W and S
[2002] FMCAfam 108
•24 April 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| W & S | [2002] FMCAfam 108 |
| PROPERTY SETTLEMENT – Contributions of parties – effect of one party’s superior initial financial contribution – marriage of short duration. |
| Applicant: | M B W |
| Respondent: | D M S |
| File No: | ZD 2177 of 2001 |
| Delivered on: | 24 April 2002 |
| Delivered at: | Adelaide |
| Hearing Date: | 11 April 2002 |
| Judgment of: | Brown FM |
REPRESENTATION
| Counsel for the Applicant: | Ms J Sivyer |
| Solicitors for the Applicant: | Sivyer & Associates |
| Counsel for the Respondent: | Mr B Cassells |
| Solicitors for the Respondent: | Terrill & Associates |
ORDERS
That the Husband, in exchange for payment to him by the Wife of $34,420.00, within 45 days from the date hereof transfer to the Wife all his right, title and interest in and to the real property situated at
9 S Drive, M L in the Northern Territory of Australia, being Lot 4024 Town of Palmerston and being the whole of the land contained in Certificate of Title Volume 552 Folio 140.That upon transfer to the Wife as aforesaid the Wife:
(a)use her best endeavours to obtain the discharge of the Husband from any and all liability under the mortgage secured over the said property;
(b)indemnify and keep indemnified the Husband against any and all liability under the aforesaid mortgage.
That the Wife forthwith do all necessary acts and things and sign all necessary documents to transfer to the Husband all her right title and interest in the 1986 HJ Toyota Landcruiser currently at the premises of her parents Mr B and Mrs D S to the Husband.
That each party be solely entitled, to the exclusion of the other, of all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders.
That each party forego all claims he or she may have to any superannuation or work related benefits belonging to or earned by the other.
That in default of payment to the Husband in accordance with Order (1) hereof, the aforesaid property be forthwith listed for sale by private treaty for a period of three months, and sold for the best price obtainable during that period but not being less than the sum of $192,500.00.
That upon settlement of the sale of the aforesaid real property the Wife pay to the Husband the sum of $34,420.00 plus or minus 35% of the difference between the net proceeds of sale and the current net value, namely $114,500.00.
The parties have liberty to apply on giving 14 days notice in writing to the other party in relation to the sale of the property.
All applications are otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
ZD 2177 of 2001
| M B W |
Applicant
And
| D M S |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties seek a determination as to the division of matrimonial property. The parties to the proceedings are M B W (the husband) and D M S (the wife).
The husband filed an application in Form 3 on 17 April 2001. In his application he seeks the following orders:
1)“That the property located at 7 S Drive, M L in the Northern Territory of Australia being all of the land contained in Certificate of Title Volume 52 Folio 140, being Lot 4024 Town of Palmerston be sold on the following terms and conditions:
i)that the listing price for the above property be as agreed between the parties and failing agreement as advised by a valuer nominated by the President of the Real Estate Institute of the Northern Territory;
ii)in the event that the above listed real property has not been sold by private treaty on or before a date four (4) months from date of Orders then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and pay all such monies necessary to procure a sale by public auction of the real property upon the following terms:
a.the auctioneer shall be as agreed between the parties and failing agreement as nominated by the President of the Real Estate Institute of the Northern Territory;
b.the auction shall take place by two (2) months after the deadline date for sale by private treaty;
c.the reserve price shall unless agreed upon by the parties be as proposed by the auctioneer;
d.the auction expenses and any necessary expenses to prepare the property for sale shall be shared equally by the parties;
e.in the event that the property is not sold by auction or by private treaty negotiations within 14 days of the said auction the husband and the wife shall do all acts and sign all necessary documents and pay all monies necessary to produce a second auction within five (5) weeks of that date otherwise upon the same terms and conditions applied to the first auction.
iii)Upon completion of the sale of private treaty or by auction the proceeds of the sale shall be applied as follows:
a.Firstly to pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the real property;
b.To discharge all registered mortgages;
c.To pay the balance in equal shares to the parties.
2)That the husband transfer to the wife all his right title and interest in the 1986 HJ Landcruiser motor vehicle currently in the wife’s possession and the wife indemnify the husband in relation to all liabilities attached to the said vehicle.
3)That unless otherwise specified in these orders and except for the purpose of enforcing the payment of money due under these or any subsequent orders:
i)Each party shall be entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of this order and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements;
ii)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.
On 26 June 2001 the wife filed her response in Form 3A. In that application the wife seeks the following orders:
1)That the husband transfer to the wife all his right title and interest in the real estate situate and known as 7 S Drive, M L in the Northern Territory and that the wife indemnify the husband in relation to all payments due under the registered mortgage.
2)That the wife within 28 days hereof pay to the husband such sum as is deemed fair and equitable by this Honourable Court.
History of the parties
The husband was born on 7 March 1963 and is currently thirty-nine years of age. By occupation he is an electrical contractor. The wife was born on 28 March 1973 and is currently twenty-nine years of age. By occupation she is an office administrator. The parties first met in Darwin in either late 1994 or April of 1995. There is a dispute between them as to the precise date on which they began to cohabit, however it is common ground that they were married at Darwin in the Northern Territory on 29 May 1999. It is also common ground between the parties that they separated under the one roof at the former matrimonial home situated at 7 S Drive, M L in either late January or early February of 2001. The husband moved out of this property in June of 2001 and since this date the wife has lived there alone.
