Vrbetic, R. and Vrbetic, T.L.G.

[1987] FamCA 10

In the marriage of VRBETIC, R. and VRBETIC, T.L.G.

(1987) FLC ¶91-832

Full Court of the Family Court of Australia at Sydney.

Judgment delivered 6 May 1987.

Before: Evatt C.J., Ellis and Nygh JJ.

Evatt C.J.: This is an appeal against the decision and order of Mr Justice Burton made on 13 November 1986 and it concerns the property of the parties. The circumstances and history of the parties' marriage are set out in his Honour's reasons for judgment and are not challenged in any way. The parties were married in April 1980. Both had been married previously. The marriage was of short duration, as the parties separated in October 1982, and a decree nisi was granted in January 1984. The question at issue before his Honour was the appropriate division of the former matrimonial home which his Honour found to have a value of $125,000. That is the gross value, and the net value was some $85,000.

The order that his Honour made was that the property be sold and that from the net proceeds of sale the wife receive 75 per cent and the husband 25 per cent. The husband has appealed against this order.

There are a number of grounds for appeal. I will deal with each of them in turn. The first concerns the valuation and the ground that his Honour, having accepted the evidence of the valuer Chambers, erred in fixing the value of the former matrimonial home at $125,000. I think the first comment to make is that his Honour did not accept the evidence of the valuer Chambers in an unqualified manner, but only in a qualified manner, and that appears from the judgment.

Various matters were put to us by the appellant, that, it is said, should have led his Honour to accept absolutely Mr Chambers' evidence in preference to that of the valuer Hillier. I think the short way of dealing with this is simply to say that his Honour looked at the evidence of each valuer. He was not fully satisfied with the evidence of either valuer. He made observations in this regard in his judgment, and having considered the evidence of each, both the written evidence and oral evidence, he did what he was perfectly entitled to do, that is to say, to fix a value which was between the values of the different witnesses, but a value which he arrived at, having regard to the qualifications which he put on the evidence of each valuer. The ground is, therefore, not made out.

The second ground is that his Honour erred in failing to allow the husband the benefit of the appreciation in value of the land owned by him prior to the marriage and on which the home was erected, and therefore failed to allow the husband the full benefit of his direct contributions towards the acquisition of the property. There are difficulties that arise from this ground, and they are these: that at the time of the marriage the husband owned a block of land which he had purchased for approximately $14,100 in 1977. He owed $3,400 at the time of the marriage, but there is no evidence of the value of the property at that time.

There is evidence that the land now has a value of $40,000. It is not really disputed that at or after the marriage the balance owing on the land was paid off by the wife. She, at the time of the marriage, owned a property at Villawood which was sold in November 1980 for $58,000. It was unencumbered and virtually all the funds arising from the sale of that home went towards the erection of a property on the land which had been owned by the husband, but which was put into joint names after the marriage.

The difficulty is to compare in a meaningful way the respective contributions of the parties. What the appellant is seeking to do is to separate out the land itself as a separate and independent type of contribution in a way distinct from its value at the time of marriage, or distinct from the actual cash that the husband had put towards it at the time of marriage.

It is true that at the present time the value of the land is $40,000, and of that value the husband had initially contributed $11,000 out of the $14,000 purchase price. But it would not be fair to the respondent to treat the land as in some way different from any other contribution which these parties made. The only way that one can compare it is to see what each of them had at the beginning and what each of them has now at the end of the marriage or what they would have had had they not married.

It is clear that at the time of the marriage the husband had an asset to which he had contributed $11,000 and the wife had an asset worth $58,000. One cannot just separate the land out and say that of the present value of the property, the husband contributed the better part of something worth $40,000. That I think is where the difficulty lies for the husband in his approach to this case. Had the parties not married it may well be that the husband would now have land worth $40,000 to which he himself had contributed certainly by now the whole purchase price and in any event the greater part of the purchase price.

