Vann and Compton

[2018] FCCA 2106

FEDERAL CIRCUIT COURT OF AUSTRALIA

VANN & COMPTON [2018] FCCA 2106

Catchwords:
FAMILY LAW ­Property dispute – 18 year relationship – husband paraplegic and in receipt of Transport Accident Commission payments and other assistance – both parties contributing until husband’s injury – wife able to and intending to return to work force – parties owning two investment properties – just and equitable that husband retain matrimonial home and wife retain the investment properties.

Cases cited:

Stanford & Stanford (2012) 247 CLR 108

Applicant: MS VANN

Respondent: MR COMPTON

File Number: DGC 1401 of 2017

Judgment of: Judge Burchardt

Hearing date: 28 June 2018

Date of Last Submission: 28 June 2018

Delivered at: Dandenong

Delivered on: 10 August 2018

REPRESENTATION

Counsel for the Applicant: Mr Leeton

Solicitors for the Applicant: Ressan Lawyers

Counsel for the Respondent: Mr Wraith

Solicitors for the Respondent: Bayside Family Law Solutions

ORDERS

1. Within 60, days subject to the Wife obtaining funds to refinance the mortgages, the Husband do all such acts and things and sign all such documents as may be required to transfer to the Wife at the expense of the Wife all of his right, title and interest in the real property situate at and known as Property B1 and Property B2 (the Property B1 & B2 properties)

2. The Wife be liable for and indemnify the Husband against all apportionable rates, taxes and outgoings with respect to the Property B1 & B2 properties.

3. That in the event that the Wife fails to obtain finance by the date, the Property B properties be sold altogether out of Court, and upon completion of the sale, the proceeds of the sale be applied as follows:

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

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

   (c)Thirdly, the balance to the Wife.

4. Pending the payment or completion of the sale,

   (a)the Wife pay all instalments pursuant to the mortgage and all rates and taxes and the like apportionable outgoings of the real property as they fall due;

   (b)The parties hold their respective interests in the Property B1 & B2 properties upon trust pursuant to these orders; and

   (c)Neither party encumber the Property B1 & B2 properties without the consent in writing of the other party.

5. Within 60 days, subject to the Husband obtaining funds to refinance the mortgage, the Wife do all such acts and things and sign all such documents as may be required to transfer to the Husband at the expense of the Husband all of her right, title and interest in the real property situate at and known as Property A (the Property A property).

6. The Husband be liable for and indemnify the Wife against all apportionable rates, taxes and outgoings with respect to the Property A property.

7. That in the event that the Husband fails to obtain finance by the date, the Property A property be sold altogether out of Court, and upon completion of the sale, the proceeds of the sale be applied as follows:

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

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

   (c)Thirdly, the balance to the Husband.

8. Pending the payment or completion of the sale,

   (a)The Husband pay all instalments pursuant to the mortgage and all rates and taxes and the like apportionable outgoings of the real property as they fall due;

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

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

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

   (a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;

   (b)Each party forgo any claims they may have to any superannuation benefits belonging to or earned by the other;

   (c)Insurance policies remain the sole property of the owner named thereon;

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

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

10. That the wife collect her personal belongings on Wednesday 15 August 2018 at 1.30pm or a time agreed in writing, the items to be collected include but are not limited to the following:

    (a)Any remaining clothing;

    (b)Ornaments;

    (c)A share of photo albums;

    (d)Blanket box and matching cushions;

    (e)Remaining artwork (gifted to the wife); and

    (f)Tupperware and cooking moulds.

11. That all extant applications of the Husband and Wife respectively be otherwise dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 1401 of 2017

MS VANN

Applicant

And

MR COMPTON

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute that arises in the most tragic circumstances.  The respondent husband was severely injured and rendered paraplegic in a road accident on 2011.  The husband seeks that he retain the former matrimonial home, together with its associated mortgage, and that the wife become the owner of two investment properties and take responsibility for their mortgages.  The husband additionally seeks that the wife pay him $50,000.  The wife seeks that there be a total property adjustment of some 40 per cent to her and 60 per cent to the husband. 