A decree nisi was pronounced in respect of the marriage between the parties on 15 April 2002. There are no children of the marriage. During the entire period of the marriage the parties lived in Darwin.
Principles to be applied
Section 79 of the Family Law Act defines the Court’s powers in determining applications for property settlement. Sub-section 2 of Section 79 provides that:
“The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
Section 79(4) sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
i)The financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
ii)The contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
iii)The effect of any proposed order upon the earning capacity of either party;
iv)The matters referred to in sub-section 75(2) as far as they are relevant;
v)Any other order made under the Family Law Act affecting a party to the marriage or a child of the marriage; and
vi)Any child support payable.
Section 75(2) of the Family Law Act sets out the matters which must be taken into account by the Court when determining applications with respect to maintenance. This is the prospective element of the determination of the application for property settlement. The assessment of contributions during the marriage is the retrospective element.
In the Marriage of Ferraro 16 Fam LR 1 the Full Court said at page 23:
“A now well established line of authority in this Court indicates the approach normally to be taken in the exercise of the discretion in Section 79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider “contributions” of the parties within paragraphs (a) – (c) of Section 79(4) and then consider the matters in paragraphs (d) – (g), more especially paragraph (e) which takes up by reference the provisions of Section 75(2) which are generally referred to as the “Section 75 Factors.”
The Court is therefore required to determine the following matters:
i)The assets, liabilities and financial resources of the parties to the marriage;
ii)The relevant contributions of each of the parties;
iii)The means and needs of each of the parties and the other prospective components to the claims of each of the parties pursuant to section 75(2) and then to identify if any alteration should be made to the entitlements of either of the parties having regard to the Section 75(2) factors;
iv)After determining the entitlement of each of the parties in relation to the alteration of property interests, the Court must then consider any application for spousal maintenance if relevant.
Evidence
The major asset of matrimonial property available for distribution between the parties is the former matrimonial home situate at
7 S Drive, M L. Although both the husband and wife had each obtained two separate valuations in respect of this property, which ascribed various values to the property ranging from $158,000.00 to $229,000.00, the parties were able to agree as between themselves, for the purpose of these proceedings, that this property was currently valued at $192,500.00 and was subject to a mortgage in favour of the Westpac Bank in the sum of $78,000.00. This property is registered in the joint names of the parties.
The husband relied on the following affidavits filed on his behalf:
i)Of himself filed on 26 March 2002;
ii)A statement of his financial circumstances filed on 26 March 2002;
iii)Of a builder A G M filed on 27 March 2002.
The wife relied on the following affidavits filed on her behalf:
i)Of herself filed on 8 April 2002;
ii)A statement of her financial circumstances filed on 8 April 2002;
iii)Of her father B J R S filed on 8 April 2002;
iv)Of her mother D D S filed on 8 April 2002.
The parties were each represented by counsel at the hearing before me on 11 April 2002. Each party gave viva voce evidence in support of their respective cases and each was cross-examined by counsel for the opposing party. In addition Mr M was cross-examined by counsel for the wife and Mr S was cross-examined by counsel for the husband. No other witnesses were called.
In a general sense, I found each of the witnesses to be a truthful witness. One thing however that was immediately apparent to me was that there is a high level of mistrust and conflict between the parties and that the breakdown of their marriage was an extraordinarily acrimonious one. Each of them made little, if any attempt, to disguise the antipathy they felt for their former spouse. For example, the wife found it very difficult to say anything of a positive nature concerning the husband’s contributions during the marriage. When questioned about such matters, she would very often answer with the one-word answer “possibly”. I took this as her affirmation to the various propositions that were being put to her and assume that this is the closest she is able, at this stage, to express anything of a positive nature concerning the contribution of the husband to the marriage.
This was a comparatively short marriage and as a result has resulted in the acquisition of few assets by the parties. Although I believe both the husband and the wife are essentially truthful witnesses, they do have very different recollections as to what occurred during the early portion of their relationship prior to their marriage. In particular, they have a fundamental disagreement as to when they began to live together in a marriage type relationship. They also have some disagreement about the roles each of them performed during the marriage in their domestic setting. I do not think these differences in their evidence was as a result of any disingenuous on either of their parts, but rather flowed from their different perspective as to what was important at the time and their subsequent reconstruction of events in the light of the dispute between them. The issue of pre-marriage contribution is the most significant area of dispute between the parties and as a result it will be necessary for the Court to make findings of fact in regards to this issue. This issue, to a certain extent, hinges on the finding of the Court as to the exact time the parties began their domicile together as man and wife.
a) Contributions prior to marriage
It is clear that pre-marriage contributions may be taken into account as contributions under section 79 of the Family Law Act, regardless of whether the parties were cohabiting or not, provided the parties subsequently marry and the matters have sufficient relevant connection with the marriage.
