W and W (No.2)
[2003] FMCAfam 151
•9 May 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| W & W (No.2) | [2003] FMCAfam 151 |
| FAMILY LAW – Adjustment of property – whether asset by asset or global approach appropriate – whether one party wasted assets by gambling – contributions between the parties – Family Law Act 1975 – section 75(2) factors. Family Law Act 1975, ss.75(2), 79(4), 44(3) In the Marriage of Lee Steere and Lee Steere (1985) FLC 91 – 626 |
| Applicant: | G G W |
| Respondent: | E J W |
| File No: | (P)MLM 7208 of 2002 |
| Delivered on: | 9 May 2003 |
| Delivered at: | Melbourne |
| Hearing Dates: | 10 & 11 April 2003 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Serra |
| Solicitors for the Applicant: | Alpass & Associates |
| Counsel for the Respondent: | Mr Hoult |
| Solicitors for the Respondent: | David Wilkinson & Co. |
ORDERS
That the Husband pay to the Wife the sum of $37,197.00 within 60 days of today’s date.
Contemporaneously with the payment of the sum of $37,197.00:
(i)The Wife to 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 305 C Road B in the state of V;
(ii)The Husband indemnify the Wife against all payments and liabilities in respect of any mortgage or charge over the property and all rates, taxes and outgoings of all with respect to the property of whatsoever nature and kind;
(iii)The Wife vacate the said property.
That the sum of $16,127.00 held in the trust account of John C. D
Kever and Associates be paid to the Wife.That unless specified in these orders, and save for the purposes of enforcing the payment of 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 forego all claims he/she may have to any superannuation or work related benefits belonging to or earned by the other;
(c)Insurance policies remain and / or become the sole property of the life assured named therein;
(d)Each party be solely liable for and indemnify the other against all liability howsoever kind in nature and howsoever arising, encumbering any item of property to which that party is entitled pursuant to these orders.
Within 14 days, the Wife deliver to or permit the Husband to take possession of a power saw, a power drill, a box of nails, screws and screwdrivers and an elephant wall plaque.
The applications be otherwise dismissed and removed from the List of Cases waiting finalisation.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)MLM 7208 of 2002
| G G W |
Applicant
And
| E J W |
Respondent
REASONS FOR JUDGMENT
Applications
This matter concerns competing Applications for property settlement between the Husband and Wife.
The proceedings were commenced by the Husband who filed an Application on 16 August 2002. The Wife filed a Response on
30 September 2002.
Background
The Husband was born on 17 March 1948. He is 55 years of age. The Wife was born on 26 October 1947. She is 55 years of age. There are no children of the marriage. Both have adult children from previous marriages. The parties were married on 22 August 1993. They separated in October 2000, resumed cohabitation in February 2001 and finally separated on 26 October 2001.
The issues
At the time of the marriage the Husband owned a house at 177 S Road B. He had purchased it in November 1990 for $107,000.00. At the time, he borrowed $77,000.00 from a cooperative housing society.
The Wife moved to A from A in 1993. At that time, she owned two properties in A comprising two houses; one of which includes a shop and the other a partly built house.
In June 1998, the parties purchased a property at 305 C Road B for $108,500.00. A loan of $150,000.00 was obtained from a trustee company. The house on the property was rented out. Both the property at B and the property at B were used as security for the loan.
In February 1999, the parties purchased the neighbouring property at 307 C Road B for the sum of $108,500.00. A further $110,000.00 was borrowed. Their intention was to develop both properties by improving the existing house and erecting six units.
The development scheme did not come to fruition, and the development was sold for $300,000.00 on the basis that the parties retained the title to the old house.
The Husband now lives in the B house and the Wife in the B house. The Husband contends that an asset by asset approach should be taken to the distribution of property and that he should retain both the B house and the B house, and the Wife should retain her A properties and be paid an additional $40,000.00 in addition to the amount of $14,000.00 she has already received by way of interim property settlement pursuant to an order made in December 2002.
The Wife contends that she should retain the B house and be paid the additional sum of $40,000.00.