2. The critical issue in the case is whether the husband should retain the matrimonial home, which has been adapted to his paraplegic circumstances.  For the reasons that follow it is just and equitable that he retain this property. 

Agreed or uncontroversial matters

1. The applicant wife was born on 1971 and the respondent husband on 1966.  They commenced cohabitation in about 1998 and married on 2000.  Their child, Mr L, was born on 2000 and their daughter, [X], on 2002. 

2. The husband owned a property at Property C at the commencement of the relationship which was subsequently sold in 2004.  The husband has deposed, without material challenge, that there was approximately $125,000 net proceeds from the sale of that property which were applied towards the former matrimonial home in Property A. 

3. Following the husband’s accident in 2011, he was hospitalised for approximately 13 months.  He received lump sum payments from the Transport Accident Commission (“TAC”) in the sum of $263,750 and he received a life insurance payout from Insurer of $50,000, together with superannuation from Super Fund of $26,369 (he has no superannuation left) and $24,000 from fundraising.  The latter of these was considerably assisted by the wife’s activities.

4. The TAC has paid approximately $160,000 (wife’s version) or $180,000 (husband’s estimate) to modify the house to make it suitable for the husband.  It includes a pool that he uses regularly to alleviate his discomfort.  The parties appear to agree, notwithstanding these alterations, that the net effect would be somewhat to lower the resale value of the house.

5. The parties bought two investment properties at Property B1 & B2 in 2012.  The wife’s mother lives, and as I understand it has since the purchase, in one of the units and pays rent.  The other is rented out. 

6. The son, Mr L, is undertaking an apprenticeship and lives with his father.  [X] appears to live either with the father or with friends from time to time.

7. The parties separated, it is agreed, on 16 November 2016.  There is dispute as to whether or not the mother was already, at that time, in a relationship with her current partner, Mr A, but it is common clause that the husband took out an Intervention Order (“IVO”) against both the wife and Mr A, and he was, himself, the subject of an IVO in January 2017.

8. At the time of separation, the wife took $25,000.

9. The wife had ceased her prior employment, both in paid employment and self-employment, to look after the husband following his injuries.  She was paid a carer’s allowance after a period of time, not precisely indicated but approximately several years, until separation when her salary as a carer was ceased. 

10. The wife has, since separation, moved to (country omitted) with Mr A, where she resides.  There is an issue as to whether Mr A and the wife will return to live permanently in Australia.  It should be noted in passing that I disclosed to the parties to this proceeding the fact that I had recently given judgment in a matter between Mr A and his former partner.  No application was made by any of the parties arising from this disclosure.  It should be noted that Mr A was awarded a property settlement of some $450,000, and that he and the wife in this proceeding have a rental property prepaid for at least another year in (country omitted). 

The parties’ affidavit material

1. Much of what the parties have put in their affidavits is paraphrased in the agreed or uncontested matters above.  The affidavits traverse in some detail what have plainly been disagreements between the parties about the husband’s purchase or otherwise of vehicles and their value.  I should emphasise that, as with the wife’s claims for destruction for a picture frame and loss of coats, these matters are, in my opinion, of so little significance in the scheme of the parties’ total finances as not to warrant detailed consideration by the Court.  The parties have, in any event, produced an agreed pool of the parties’ assets.  It will be more profitable to concentrate on what the parties actually said when they gave evidence. 

The evidence given at Court (taken from my notes)

The evidence of the wife

1. The wife adopted her affidavits as true and correct.  She is unemployed and lives between (country omitted) and Victoria, where she resides with her mother.  In evidence-in-chief, she said that she proposed to return from (country omitted) in the next few months with her partner.  She moved to (country omitted) in 2017.  She sold her car, a Motor Vehicle 2, for $21,000 and withdrew $25,000 from the parties’ joint account.  The husband had terminated her employment immediately upon the cessation of the relationship.  The $21,000 and $25,000 had been spent.  She intends to work in Melbourne in the (employment omitted) field.  She has always worked in (employment omitted) and will get work.  She said she still supported the children in various ways.  She paid for their mobiles and supervised Mr L’s 120 hours learner’s driving.  She has paid for [X]’s (hobbies omitted).  (It emerged that she transferred $30 to [X].)  She had paid $400 for [X]’s (hobby) lessons.