The husband believes he first met the wife at the Italian Club in Darwin in late 1994. The wife asserts that they met through ballroom dancing in April of 1995. Nothing turns on this difference of recollection. It seems however reasonably clear that the parties became romantically involved with one another in April of 1995. It was at this time that they began ballroom dancing together. The husband asserts that soon after this the wife began to live with him in a flat he was then renting at 1/34 K Crescent in N. It is the wife’s position that she and the husband did not actually begin to live together until some eight months later in January of 1996. She says that in the intervening period between April of 1995 and January of 1996 she lived predominantly with her parents, initially at their home at F Drive, L and when they moved in June of 1995 at their home in M L. She does however concede that she spent Wednesday nights at the husband’s flat during this period because this was their ballroom dancing night and also slept over on Friday and Saturday nights.
The significance of the dispute arising between the parties as the date of the commencement their relationship relates to the initial value of the contribution of the wife towards the most significant item of matrimonial property, namely the former matrimonial home situated at 7 S Drive, M L.
The vacant land on which the home was subsequently erected was purchased by the wife and her mother, Mrs D S in December of 1992, obviously well before the wife had met the husband. The property was purchased by the wife and Mrs S at this time for the sum of $55,000.00. They were registered as tenants in common on the relevant certificate of title. The wife asserts that she borrowed the sum of $5,000.00 from her mother to pay a significant proportion of the deposit required. She borrowed the balance of the funds necessary to complete the purchase from the Westpac Bank. In order for the wife to obtain the necessary funds the Bank required Mrs S to be registered on the title. Stamp duty was assessed on the transfer and apart from the loan from her mother and a small injection of cash from herself the funds for the purchase were borrowed from the Westpac Bank.
The wife strove to pay off the mortgage as quickly as she could. She was in full time employment as a bookkeeper and received a modest wage of about $19,000.00 per annum. However as she was living with her parents her living expenses were small as she was not required to pay board. Accordingly she was able to make payments towards the mortgage in the sum of $255.00 per week. As a result she made rapid inroads into the amount owing on the mortgage.
The significance of the difference between the husband and wife regarding their belief as to the commencement date of their cohabitation becomes relevant when the amount of money owing at the two competing dates is compared. On 27 April 1995 an amount of $22,481.85 was owing to the Westpac Bank. On 5 January 1996 the amount was $14,389.85, a difference of $8,092.00. It is the husband’s position that he and the wife were cohabiting during this period and that too a very large degree he supported the wife during this period by way of payment of the rent on his flat, which she was sharing with him and by way of payment of expenses such as electricity and telephone and the purchase of the majority of the groceries they jointly consumed. As a result he asserts that he subsidised the wife’s ability to pay the mortgage during this period and that he should be given some credit for it in respect of the ultimate division of the parties’ matrimonial property.
The wife denies that this is the position and in support of her case called evidence from her father and mother, Mr B and Mrs D S. Perhaps understandably they support their daughter in the attribution of January of 1996 as the commencement date for cohabitation between the parties. This being the time the parties returned from a holiday together in New South Wales during which they had visited the husband’s family. Both Mr and Mrs S deposed that they moved from their previous home in F Drive, L to their present home in M L, incidentally next door to the parties’ former matrimonial home, in early June of 1995 and at that time the wife moved with them. Accordingly they say they can M the time the wife began to live with the husband at his flat in N with some precision. Mrs S was not cross-examined in respect of this issue. Neither Mr S nor the wife resiled from their view that the wife began to live with the husband in January of 1996.
In support of his position that the parties began to live together in April of 1995, besides his assertion of the fact, the only evidence on which the husband relied was a photocopy of the first page of the wife’s income tax return for the year ending 30 June 1995. This gives as the wife’s address, the husband’s flat in N. In my view this is not of itself particularly compelling evidence. The document does not disclose when the income tax return was filed with the Tax Office. The wife asserts that the return was filed at some stage in 1996, by which time she was living with the husband.
In this day and age, it can be notoriously difficult to attribute with any degree of certainty the exact date on which cohabitation begins between parties who at some stage in the future will become husband and wife. Life does not always impose such clear points of demarcation as those imposed by the celebration of marriage. It seems to me that between April of 1995 and January of 1996 the parties were involved in a serious and intimate romantic relationship. They spent a considerable amount of time together, including on the wife’s version of events, up to three nights per week. Mr S said that at this stage the husband was “the only man” in the wife’s life. It seems to me that the wife moved freely between her parents’ home and the home of her new boyfriend. Certainly there was no impediment in either household to this occurring. Her parents had no moral objection and I have no doubt that the husband was delighted to welcome her whenever she cared to stay. This after all is the nature of love. It is only afterwards, as in this case that the consequences of such arrangements are considered.
Given this state of affairs there seems to me to be a certain amount of artificiality in attributing any nominal starting date to the relationship. Further it seems to me that between April of 1995 and January of 1996 both the husband and Mr and Mrs S were subsidising the wife in respect of the purchase of the property at 7 S Drive, M L too a large degree in the sense that she did not have large living expenses as a result of staying at either location.