The Husband contends that the Wife wasted assets by gambling significant amounts of money on poker machines, and that that should be taken into account. The Wife contends that there are various amounts which the Husband has retained and should be added back into the pool of assets and taken into account in any distribution.
The Husband contends that in addition to his making the sole initial contribution to the pool of assets, he has made the overwhelming financial contribution. There are issues concerning each parties ability to earn income.
Evidence
The Wife was born in C. Her first Husband died in 1978. In 1985 she moved with her two children to A. She worked as a nanny and had the shop already described which operated part-time. She had a friend from C who married an A. She visited her in A in May 1993 and met the Husband. After marrying, she had to return to A in November 1999 for six months to enable her residency visa to be approved. She returned to A in May 1994. She had hardly any money because her savings had been spent on the holiday and her return trip.
After returning to A she attended English classes for 12 months and then completed a course in Children's Services. She worked in childcare until 1998 and now works as a personal carer. There was some issue about her income, but recent pay slips show gross pay varying between $680.00 and $780.00 per fortnight. She works about 20 hours per week.
Until recently, the Husband was employed as a M F at the N C P in D. He worked night shift; often seven days per week. Since January 2003 he has been on sickness benefits. Evidence from his doctor is that he is overweight and suffers from diabetes, liver problems and depression. He hopes to be able to return to work for two to three days per week in the near future.
In January 1990, the Husband obtained a planning permit to build a granny flat for his mother at the B property. He has been building it himself but it is not yet completed. The Wife says that she assisted, for instance, by doing some painting. The Husband was critical of the Wife’s painting skills and said he had to re-do much of it.
In early 1994, the Husband accepted a separation package from the R M I of T where he was employed teaching apprentices and technicians in the D of M T T. He received a gross lump sum payment of $105,349.00 on 30 June 1994. He paid $25,027.36 into his Education Credit Union account on 4 July 1994, and on 20 July 1994 he placed $82,000.00 on term deposit with National Australia Bank.
In October 1994, he discharged the mortgage over the B property with the payment of $69,427.09 from his National Australia Bank account. Subsequently, the B property was mortgaged again to finance the B properties, but the mortgage was discharged after the sale of the B property which has already been described. The balance of money left over after the sale of the B property was placed into a solicitor's trust account. $14,000.00 has been paid the Wife and at the time of trial $16,127.00 remained.
The Husband suffered an amputation injury to his left index finger in 1999. He received a lump sum compensation payment of $30,210.00 on 9 March 2000. He deposited that into the National Australia Bank.
The Husband’s income for the year ended 30 June 1993, prior to his redundancy, was $40,353.00. For the year ended 30 June 2001 it was $52,121.00.
In evidence, the highest yearly income for the Wife was $15,049.00 for the year ended 30 June 1997. Her current rate of income is unlikely to yield much more per year.
While the parties were living together they had Thai students as boarders. This, therefore, was another source of income. Rent from the house at B was also a source of income.
The parties had several trips to A. The Wife stayed for longer periods than the Husband. The Husband said, and the Wife agreed, that on those trips she took stock for the shop in A, soft toys and underwear, and things she bought at markets. The Husband said that the Wife, from time to time, sent similar goods to A. The Wife’s evidence was that she needed to return to A every two years to maintain her residency status in that country.
An issue between the parties was the Wife’s ability to earn income from the shop in A. The Wife said that the shop was run by her sons, she received no income and was unable to receive any income. However, when in A she said she had kept herself by working in the shop.
The Husband gave evidence about the nature of the shop. It is a general goods shop. It sells food, drink, clothing and general items. The area is quite small; seemingly a room at the front of the house.
Another issue between the parties was whether the Wife was likely to return to A. The Husband’s sister gave evidence of the Wife telling her that she wanted to make money gambling and return to A where she claimed it was possible to set up and run a business unlike in A. The Wife denied that she had any intention to return to A. She said that her friends and her life are in A.