2. Under cross-examination, the wife admitted that she had a small income from (business omitted).  It is a referral-based activity.  Her previous self‑employed business in (business omitted) earned her up to $70,000.  She was the third-top earner in that company.  She will try and work when she returns to Australia.  The husband will never work but has his TAC income.  The husband requires carers (and the wife gave details of the extensive caring available to the husband).  He has a carer for five days a week, a cleaner, physiotherapy and support people in the neighbourhood.  The husband spent 13 months in hospital and she cared for him constantly until separation.  She was paid after a while.  She told the husband she wanted to separate.  She wanted to live on her own but still to be his carer.  She wanted to be in the house for the children.  She was not with Mr A at that stage.  His name was never mentioned.  An IVO was made against Mr A in mid-December 2016 but the conversation with the husband was in October 2016.  She was friends with Mr A at that time but their relationship started in early December.  She has known Mr A since she was 18 but they reconnected at the start of 2016.  She thought the husband was foolish not to keep her as a carer and he was not treating her well.  She removed $25,000 from the mortgage at separation.

3. She travelled to (country omitted) with Mr A for 10 days and then has lived in (country omitted) since 2017 with him.  She has to come back to Australia every 60 days for visa requirements.  Airfares vary between $300 return to $1000 one-way.  The children have been taken to (country omitted) three times. 

4. Mr L will soon be 18 and is an apprentice (occupation omitted).  Both he and [X] live with the father.  He is not paid any child support.  [X] has visited (country omitted) for periods of a month each time.

5. The mother was cross-examined about her address in her Financial Statements and conceded it was wrong because it did not show an address in (country omitted). 

6. The wife confirmed that the rental properties were in her name alone.  The mortgage is a known deficit.  She received Family Tax Benefits until May 2017 but she said she told Centrelink to stop paying her.  She conceded receiving a tax refund of $6000 on 8 December 2017. 

7. The wife was cross-examined about her Bank records which were tendered as exhibit R1.  These appeared to show a credit balance in excess of $30,000 in her account in December 2017.  The wife said that the money went in and went out again quickly, but I should say that I did not find her evidence about this aspect of the matter very satisfactory.  Her answers struck me as being evasive. 

8. The wife was cross-examined about provision of documents but she said that the husband changed the locks on the family home and she had no access to files.  She had to get her sister to find out how much her superannuation amounted to. 

9. The wife conceded that the husband had received some $263,000 in total from the TAC.  She also conceded he obtained insurance in the sum of $50,000.  She agreed with the funding event raising in excess of $20,000 (she put the figure at $21,000 rather than $24,000).  She conceded that the husband sold a truck for $15,000 but did not dispute, although she could not recall, him withdrawing $26,000 from his superannuation.  She conceded that a trailer was sold.  She also conceded a $21,000 inheritance that the husband received from his aunt during the relationship.

10. The wife confirmed that when the units were bought, the entire purchase price was borrowed, secured against the family home and in her name alone.  Some $25,000 had been spent on renovations to the properties.  Her mother lives in Property B 1 and pays rent of $275 per week.  The tenant of the other property, Property B 2, pays $310. 

11. The wife conceded she had had two trips to the (country omitted).  She went to (country omitted) every three to four months for respite during the relationship.  She had undertaken cosmetic orthodontic work after separation.  She said she was never intending to live in (country omitted) indefinitely.  She has a lease for three years. 