However on balance, I believe that it is more likely than not that the husband and wife began to live together, in the sense that the wife no longer spent regular periods overnight at her parents’ home and regarded the husband’s flat as her permanent home rather than as a place she regularly visited, in early January of 1996. Accordingly I find that this is the date on which the parties began their cohabitation. However, for the reasons already stated, I consider that the husband began to make some modest indirect contribution towards the acquisition of the property that would ultimately become their joint matrimonial home prior to this date.
b) Property at commencement of cohabitation
It is now necessary to consider the property that each party had at the commencement of cohabitation. At this time the husband had modest assets. He owned the furnishings and contents of his flat. He attributes a value to these items of $4,000.00. However the parties have divided the furniture and such similar items between them following their separation and accordingly these are matters of no great moment in the ultimate disposition of this matter. He had plant and tools associated with his business as an electrical contractor. This business he continues to carry on under the name of I E. He is the sole operator of the business. He values these items at $5,000.00. The wife has made no claim in respect of either the business or the plant associated with it. He had a Nissan Patrol utility, which he used as his work vehicle. This he values at approximately $15,000.00. I am unclear as to what ultimately happened to this vehicle. He also owned a caravan and a Kingswood station wagon valued at $1,000.00. The husband had a modest entitlement to superannuation at this time of around $1,000.00.
Besides her interest in the land at S Drive, M L the wife also had modest assets. She owned a Gemini motor vehicle valued at $2,000.00 and had some savings and items of furniture.
It is the wife’s position that her interest in the M L property constitutes a major contribution to the assets of the parties that are currently available for distribution between them. As has already been indicated at the time the parties began to live together an amount of $14,398.85 was still owed in respect of the mortgage to the Westpac Bank. It seems that this amount was paid off in full by October of 1997. Once the parties began to live together the wife continued to pay off the mortgage at the rate of $255.00 per week. She was receiving a net salary of around $321.00 from her employment as a bookkeeper at the time. It is the husband’s position that he continued to pay the majority of joint living expenses to enable the wife to pay off the mortgage as quickly as possible.
At around this time, October of 1997 the parties decided that they would marry. As a result it was decided that the property at M L would be transferred from being held as tenants in common by the wife and Mrs S to a joint tenancy in the names of the parties.
The wife asserts that the property was worth considerably more than its initial purchase price of $55,000.00 by this time. The title search in respect of the property reveals that as at 1 July 1996 the unimproved capital of the property was said to be $79,500.00. This is a value as assessed by the Valuer General for rating purposes.
The title in respect of the property was formally transferred from Mrs S and the wife on the one hand to the husband and wife as joint tenants on the other on 10 October 1997. This necessitated the transfer being assessed for stamp duty, at which stage the value of the interest transferred to Mr W was nominated by the parties as being $50,000.00 and the value of the property as a whole as being $100,000.00. The wife relies on this as further evidence of the superior quantum of her contribution towards the acquisition of the matrimonial assets.
In middle to late 1996 and early 1997 the wife attempted to sell the property at M L for at that stage the parties had decided that they did not want to live there. Only one prospective purchaser made an offer in respect of the property. This was an offer of $75,000.00, which was subsequently raised, to $80,000.00 in early 1997. However the offer was not accepted.
It is, in my view, not possible for the Court to ascribe a value to the property with any degree of certainty as at the date that the parties began their cohabitation in January of 1996. I do not believe that it is appropriate for me to rely on the unimproved capital value of the land or on the value ascribed to it for stamp duty for this purpose. I was not provided with any methodology as to how the valuer-general reached his figure or indeed whether he or one of his agents actually visited the property to come to the valuation. The process of how the valuer-general reached the valuation is a matter clouded in mystery. Similarly the fact that that the parties attributed a value to the property for the purposes of stamp duty and this value was accepted by the Commissioner for Taxes is not in my view ipso facto proof that the valuation is in fact correct. Nor do I think it appropriate to ascribe a value to the land based on the offer to purchase. To my mind this is too uncertain and nebulous a manner to ascertain the value of the property. I do not know if the offer was made in writing or led to any firm commitment to purchase by the prospective buyer. No evidence was provided in this regard at all. At any event the offer did not lead to the exchange of contracts or anything of that nature.
However on any view the wife’s contribution of the land at M L constitutes a substantially greater initial contribution to the marital assets than that provided by the husband. Given the comparatively short duration of the marriage between the parties this is a most significant matter when a determination is made as to the ultimate division of the parties’ property. At the least it amounts to a sum of $40,601.15. Though to my mind some slight allowance should be made for some indirect contributions made by the husband in the months prior to the exclusive cohabitation of the parties in January of 1996, when the contribution of the parties is assessed in percentage terms against the pool of matrimonial assets available for distribution. For reasons that will be provided subsequently this is, I believe the appropriate approach to the matter rather than an asset by asset approach as urged by counsel for the wife.
Mrs S did not seek to be repaid the sum of $5,000.00 when her name was removed from the title on its transfer to the husband and wife in October of 1997. The wife claims that she continues to be indebted to her mother in this sum. There has been no evidence provided either as to any formal agreement to this effect or any evidence that any demands have been made by Mrs S in respect of this debt. In such circumstances it seems to me unlikely that the loan will be required to be paid back.