An issue was whether the Wife had a gambling problem and how much money she had spent on poker machines. The Husband’s evidence was that he was alerted to the problem when telephoned by the Education Credit Union and told that his account was $1,400.00 overdrawn. When he investigated, he found money gone from the National Australia Bank account as well. His evidence was that he worked shift work at night and long hours and that all household matters, including money, were handled by the Wife.
He had gone through the bank statements available to him. He identified amounts taken from automatic teller machines and gaming venues and machines close to gaming venues where there were withdrawals a little later. Examples used in his evidence showed small amounts of $20.00 or $40.00 and sometimes larger amounts withdrawn from automatic teller machines near or at gaming venues; sometimes amounting to hundreds of dollars in one day. He said that these gaming venues could be reached by the Wife either by public transport or by walking. He said that she had not had a drivers licence, but had become very good at using public transport. He said that he had visited gaming venues with the Wife on only six occasions, and he described each one. He said that sometimes on these occasions the Wife would, to his knowledge, withdraw money from an automatic teller machine and then bring it to him saying that she had won it.
The Wife denied that she had a gambling problem. She said that she had only ever visited gaming venues with the Husband. As her evidence progressed in cross-examination this aspect became confused. She said that when the marriage was breaking up she was unwell and gambling was her outlet. When a specific example of some hundreds of dollars drawn from an automatic teller machine at a gambling venue was put to her, she said that she had won more than that amount on that day. She said that when she won she used to keep the payment slips and cash them in the end of the day and so would leave with money.
Another example was put to her. It showed that the day after a pay day, she withdrew most of the amount from an automatic teller machine at a gaming venue. She said that she had won and had kept the payment slips. She said that was how she had money for food and household expenses. She said she could not have spent all the money gambling because otherwise she would have had no money for food. While she maintained her claim that she had only ever visited gaming venues with her Husband, it became apparent during her cross-examination that this could not be correct. The bank records show frequent attendance at gaming venues during the daytime. The Husband worked at night and slept for much of the day. He could not have attended which the frequency of bank records show that the Wife attended.
The Husband’s sister, in her evidence, said that the Wife had told her that she had a gambling problem.
There was an agreement on the asset pool as follows:
·305 C Road B $ 162,500.00
·177 S Road B $ 192,500.00
·Motor-vehicle (Wife) $ 350.00
·Motor-vehicle (Husband) $ 5,000.00
·Furniture and tools (Husband) $ 9,000.00
·Furniture and tools (Wife) $ 600.00
·Amounts held in trust $ 16,127.00
·Amount received by Wife $ 14,000.00
·Argentine property $ 45,000.00
·Superannuation $ 19,645.00
$ 464,722.00
The precise break up between the parties of the superannuation amount is not apparent from the evidence. Most of it must be the Husband’s. The Wife’s financial statement dated 26 September states superannuation as $200.00. Given her pattern of employment in A it cannot now be much more than that. Neither party sought an Order for a splittable payment. The Wife’s superannuation is below the relevant amount. The parties were content to treat the Husband’s as a financial resource. The only reason for not permitting the parties to do this would be if it did not permit the Court to determine whether the Order finally proposed was just and equitable. That is not the case. The value of superannuation is insignificant compared to the total pool.
The Wife contends that the following amounts should be added back to the pool of assets.
·Deposit on kitchens $ 8,916.00
·Deposit on Windows $ 8,802.00
·Deposit on Q unit $ 2,000.00
·Balance of deposit, B $ 28,552.00
$ 48,270.00
The Husband’s evidence was that planning for the construction of the six units at the B property and renovation of the existing house was well underway when the property was sold. The planning permit had been obtained and he had placed orders, including orders for kitchen, bathroom and laundry joinery and windows. Deposits had been paid on the kitchens and windows. In fact, the amount paid for the windows was $18,802.00. They were CertainTeed windows, a proprietary brand of double-glazed PVC windows. The original order had been for more to equip all the proposed units. What had been purchased and paid for was eight windows, four for B and four for B. He had installed the four in the B house and was intending to install the other four in the B house. The deposit for kitchens and other joinery had been paid to Bunnings Hardware. He expected that he could recover the deposit less a small amount for administration.