12. The wife conceded the husband will never accumulate superannuation and that after 65, he would only have the aged pension.  She said in response to a question about this, “We’ll be in the same boat”.  I would interpolate again and say that this remark strikes me as being insensitive and lacking in insight. 

13. The wife conceded that $183,000 had been spent on modifications to the family home, funded by the TAC.  She said she had worked very hard to get the maximum benefits for the husband.  She said TAC would fund further modifications in the event that the husband had to buy another property.  She said that she had found a property the husband could move to but he was not interested.  She conceded that the matrimonial home has a swimming pool which the husband uses, but not very often.  She said she and the husband do not speak.  The children know she is coming back to Australia.  She has paid $10,000 in legal fees, approximately, from money she had taken from the house.  That was the only money she had, plus the sale of the Motor Vehicle 2 for $21,000. 

14. The wife was challenged about the balance of $5000 in her account but she said this was now down to $3000.  She said the husband had said he would move to the country or interstate if he had to vacate the matrimonial home.

The evidence of the husband

1. In evidence-in-chief, the husband adopted his affidavits as true and correct.  He confirmed that his TAC payments will continue until he is 65, when he will receive the aged pension.  He wishes to stay in the matrimonial home if possible.  He uses the pool in the summer as it is his only relief from the pain.  He said he had recently borrowed funds.  He had, however, sold his Motor Vehicle 1.  His borrowings include $10,000 from somebody identified as Ms F, $10,000 of a personal loan and $5000 from his parents.  He has paid $10,000 to his solicitors and had paid for repairs to a hot water service. 

2. Under cross-examination, which was commendably succinct, the husband confirmed that he had discussed his options as to accommodation with TAC.  He has spoken about a house in Suburb A about eight months ago which would require alteration for him to be able to live in it. 

Credit of the witnesses

1. Given the brevity of cross-examination of the husband, it was not possible to form much of an impression, save, obviously, that it is implicit in the brevity of cross-examination that the husband’s credit is not significantly in issue. 

2. I have already detailed one or two occasions in respect of which I find the wife’s evidence unsatisfactory, but I should make it plain that, in the main, I thought she was a witness of truth.  Her answers were, generally, direct and responsive.

Stanford & Stanford (2012) 247 CLR 108

1. The Court’s first task is to ascertain the legal and equitable interests of the parties and determine whether a property adjustment is appropriate.  As in so many cases, however, and, indeed, as was foreshadowed in the decision of the High Court in Stanford, the basis upon which the parties conducted their financial affairs as a couple has now radically altered and both parties seek an adjustment.  It is plainly just and equitable that there be one.

The pool

1. The parties agree the following matters:

   a)Value of matrimonial home at $785,00

   b)Property B1, $360,000

   c)Property B2, $375,000

   d)Mortgage on matrimonial home, $217,000

   e)Mortgage on Property B1, $260,000

   f)Mortgage on Property B2, $346,000.

2. I note that the husband’s modified Motor Vehicle 3 is allotted a value of $25,000 in his case outline and I will take that as a concession against interest as to its value.  Realistically, however, in truth, it just represents a vehicle that transports him from A to B.  It is to be presumed, given its modification, that he will drive it as long as he safely can, given his absence of funds. 

3. In my view, bearing in mind there is no valuation of any of the vehicles the parties may still possess (and the very small proportion of the pool they would represent in any event), they should be excluded from the pool. It should be noted that I accept the husband’s evidence that the Motor Vehicle 1 was sold for $10,000 and this has been applied to repay loans already incurred.

4. The husband submits that the Court should re-include the $25,000 taken by the wife at separation and the proceeds of the sale of her Motor Vehicle 2 in the sum of $21,000.  The husband also seeks to include the mother’s savings of $32,000. 

5. The wife seeks the exclusion of these moneys. 

6. In my view, the $25,000 taken at the termination of the relationship and the $21,000 for the Motor Vehicle 2 should be included.  They were assets of the relationship at its termination and the Court is doing its best to approach the pool on the footing that is constituted by what was then owned.  The $32,000 referred to in paragraph 20 is clearly, in my view, to the extent that it may still subsist at all, the residue of those funds.  I accept the wife’s evidence in this regard. 