The wife and her father assert that there is a further sum of $2,500.00 owing by the wife to her father in respect of 50 mango trees that he planted on the property at M L. This occurred at some unspecified time after the property had been purchased. Mr S asserts that the cost of each tree was $50.00. In cross-examination he conceded that the cost of each tree was in fact $20.00 but he attributed the additional $30.00 to the cost of soil treatment and the drilling of holes for the trees. To my mind the sum seems inflated, certainly there is no documentary evidence in respect of the exact amount of money expended and there has been no demand for its repayment. Mr S has deposed that the wife is to repay the sum to him when she is able to. I doubt that in reality the sum will ever be called for. In my view the appropriate means to deal with the issue of the mango trees planted on the property is to regard them as a contribution made on behalf of the wife to the improvement of the property.
c) Contributions during the relationship and subsequent marriage
As has already been indicated, the parties choose not to proceed with the sale of 7 S Drive, M L. Instead they decided to build a home on the property, in which they would live. In order to construct this dwelling they borrowed the sum of $80,000.00 from the Westpac Bank, which sum was secured by way of a first mortgage registered on the property. It was for this reason that it was necessary for the husband to become registered as a joint proprietor of the land. As the Bank would not otherwise lend this sum to the wife alone. Construction began in late 1997 or early 1998. It was anticipated that the parties would live in the completed dwelling when they married.
The husband is an electrician by trade. However it seems that he also has some aptitude as a builder. Certainly, through his work he has acquired a number of contacts in the building industry in Darwin. It was agreed between the parties that a friend of the husband’s, Mr T M, who is a builder, would assist the husband in the construction of the shed by supervising the husband’s work on the site as well as doing some of the work himself that was beyond the capability of the husband to complete.
Of the $80,000.00 advanced by the Bank the sum of $20,000.00 was used to purchase a Toyota Landcruiser motor vehicle. The remaining monies were allocated to the construction costs of a shed on the property, which would combine living quarters for the parties and a workshop area from which the husband could conduct his business. The remaining sum of $60,000.00 was advanced to Mr M in periodic payments, which were used by Mr M to purchase building materials and to pay for other expenses related to the building of the shed.
Mr M gave evidence, which was not challenged, that he did not charge the parties any fee in respect of the work he did on the site. He estimated that his fee would have been $8,000.00 and $10,000.00 for the work done.
The wife in her evidence conceded that she does not know with any precision what was the extent of the work the husband did in erecting the shed on the property. She was employed on a full time basis as an office manager at a firm known as S B at the time. The parties continued to live at the husband’s flat in N. The wife says that she paid the mortgage payments as they fell due from her wages and paid for the bulk of the parties’ groceries. The husband paid the rent due on the flat. In my view, at this time the parties were pooling their resources. Although the wife was not concerned with the detail in respect of the construction of the shed there is no doubt that it was jointly agreed between the parties that the husband would contribute as much of his time and labour as possible to minimise construction costs.
It seems that the husband did some small jobs from time to time in the course of his electrical contracting business but increasingly his efforts were directed towards the construction of the shed. It seems that he, with Mr M’s assistance when it was necessary, was intimately involved with every aspect of construction. Due to his comparative lack of expertise the construction took longer than first anticipated. However it seems that the dwelling was finished too such an extent that the parties were able to live in it by the time they got married in May of 1999. Some additional work still needs to be done before the relevant authorities will issue a certificate of occupancy in respect of the dwelling. These works relate to glazing, plumbing and pest control.
The husband and Mr M set out the shed. The husband employed contractors to lay the concrete slab and erect the structural steel work and do the basic plumbing work. The husband with Mr M’s assistance laid the external purlins and cladding. He build the interior walls and did all the necessary electrical work.
As a result of contacts and friendships made within the building industry in Darwin, the husband was able to barter his services for work to be done on the dwelling. He got a friend to do the interior gyprocking of the shed in exchange for electrical work. He did a similar deal with other friends in respect of tiling and cabinetwork. The husband also painted the construction when it was finished.
The wife did some painting as well in the living area and helped with the installation of insulation batts. She also planted a lawn at the property. However in my view the husband’s contribution towards the construction of both the dwelling and the garden is markedly superior to that of the wife’s.
The wife concedes that the husband established the garden on the property and installed an irrigation system for it. In the husband’s case this involved the planting of some 680 native trees, shrubs and palms and the construction of rock walls and the digging of garden beds. The husband also fenced the property and spent the sum of $5,000.00 for fencing materials. These materials were purchased through his business.
The shed when completed was approximately 165 square metres in size. It consists of three bedrooms, living room and kitchen, bathroom and toilet. There is a mezzanine level and verandah of 60 square metres as well as an office and workshop area. Mr M estimated that if at the time he had been called upon to build a similar construction in his capacity as a builder that he would have provided a quote in the sum of approximately $107,000.00 for its construction.
Accordingly, on any view the labours and efforts of the husband towards the construction of the dwelling on the property have resulted in the parties saving a significant sum in respect of the construction costs. This is a significant matter.
During the construction phase and afterwards the wife paid the mortgage payments as they fell due. This amounted to the sum of $135.00 per week. When the parties began to live in the dwelling the husband paid for the fuel for their respective vehicles and for electricity and the telephone. The wife says she paid for the majority of the parties’ groceries and on balance this seems to be the case as the husband concedes that the wife did in fact purchase what he describes as a “substantial portion of the groceries”. This amounted to about $100.00 per week. It seems to me that the parties lived modestly and did not outlay any substantial sums for entertainment or to eat out. They seem to have spent the majority of their leisure time at home. It seems to me that each of them was focussed on completing the dwelling as quickly as possible and making as many improvements to the property as their financial position permitted.