$2,000.00 had been paid on the proposed purchase of two Q units which had not gone ahead. $800.00 was retained for legal expenses and the $1,200.00 which had been returned had gone to the parties bank account.
$28,552.00 had been received as the balance of the deposit for the sale of the B property. $14,000.00 had been given as a gift or extra commission to the salesman who made the sale. The Wife contended that she had not agreed to this and that the Husband had not accounted for the balance.
The Husband’s evidence was that when the parties put the B property up for sale, they had agreed that they needed $270,000.00 to cover their position. He said that he had attended a number of property investment seminars and when the salesman employed by the agents informed them that he had received an offer of $270,000.00, he had decided to use one of the techniques he had learnt at the seminars. This was to offer the salesman an incentive of half of any amount over $270,000.00 for which the property was sold. The salesman obtained a price of $300,000 and so the Husband gave the salesman $14,000.00 in cash.
The Wife said that she had not agreed to this. The Husband said that she had, and was enthusiastic about it. He said that when the sale price was attained she had urged him to make the payment.
The salesman gave evidence. He said that the offer had been made to him. He had told his employer who raised no objections. Indeed, he had suggested that the payment could be made by way of the purchase of a small tractor. The salesman said that the Wife had participated in the offer and agreed to it. He was concerned about it, and in particular the proposal that he be paid $14,000.00 because he was concerned about the ethics. However, the Husband and Wife insisted on the payment and it was made.
As to the balance, the Husband said that it was spent on renovations to the existing house in B. He produced invoices and notes to that effect. Some were in the name of or paid to M & S Developments. The Husband said that it was the purchaser of the B property and as a matter of convenience had arranged the work but the Husband had either paid the tradesmen direct or paid the developer.
Payment of $14,000.00 by way of interim property settlement was ordered on December 2002. By the same order, the Husband was ordered to pay spousal maintenance to the Wife in the sum of $92.00 per week until 1 March 2003. This amount was paid by a lump sum of $1,104.00 on 3 April 2003.
The Husband has $20,000.00 in banknotes in his home. He borrowed $10,000.00 from each of his brothers. This amount may be ignored because the $20,000.00 is offset by the liability to the brothers.
The law
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:
a)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;
b)The contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)The effect of any proposed order upon the earning capacity of either party;
d)The matters referred to in sub-section 75(2) as far as they are relevant;
e)Any other Order made under the Family Law Act affecting a party to the marriage or a child of the marriage; and
f)Any child support payable.
The approach to the determination of an application under section 79 is well established (In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595) the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c). Thirdly, evaluating the matters contained in section 75(2) in so far as they are relevant.
In this case, counsel for the Husband has submitted that an asset by asset approach rather than the global approach should be adopted as described in McMahon v McMahon (1995) FLC 92 – 606.
In determining what Order the Court should make under section 79, the Court must be satisfied in all the circumstances that it is just and equitable to do so [Section 79(2)]. It is the justice and equity of the actual Orders that the Court must consider. Russell v Russell (1999) FLC 92-877.
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:
a)The assets, liabilities and financial resources of the parties to the marriage;
b)The relevant contributions of each of the parties;
c)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.
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.
Findings on property
Of the disputed items which the Wife alleges should be added back into the property, only the deposit on kitchens can be dealt with in this way. $8,916.00 has been paid to Bunnings as a deposit on joinery. Following the abandonment of the unit construction project, the Husband intended to use this money for new kitchens in both the B and B properties. That now seems unlikely. Consequently, the deposit less perhaps 10 percent for administration can be recovered from Bunnings by the Husband; an amount of $8,025.00.
$18,802.00 has been spent on windows. Four have been installed in the B property and the other four can be installed in the B property. The agreed value of the B property includes the installed windows. There is no evidence that their installation will increase the value of the B property. Consequently, there is no addition to be made to the property pool.