1. To include the $32,000 would be to double-dip in favour of the husband. 

2. There is no evidence as to the value of any of the parties’ chattels and I will not include them.

3. The wife has $20,000 in superannuation and the husband, as indicated, has none. The wife’s superannuation must have been largely earned during the marriage and it is appropriate to include it in the pool.

4. Thus the nett value of the pool is $745,000.

Contributions

1. These parties were together for an extensive period of time.  They started cohabitation in 1998 and married in 2000, by which time their first child was already born.  They did not finally separate until November of 2016.  On any view, this was not a short marriage. 

2. The wife worked all the time she was not acting solely as a homemaker and mother.  The husband provided the initial financial asset from which the purchase of the matrimonial home eventually sprung.  The husband received a modest inheritance and has also received considerable amounts by way of superannuation, life insurance and statutory benefits. 

3. The position in respect of the former matrimonial home is somewhat curious.  It has been the subject of very substantial expenditure by the TAC of approximately $180,000, but both parties agree that this has reduced rather than increased the value of the property.  It seems that in the event that the husband is forced to move properties, TAC is likely to give him further assistance in modifying whichever property he might ultimately own. 

4. While the husband deserves nothing but sympathy for the sequelae to his accident, the fact is that I accept that the wife fought long and hard on his behalf with the TAC to maximise his benefits and that she looked after him devotedly until separation, subject to the occasional visits to (country omitted) which are properly regarded as respite.  Her duties as a carer must have been onerous. 

5. Bearing in mind all of these considerations, and, most particularly, bearing in mind the substantial funds received by the husband following his injury, notwithstanding any reduction in value of the property, in my view it is appropriate to assess the contributions of the parties 60/40 in the husband’s favour.  It was his original property that provided a substantial amount of the springboard for the purchase of the matrimonial home, and although there is no precise arithmetic before the Court, it seems clear beyond doubt that a not inconsiderable amount of the various payments he received following his injury were contributed to reducing the mortgage on the matrimonial home and otherwise applied to the benefit of the family.

Future needs

1. The wife has told the Court that she will return to Australia.  Notwithstanding that that was not the position of her partner, Mr A, in the other proceedings, this evidence was given with conviction and I accept it.  I also accept that she will obtain work in (employment omitted) when she returns.  She was skilled in (employment omitted) and her confidence in this regard strikes me as being likely to be upheld.  She will earn an income, and if it is anything like commensurate with her income when she was working previously, it will be relatively substantial. 

2. Additionally, she is in a relationship which has now subsisted for some time with Mr A.  She will have the support of Mr A in their joint affairs it would seem, at least for the foreseeable future. 

3. The wife is in good health and it is correct to say, as counsel for the husband does, that she has some 20 or so years work available to her.  She will accrue superannuation, whereas the husband has none and will never accrue any more. 

4. The husband also, to an extent, has the two children in his care, but given their age and his disability, this is, perhaps, not a matter of such moment as it otherwise would be.  In my view, a further 15 per cent adjustment for future needs is, in all the circumstances, an appropriate one. 

Conclusion

1. The value of the net pool as mentioned earlier is $745,000. 75 percent of that figure is $558,750. The net equity in the former matrimonial home is $568,000.

2. If the husband retains the matrimonial home and mortgage, he will be receiving almost 74 percent of the matrimonial pool. While the wife will be receiving two properties, their current net equity is of the order of $129,000. In my view, orders vesting the matrimonial home and mortgage in the husband, and the other properties in the wife, with the wife as it were retaining the $46,000 she extracted and her superannuation is indeed a just and equitable outcome in this case. It is a practical one. It gives the husband a very good chance to keep the home in which he lives which in my view is a very desirable outcome in the circumstances. I have drawn draft orders to give effect these conclusions and will hear further from the parties before they are made final. 

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 10 August 2018