During the 1998/99 financial year the wife’s taxable income was $39,000.00 and the husband’s was $28,997.00. The wife argues that it follows that she has made a greater financial contribution to the marriage. I do not think that this necessarily follows. The wife was a PAYE taxpayer. The husband was able to claim significant expenses that were incurred as a result of the couple’s living expenses through his business. These expenses included their weekly fuel expenses. At any event the husband was also at this time engaged in constructing the home and was not working too such a great degree as previously in his business. In cross-examination the wife was asked if she thought that the parties’ contributions towards their living expenses were reasonably equal. To which question she replied “possibly”. For reasons which I have already provided I take this to be an affirmation of the proposition put to the wife.
The husband in particular appears to have devoted a considerable amount of his time to working in the garden and around the house. The wife concedes that it was the husband who did the majority of the gardening.
The wife assisted the husband in doing the books for his electrical contracting business and assisting him to some degree in the managerial aspects of his business. She also transferred some sums of money to him to enable him to pay some of his trade bills. She deposes that these sums amounted to some $1,710.00.
The parties disagree to some extent regarding their performance of household duties during the course of their relationship. Both of them say that it was he or she who did the majority of the cooking. The husband says he did the majority of the cleaning. The wife says it was essentially shared, though when cross-examined she qualified this to the extent that she said she “did enough”. I do not think that a great deal turns on the question of contribution by the parties in respect of such domestic duties. Both parties were engaged in full time work during the marriage or, in the case of the husband, working on the construction of the home. I do not get the impression that either of them did an enormous amount of complicated cooking or cleaning. It seems to me that they were both very busy and that the necessary amount of cooking, cleaning and washing was done by both of them to maintain a comfortable state of life. I do not think that it can be said that one of them has performed an exemplary role in this regard, which as a result is markedly superior to the other.
Similarly in respect of the payment of their necessary living expenses, I do not think that it can be said that one of the parties assumed a markedly heavier burden than the other one. They divided these expenses between them on what seemed to them to be a workable basis at the time. In this regard it cannot be said that during the marriage one of them has been able to save a significant sum of money. What each of them has earned has been spent either on living expenses or construction expenses related to the construction of the shed. I also note that the mortgage in respect of 7 S Drive, M L has not been reduced by any appreciable degree. It currently stands at $78,000.00.
At some time in 2000 the husband purchased a 1995 Toyota Landcruiser for use in his work for the sum of $26,500.00. He borrowed this sum from AGC. He made the necessary repayments from his bank account. At the present time an amount of $17,000.00 is still owing in respect of the vehicle and it is valued at $18,000.00 by the husband, although no formal evidence in this regard was provided by him. No formal evidence was provided in respect of the precise amount owing to AGC in respect of this vehicle.
The husband also purchased a tractor and slasher for use on the block. These items were purchased through the husband’s business.
d) Matters relevant between separation and trial
The parties separated under the same roof at 7 S Drive, M L in either late January or early February of 2001. This separation seems to have been particularly acrimonious and difficult. For the purposes of this matter it is not necessary for the Court to make any findings in respect of various allegations of unpleasant and antisocial behaviour that each party has levelled against the other. The husband finally left the property in June of 2001 and has not been back since. The wife has continued to reside in the property alone and has made all the necessary mortgage payments.
The wife has purchased another motor vehicle for her own use, as the Toyota Landcruiser, which the parties purchased for $20,000.00 from part of the mortgage money, is no-longer running. She has provided a quotation that indicates that it will cost somewhere in the vicinity of $7,000.00 to repair it. She determined that this was not warranted and instead bought herself a new car for the sum of $15,500.00, all of which was borrowed from the National Australia Bank. The wife investigated the possibility of trading in the original Toyota Landcruiser and was offered the sum of $4,500.00 for it. However she says that the parties were unable to agree on selling the vehicle and it has subsequently been towed to her parents’ home. No other valuation in respect of this vehicle has been provided and both agree that its approximate worth is $4,500.00.
The husband has sold the tractor and slasher that was used on the property for the sum of $2,700.00. He did this in order to finance his new household and office.
Although it is an arrangement that is probably not completely palatable to either of them, the parties agree that they have divided the household contents between them and as a result neither of them seek to bring these items into account.
Both parties agree that there is an outstanding debt owed to a plumber in respect of work done on the property. The husband says the sum is $1,800.00. The wife says the sum is $1,000.00. No documentary evidence was produced by either party in respect of this debt and in such circumstances I do not believe that it is possible for the Court to take it into account.
The husband says that at separation he had credit card debts of approximately $5,000.00. He says that most of these expenses related to his business and some general living expenses. Once again no formal documentary evidence was provided in respect of these expenses and in their submissions counsel for neither of the parties sought to bring them into account.
e) The parties’ present circumstances and future prospects
The husband is 39 years of age. The wife is 29 years of age. There is no evidence to indicate other than that they each enjoy good health.
The husband continues to operate his electrical contracting business. He completed his apprenticeship as an electrician in 1984 and has held a contractor’s licence in the Northern Territory since 1989. He has been self-employed since that time. He is qualified to self-certify his work and in his own words is “a good electrician”. At the present time he deposed that he is earning about $375.00 per week and his last year’s taxable income was approximately $10,000.00. He asserts that his weekly expenses are $300.00 per week. He says that he is currently living alone in a flat with a dog. I suspect that he is still somewhat bitter regarding the breakdown of the marriage. I do not think that his future prospects of work are bleak. In fact I believe that he will be able to earn a comfortable living in Darwin as an electrical contractor.