The fate of the $2,000.00 deposit on Q units has been adequately explained by the Husband. Some legal expenses had to be paid and the balance went into the parties’ bank account. There is nothing to add to the property pool.
The settlement or deposit monies of $28,552.00 has also been explained adequately. $14,000.00 of it was paid to the real estate salesman as additional commission or as a gift. There is no issue that the money was paid. The Wife said that she knew of it. The issue was whether the Wife agreed to it being paid and so whether it should be added back into the pool. Both the evidence of the Husband and the salesman is that the Wife did agree. The salesman’s evidence was straight forward and I consider honest. The Wife’s evidence was, in many respects, confused and unimpressive. I find that she did agree to the payment.
The Husband’s evidence is that the balance was spent on improvements to the B property. He produced documents which support his evidence. The Wife did not give evidence that the obvious improvements, painting, fencing, roofing and carport, were not done. I accept that that is how the money was spent and that its value is in the agreed value of the B property. There is nothing to be added back into the property pool.
$8,025.00 is to be added to the already agreed amount of $464,722.00. The total property pool is $472,747.00.
The appropriate approach
The basis of the submission that an asset by asset approach is the appropriate one is that the marriage was a short one, that the Husband made the overwhelming financial contribution, and that it is that financial contribution which has produced most of the matrimonial property. He brought into the marriage the B property. The remaining debt on that property was discharged soon after the marriage by the Husband using part of his employment termination package. All of the money for the B purchase and the proposed project could be borrowed because the B property could be used as security. The majority of money which came in during the marriage was from the Husband.
The competing contention is that this was a reasonably typical marriage, although one where one party brought a substantial property asset into the marriage and the other brought nothing. It lasted eight years, although with a separation of six months at the commencement and another five months towards the end, from October 2002 until February 2003. The Husband worked outside the home earning income while the Wife carried out the homemaker role. She purchased food and did the cooking and cleaning. She was part of the purchase of the B project and of the proposed development scheme. She cared for the Thai students who boarded and were therefore a source of income. The B property had increased in value from its purchase price of $107,000.00 in November 1990 to its current agreed value of $192,500.00. It was submitted that the Wife was entitled to share in this increase in value, most of which had occurred during the marriage.
The circumstances in which an asset by asset approach is preferable to a global approach have been considered by the High Court in Norbis v Norbis (1985-1986) 161 CLR 513 and by a Full Court of the Family Court in McMahon v McMahon (1995) FLC 92-606.
In Norbis v Norbis, Mason CJ and Dean J. indicated at 523 that in most cases the global approach is more convenient. Wilson and Dawson J.J. said at 532-3:
If the parties interests in specific items of property differ or they have made different contributions, it may be desirable to proceed upon an item by item basis in the division of property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be affected by the transfer or retention of interests in individual assets, as was convenient in this case.
In McMahon and the Full Court said at 82,043:
The short duration of and the unhappy nature of the marriage, coupled with the parties’ strict division of assets and their method of dealing with them lent itself to an asset by asset approach, particularly where they had separately identified another group of assets as joint.
I do not consider that the asset by asset approach is appropriate. There are two major assets, the two properties. One of them was acquired during the marriage. The other asset had a substantial increase in value during the marriage. The B property was acquired during the marriage, was purchased in joint names and treated as joint property. It had a substantial increase in value, a combination of the acquisition of two blocks of land together, the obtaining of a planning permit for the erection of units, and, no doubt, the recent rapid increase in residential property prices.
The Husband’s evidence is that he is the one who undertook the necessary tasks to obtain the planning permit. This is true. Nevertheless, this was at a time when the parties were living together and with the Wife fulfilling her homemaker role and caring for the boarders. She was contributing income although less than the Husband, through her own efforts and from the boarders.
The marriage was not particularly short, and for most of the period was happy. For instance, there were several trips to A. There is no reason why the normal global approach is not appropriate.
