judgment. The wife is not entitled to retain this property at the cost of a proper recognition of the husband’s proper entitlements. If the wife is unable to raise a sufficient sum of money to pay out the husband, in respect of his interest in the property, it will have to be sold so that the husband may achieve his proper entitlements.
Sub-section (h), (ha), (j), (k) (l) (m) & (n) – I do not think that any of these subsections have any particular application in the present case.
Sub-section (na) – The weight to be attached to a child support assessment will vary in the circumstances of each particular case concerned. The court is directed to look at the amount of the assessment, the financial circumstances of each of the parties, the needs of the children concerned and whether child support is likely to be paid regularly and at an adequate rate in future.[36]
[36] See Clauson & Clauson (supra) at 81,911
At present both parties are PAYG tax payers. As such both their levels of income are readily ascertainable and amenable to the application of the formula provided by the child support legislation. As such case, it is likely that the husband will continue to provide a proper level of financial support, in respect of both children, for the foreseeable future.
Sub-section (o) & (p) – neither of these sections is relevant in the present case.
Conclusions – section 75(2)
I am satisfied that, upon an overall assessment of the section 75(2) factors, a further adjustment in favour of the wife is appropriate.
The greater difficulty is assessing what that further distribution should be, in percentage terms, given the reasonably small extent of the property pool and the fact that it is unlikely to be sufficient to satisfy the needs of both parties.
Accordingly, the proper adjustment, in respect of factors after contribution, often becomes critical in cases such as this one. For these reasons, the Full Court has commented that the centre of gravity, in the determination of property cases, has shifted towards the assessment of section 75(2) factors and, as such, courts such as this one, have been directed to give the provisions concerned “real rather than token weight”.[37]
[37] See Waters & Jurek (1995) FLC 92-635 at 82,376
The wife will have the predominant care of two teenage children.
She is likely to receive child support from the husband but the burden of providing for these children will be heavy. Although she is a professional person, in full-time employment, she cannot be described as a wealthy person or a person who receives a large wage. Bearing in mind these factors, I believe that a further distribution of property of 7.5% is warranted in the wife’s favour.
Conclusions – section 79(2) – is this a just and equitable outcome
The final step in determining property proceedings is to stand back and consider whether the proposed result represents a just and equitable outcome. Considerations of justice and equity must inform each step of the court’s process and the overall result. It is all very well to talk in percentage terms, so far as orders are concerned, but at the end of the day what matters to the parties is what the orders mean in dollars and cents and what effect they have on their respective long term aspirations.
I have decided that the parties’ assets, as I have found them, are to be divided sixty percent as to the wife and forty percent to the husband, excluding the parties’ individual entitlements to superannuation held by them in Australian based funds.
Sixty percent of their assets is represented by the sum of $317,554.00 and forty percent by the sum of $211,703.60. The wife has assets, in her possession, in the form of her motor vehicle, household contents and credit union account to the value of $18,033.00.
The Friends Provident policy is a life policy taken out by the parties in respect of each of their lives. Its surrender value is modest, being currently $14,426.00. It seems the parties took it out in conjunction with the mortgage which they took out on the Property H property. Whether the policy can be split into two is unclear to me. I propose that the husband should retain it.
Accordingly, for the husband to receive forty percent of the parties’ assets, it will be necessary for Ms Vaden to pay Mr Vaden the sum of $197,277.60.
Whether the wife has the capacity to raise this sum is unclear to me.
If she is unable to raise the necessary sum, it will be necessary for the Property E property to be sold.
The wife has shown herself to be strongly resistant to the court’s process. I have previously expressed my concern about how any orders of this court are to be enforced in the United Kingdom. For those reasons, I propose making the orders essentially proposed by the husband.
I am satisfied that this outcome represents a just and equitable one given all the circumstances of this case.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding two hundred and seven (207) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 14 July 2008
and Clauson v Clauson (1995) FLC 92-595
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