The wife continues to be employed as an office administrator. She has been in continuous employment since she met the husband. I anticipate that she will continue in her employment for the foreseeable future. She did not provide details of her current salary but I imagine that it has not varied markedly from what it was in 1998/99 when it was $39,000.00. It is the wife’s wish to assume ownership of the former matrimonial home and to continue to live there.
Neither party is currently involved in another relationship and as a result neither has any legal responsibility to support another person.
The wife has significantly more superannuation than the husband does but it is not a great amount. She has an amount of approximately $15,000.00. The husband has an amount of $1,500.00.
f) Assets and liabilities
The parties were able to agree as to the current value of the property situated at 7 S Drive, M L. They agreed the value of the property was $192,500.00. The amount owing on the mortgage is currently $78,000.00.
The tractor and slasher sold by the husband following separation should be included in the list of the parties’ assets available for division. The parties agree that these items should be given the value that the husband received for them, namely $2,700.00.
The Toyota Landcruiser motor vehicle purchased by the parties in 1997 with part of the mortgage advance should also be included. As I have already indicated, no formal valuation of this vehicle has been provided by either party, but it seems that they agree the value of $4,500.00 should be attributed to it, being the trade-in offer received by the wife for it.
The husband owns an old Holden motor vehicle. Once again no formal valuation of this vehicle has been provided but the parties agree it is valued at $500.00. This motor vehicle and the motor vehicle the husband is currently driving and the debt relating to it should also be included in the list of assets and debts available for distribution between the parties.
For reasons already provided I do not believe that it appropriate to include the amounts the wife has claimed she owes to both of her parents in the list of the parties’ matrimonial debts. Neither party sought to include in the assets of the parties the motor vehicle the wife has purchased since separation and the debt relating to it or any other of their credit card debts. For that reason these items are not included in the list of assets and debts.
I find that the assets available for distribution are as follows:
7 S Drive, M L
$192,500.00
Toyota Landcruiser
$4,500.00
Tractor & Slasher
$2,700.00
HR Holden
$500.00
1995 Toyota Landcruiser
$18,000.00
Total Assets
$218,200.00
I find that the relevant liabilities to be taken into account in the division of that sum are as follows:
Mortgage to Westpac Bank
$78,000.00
Debt to AGC re Husband’s Car
$17,000.00
Total Debts
$95,000.00
Accordingly an amount of $123,200.00 represented by assets in the possession of the parties, or in the case of the tractor and slasher, formerly in the possession of the parties is available for distribution between them.
Issues and the submission of the parties
The major issues for determination in this matter appear to be as follows:
·What weight should be given to the wife’s initial contribution of the vacant land at M L;
·What weight should be given to the husband’s contribution to the construction of the shed and dwelling at the property;
·Is it more appropriate for the Court to take an asset by asset approach in respect of the division of the parties’ matrimonial property or to approach the division of those assets in a global sense?
Counsel for the wife, Mr Cassells urged me to take an asset by asset approach in respect of the division of the property, particularly in so far as the matrimonial home was concerned. It was his position that as the marriage and the relationship between the parties was comparatively short and that there had been in his words “no mingling” of their assets that this was the only appropriate approach.
I cannot agree. True it is that throughout the relationship the wife was solely responsible for the payment of the mortgage. However the husband was intimately involved in the construction of the dwelling on the property. In my view this has resulted in an increase in its value. He devoted a large proportion of his time to it and a significant degree of effort. The wife and her mother transferred their interest to the husband and wife jointly. In my view, this is not a case where the parties have strictly divided and kept their own assets separate from one another as in McMahon and McMahon (1995) FLC 92-205. In my view, both parties were closely involved in the construction of the house on the property although the husband did far more work on it than the wife did. When the dwelling was completed, they both lived in it. In such circumstances I also bear in mind what was said by Mason and Deane JJ in Norbis and Norbis (1986) FLC 91-712 at p 75,168 that generally speaking the global approach is usually the more convenient approach to take.
In my view, in this case it is more appropriate to take a global approach in assessing the contribution of the parties to the various assets that have been identified.
Mr Cassells, for the wife, in support of submissions that an asset by asset approach be taken in respect of the division of the assets, particularly the property at M L, argued that the appropriate means of assessing the wife’s contribution to the acquisition of this property was as follows. The wife’s initial contribution to the property should be isolated at the time of the commencement of the parties’ cohabitation, namely January of 1996. At this time he argued that the unimproved capital value of the land was $79,500.00. From this sum should be deducted the amount owing on the mortgage at the time, an amount of $14,400.00 in round terms. To this amount should be added the amount of $2,500.00 representing the addition in value to the property as a result of her father’s planting of the mango trees on it. These calculations gave a total initial contribution of the wife that Mr Cassells fixed at $67,600.00. This sum Mr Cassells argued his client should recoup from the division of the former matrimonial home. He then submitted that after this sum had been subtracted from the net value of the property after deduction of the amount owing in respect of the mortgage that the balance should then be divided equally between the parties to reflect equal contributions during the relationship and marriage. This would result in the husband receiving the sum of $23,450.00 and the wife receiving the sum of $91,050.00 from the net value of the former matrimonial home. This, Mr Cassells said, was a result that would reflect the far superior initial financial contribution of the wife and was in the circumstances the appropriate result. Otherwise, if a global approach was taken, Mr Cassells submitted that for the same reason – that his client had made a far superior financial contribution – the assets should be divided between the parties on an 80/20 % basis in favour of his client for the same reason. In Mr Cassell’s phrase so that “the wife’s initial financial contribution would not be diluted”.