The wife, of course, if the marriage had not occurred might now have a house property, which in present-day values would obviously be considerably more than the value of $58,000 which her property had at the time of the marriage. One cannot help feeling that the proportions that his Honour has arrived at in his order do bear some relationship to what each party was able to put into the marriage at the beginning, and do bear some relationship to what they might now have had had the parties not married, that being a relevant consideration in my view in a marriage which lasted such a short time.

Turning to the next ground of appeal which is in some ways related to the previous ground, that is that his Honour failed to allow the husband full credit for the substantial payments made by the husband to the St George Building Society and the Custom Credit Corporation. The parties separated in October 1982 and since that time the husband continued to reside in the matrimonial home. It is not disputed that during that period he made payments to Custom Credit and to the St George Building Society.

The loan to the St George Building Society was during that period reduced from about $40,000 to something over $36,000. The loan to Custom Credit which was in April 1982 $8,000 was reduced during the period in question to about $3,500. It is not disputed that the husband paid these sums, and that he, therefore, contributed directly to the increase in capital value to the parties by some $8,000.

As against that, of course, he had the use of the property. He was residing in it. There is no evidence as to the value to him of that occupation, though clearly the house provided more accommodation than he needed. The fact is that he has contributed since separation, as I said, something like $8,000 to the capital value. But again, this has to be compared with the amount which the wife put in.

The problem that these two parties encountered in relation to their matrimonial home was that the net value to them at the end of the affair was considerably less than what they actually put in due to over-capitalisation in relation to the site.

The fact is that despite the considerable contribution by the wife and the husband in connection with the land the net value to them at the end of it all was only $85,000, for reasons which were gone into by the valuers. So that in a sense it has to be accepted that each of these parties has contributed considerably more than the net worth to them, of what has resulted from these contributions. The loss of this is something which in my view has to be shared between them in a meaningful way.

It is true that the husband has contributed to the maintenance of the property and to reducing the loan. But in my view the effect of that contribution has to be considered in relation to what each of them brought in at the beginning. It is true it occurred some years later, but the value of the cash assets which the husband brought into this marriage in terms of purchase of the land and the later reduction of the mortgage and those of the wife, when compared, still leave the wife having contributed considerably more; that indeed was his Honour's finding — that the wife had contributed far in excess of the husband.

I think that the finding really cannot be challenged when one looks at the circumstances of what each party brought into the marriage.

Similar comments can be made I think in relation to the ground number 4, that his Honour erred in failing to allow the husband credit for his substantial physical labours. This was a factor which his Honour did consider. It is mentioned in his judgment, and I do not think that that ground alone is justified on the basis of submissions made to us.

The final ground is that his Honour erred in properly taking into account the substantial damages and compensation received by the wife as a result of injuries which she received in the course of employment during the marriage. I think that ground can be treated quite briefly. The wife did receive compensation and there is no evidence that this was received by her other than to compensate her for her loss of earnings and pain and suffering arising from the injuries she received.

She was not, I think, employed at the time of the hearing. It is not known whether she would ever resume employment. But this has to be set against the fact that the husband himself is in employment. He has an income from that and he has superannuation entitlement, which though not great at present, may bring him some security in the future. The fact is that this question of compensation can only be considered in relation to sec. 75(2) and there is really no evidence of greater need on the part of the husband, than on the part of the wife. There is really nothing in the material to suggest that the share of the husband, based on his contributions to the property, should be in any way increased because of factors arising under sec. 75(2). What I am saying, in effect, is that in the circumstances of this present case, bearing in mind that it is a short marriage, the question of compensation really proves to be an irrelevant consideration in regard to the property of the parties.

So that the general conclusion that I come to in the matter is that the grounds of appeal have not been made out. It has not been shown that the result arrived at by his Honour was outside the proper exercise of his discretion, bearing in mind the relationship between the net value of the property at the end of the marriage and the original contributions. There is no error in the exercise of discretion. The appeal must be dismissed.

Ellis J.: I also agree that the appeal should be dismissed for the reasons given by the Chief Judge. There is nothing further I wish to add.

Nygh J.: I also agree that the appeal should be dismissed for the reasons given by the learned Chief Judge.

Evatt C.J.: The order will be that the appeal is dismissed.