Wasting of asset through gambling
The Wife’s initial evidence that she only ever attended gambling venues with her Husband cannot be accepted. As I have already observed, documentary evidence in the form of the bank statements shows that the Wife must have been attending gambling venues without the Husband. The same documentary evidence shows that she withdrew large amounts of money from automatic teller machines at gambling venues. The only inference to be drawn is that the Wife used it to play the machines. The question is how much, and whether it was excessive to the extent that it should be taken into account in the property distribution.
While generally the Wife’s evidence about the extent of her gambling was confused and unsatisfactory, there was one aspect of her evidence which I consider is probably right. She said that she kept dockets for the winnings and did not use them for gambling. She would then cash them in as she left. That was the way she had money for food and other necessary purchases. Given the pattern of gambling, such as the occasion when nearly all of her fortnightly salary was withdrawn the following day at a gambling venue, it seems probable that she did this at least on some occasions. It is consistent with having a gambling problem. It helps reinforce the illusion of winning.
This makes it difficult to assess how much was lost. There is also the factor that attending gaming venues and playing the machines was the Wife’s form of entertainment. As a normal aspect of the finances of any marriage, parties are entitled to spend money on entertainment.
I accept the Husband’s calculation of $35,000.00 drawn from automatic teller machines at or close to gaming venues. How much of this was actually lost is not capable of precise calculation. A substantial amount was lost, and that it should be taken into account.
In Kowaliw v Kowaliw (1981) FLC 91-092, Baker J. said at 76,645:
If the party has acted in the manner to which I have referred earlier either by:
(a)embarking upon a course of conduct designed to reduce or minimise the effect of venue all worth of matrimonial assets, or
(b)acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value, then such conduct in my view and the economic consequences which flow therefrom are clearly matters to which the Court may have regarded pursuant to the provisions of section 75 (2)(o).
I consider that it is reasonable to allow $150.00 per week for housekeeping and spending money. The money appears to have been lost over about a two-year period, although exact calculation is not possible on the evidence. $150.00 per week over about two years is approximately $15,000.00. $35,000.00 less $15,000.00 means $20,000.00 should be made as an adjustment against the Wife’s share.
Section 79(4)(a) to (c)
The second of the steps in the exercise under section 79, is an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). It provides with:
In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.
The Full Court of the Family Court in Pierce v Pierce (1999) FLC 92 – 844 at page 85, 873 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 weight the initial contributions by a party with all other relevant contributions of both the Husband and the Wife. In considering the weight to be attached to the initial contribution, 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…”
The whole of the initial contribution was from the Husband. He made the majority of the financial contribution. On the other hand, the Wife performed a homemaker role, earned some income, including the need to care for the boarders; a source of income. The B property project was a joint undertaking and a substantial, although unquantifiable party, of the value of the property pool came about through increased in value of property after the marriage. I think contribution should be apportioned 80% to the Husband and 20% to the Wife.
Section 79(4)(d) to (g)
The third step in the process of apportioning the assets available for distribution between the parties is to consider the Section 74(4) factors.
a)The effect of any proposed order upon the earning capacity of either party to the marriage.
The Orders that I propose making in this matter will not affect the earning capacity of either party to these proceedings.
b)The matters referred to in sub-section 75(2) so far as they are relevant:
i)The age and state of health of each of the parties.
Both parties are aged 55. The Husband suffers from ill health such that he was on sickness benefits at the time of the hearing. He hoped to return to work shortly for two or three days a week. There was no medical evidence to suggest that the Wife was in the ill health, but her ability to obtain work for more than the 20 hours a week she currently works is doubtful.
c)The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment.
The Order I propose to make means that the bulk of the financial resources will remain with the Husband. If he has the capacity to work full-time he has a significantly greater earning capacity than the Wife. The Husband has $19,645.00 in superannuation. The Wife has virtually none. The Wife owns her properties in A, and has the ability to earn income from the shop or kiosk in A if she is living there. It is not possible to make a finding of how much that income might be, except that it is fairly modest.
d)Whether either party has the care or control of a child of the marriage who has not obtained the age of 18 years.
Neither party has the care or control of a child under 18.
e)Commitments of each of the parties that are necessary to enable the parties to support:
i)himself or herself;
ii)a child or another person that the party has a duty to maintain.