I think that to take the approach advocated by Mr Cassells would be demonstrably unfair to the husband. Firstly, for reasons already provided, I am dubious about accepting the unimproved capital value of the land in July of 1996 as being its value in January of 1996. Secondly, I do not believe it is appropriate to simply add on the value of Mr S’s alleged contribution made by virtue of the planting of the mango trees. Thirdly, simply subtracting the net value of the mortgage as at the present time does not reflect what in reality happened in respect of the money initially advanced. Of the $80,000.00 advanced by first mortgage only $60.000.00 was used in making improvements to the land, the remainder being used to purchase the vehicle, which has substantially depreciated in value since its purchase.
Ms Sivyer, on behalf of the husband argued that a global approach should be taken to the parties’ assets. She submitted that the evidence indicated that they had each made an equal contribution to their acquisition and conservation and that therefore the correct approach was to divide their net worth on a 50/50 % basis.
Counsel for neither of the parties argued that this was a case which called for any further adjustment in favour of either party by virtue of any factor as set out in section 75(2) of the Family Law Act.
In Pierce v Pierce (1999) FLC 92-844 at p. 85,873 the Full Court of the Family Court considered the weight to be given to initial financial contribution and said as follows:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home…”
Assessing the contributions of the parties
In my view it is not possible to ascertain with any degree of mathematical precision the precise value of the land in the property at
7 S Drive, M L and the equity of the wife in it at the time the parties began to live together in January of 1996. However on the most conservative of view she had by this time an interest worth in the vicinity of $40,601.15 in the property. This equates very closely to one third of the total pool of matrimonial assets currently available for distribution between the parties. On any view this is a significant matter. Particularly given the comparatively short duration of the relationship between the parties of some five years.
The other matter that must be considered is the contribution made by the husband through his skills, contacts and endeavours in erecting the dwelling on the property. The property at the present time is worth $192,500.00. Of this sum it can be said that the parties have injected capital of at least $115,000.00 into the property. This sum is represented by the initial value of the land of $55,000.00 together with the value of the mortgage monies, some $60,000.00, which went towards the purchase of materials and building expenses related to the construction of the dwelling on the property. In my view the increase in the value of the parties’ capital in the property can be attributable to only two factors. Firstly, the appreciation of the property through Met forces over the course of the ten years since the wife and her mother first acquired it. Secondly, the value added to the property by reason of the husband’s efforts and skills as a builder and his acumen in being able to gain assistance from other tradesman in the construction of the dwelling at little or no cost to the parties. In my view this is a significant matter.
In my view, this contribution by the husband off sets too a large degree the weight to be given to the wife’s undoubted superior initial financial contribution at the start of the relationship. Through his efforts the husband has markedly increased in value the amount of the wife’s initial contribution.
Taking all these matters into account leads to an assessment of contributions up to the time of separation as 65/35 % in favour of the wife.
In my view there are no matters that have occurred between the time of separation and trial which call for any further assessments in favour of either party.
Assessment of section 75(2) factors
In my view, given the ages of the parties, their current state of apparent good health and their continued employment in the workforce, this is not a case that calls for any further apportionment in the division of the matrimonial assets by reason of any of the factors as set out in section 75(2) of the Family Law Act.
Effect of the Orders
The conclusions that I have reached mean the wife will receive 65% of the net matrimonial assets. She wishes to retain in her possession, if possible the former matrimonial home situated at 7 S Drive, M L. She should be given this opportunity. But if it is not possible the property must be sold.
The husband should retain the motor vehicle currently in his possession and the debt related to it. He should also retain the HR Holden vehicle, as it was initially his. Allowance should also be made for the sale of the tractor and slasher by him in the final orders.
The question of the Toyota Landcruiser that was bought by the parties with a portion of the mortgage advance is a more vexed one. Neither party appears to want the vehicle. It is currently not operative and is being stored at the wife’s parents’ home. On balance I think it is probably more convenient if the husband retains this vehicle, as it seems to me that he will more likely be able to sell it than the wife.
Sixty five per cent of the net assets, working on a figure of $123,200.00 is $80,080.00. Thirty five per cent of the net assets is $43,120.00.
From the sum of $43,120.00 must be deducted the value of assets either currently or notionally in the possession of the husband. Namely the tractor and slasher ($2,700.00); the HR Holden ($500.00); the Toyota Landcruiser ($4,500.00) and his interest in his vehicle after deduction of the debt to AGC ($1,000.00). A total of $8,700.00. This means that the husband must receive the sum of $34,420.00 from the wife in exchange for the transfer to her of all his interest in the former matrimonial home.
Accordingly the orders of the Court will be as set out at the commencement of these reasons for judgement. I am of the view that they constitute a just and equitable division of the parties’ matrimonial assets.
I certify that the preceding ninety-eight (98) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: Lynnette Chin
Date: 24 April 2002
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