Neither of the parties has commitments other than those necessary to support himself or herself.
f)The responsibilities of either party to support any other person.
Neither party has a responsibility to support any one other person.
g)The eligibility of either party for a pension, allowance or benefit under:
i)any law of the Commonwealth, of a State or Territory or of any other country; or
ii)any superannuation fund or scheme, whether the fund or scheme was established or operates within or outside A;
and the rate of any such pension, allowance or benefit being paid to either party.
The Husband has a small amount of superannuation and the Wife very little.
h)Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable.
The Wife has suffered a deterioration in her standard of living because she no longer has the Husband’s income to support her. However, much of that deterioration would seem to be her inability to gamble at poker machine venues. Prior to the parties’ separation, the standard of living seemed relatively modest, except that they were able to travel to A. The Husband’s standard of living has deteriorated, but mostly deities due to his ill health.
i)The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
j)The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
k)The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
This is not a case where either party makes application in respect of spousal maintenance.
l)The need to protect a party who wishes to continue that party’s role as a parent.
Neither party has a role as a parent.
m)If either party is cohabiting with another person – the financial circumstances relating to the cohabitation.
Neither party is cohabiting with another person nor is it likely in the foreseeable future that this situation will change.
n)Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Neither party has provided child support.
o)Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
Under this heading, there are two matters relevant. The first is the wasting of assets through gambling which I have already considered.
I have already said that I consider that this is an amount of $20,000.00.
The other is whether the Wife is likely to return to A. On the balance of probabilities, I consider that she is. She has property in A, and her two sons and their families live there. She has grandchildren in A. She has returned there for extended periods during the marriage. She says that she must return every two years to maintain her residence status in A, and it is apparent that she does wish to maintain that status. I accept the Husband’s sister’s evidence that the Wife told her that she intended to return to A. When the Wife originally came to A, she came on holiday to visit a friend. She met the Husband and married him. For significant time to A, marriage and the Husband, I now gone. All of these matters leading to the conclusion that when she next returns to A in order to maintain her residence status, it is probable that she will not return to A.
Any other order made under this Act affecting a party to the marriage or a child of the marriage.
There are no other orders made under the Family Law Act 1975 which affect a party or the child which needs to be taken into account.
p)Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
There is no child support which needs to be considered.
Conclusions
I consider that the appropriate way of dealing with the needs matters used to treat the $20,000.00 lost through gambling by the Wife as setting off the Husband’s greater superannuation. In addition, I think that there should be a further 5 percent adjustment in favour of the Wife.
Finally, I must consider whether the Order proposed is just and equitable. Given all the circumstances, I consider that it is.
The Husband sought an Order for the return to him of certain specific assets. In cross-examination, the Wife agreed to this. These assets are a power saw, a power drill, a box of nails, screws and screwdrivers and an elephant wall plaque.
The Orders I propose will result in the Husband, in addition to retaining his superannuation, having the following assets:
·305 C Road B $ 162,500.00
·177 S Road B $ 192,500.00
·Motor-vehicle $ 5,000.00
·Furniture and tools $ 5,000.00
·Kitchen refund $ 8025.00
·Total $ 377,025.00
The Wife will have the following assets.
·Argentine property $ 45,000.00
·Motor-vehicle $ 350.00
·Furniture and tools $ 600.00
·Interim payment $ 14,000.00
·Total $ 59,950.00
For the purpose of dividing the property pool, superannuation of $19,645.00 must be deducted leaving a pool of $453,100.00 to be distributed; 75% to the Husband and 25% to the Wife. The result is $113,275.50 for the Wife and $339,826.50 for the Husband. Therefore, the Wife must be paid an additional $53,324.00.
I propose putting this result into effect by ordering that the amount of $16,127.00 held in trust be paid to the Wife and that the Husband pay the Wife an additional amount of $37,197.00. The Wife must transfer her interest in the B property to the Husband, and otherwise property will remain with the party's as proposed by these reasons.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate:
Date: 9 May 2003
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