Wallace and Bannerman

[2015] FCCA 3233

FEDERAL CIRCUIT COURT OF AUSTRALIA

WALLACE & BANNERMAN [2015] FCCA 3233

Catchwords:
FAMILY LAW – Property – Husband deceased.

Applicant: MS WALLACE

Respondent: MR BANNERMAN

File Number: SYC 3846 of 2014

Judgment of: Judge Henderson

Hearing date: 21 September 2015

Date of Last Submission: 21 September 2015

Delivered at: Sydney

Delivered on: 22 September 2015

REPRESENTATION

Counsel for the Applicant: Mr Cairns

Solicitors for the Applicant: McCabe Partners Lawyers

Counsel for the Respondent: Mr Schonell

Solicitors for the Respondent: Owen Hodge Lawyers

ORDERS

1. That within 14 days of the date of these orders the parties sign all documents and do all things necessary to authorise the release of the net proceeds of sale of their former property known as Property H and the interest accrued thereon and distribute same as follows:

   (a)The sum of 142,421 to the wife, balance to the estate of the husband.

2. Within 28 days of these orders the parties sign all documents to discharge the current mortgage over the property at Property M and to enable the executors of the husband’s estate to obtain fresh finance to discharge the mortgage.

3. Subject to order (2) the respondent’s legal personal representative or beneficiaries be declared the sole legal and beneficial owners of the property at Property M.

4. The applicant wife be declared solely entitled to the following:

   (a)furniture and effects in her possession;

   (b)her car;

   (c)funds standing in her bank account;

   (d)jewellery in her possession;

   (e)superannuation;

   and similarly for the husband.

5. The applicant wife will indemnify and keep indemnified, the husband’s estate in respect of liabilities standing in her name and similarly, the husband’s estate will indemnify the wife.

6. In the event order (2) cannot be carried out, that is, the discharge of the current mortgage over Property M within 90 days, the property is to be placed on the market for sale and after discharge of the mortgage and solicitor’s costs and usual conveyancing costs, the net proceeds are to be retained by the husband’s estate.

7. Slip Rule Orders.

8. Order I of orders made 22 September 2015 be amended as follows:

9. That within 14 days of the date of these orders the parties sign all documents and do all things necessary to authorise the release of the net proceeds of sale of their former property known as Property H and the interest accrued thereon and distribute same as follows:

10. The sum of $129,822 to the wife, balance to the estate of the husband.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 3846 of 2014

MS WALLACE

Applicant

And

MR BANNERMAN

Respondent

REASONS FOR JUDGMENT

1. The matter of Wallace & Bannerman was a property application heard 21 September. Mr Cairns of counsel appeared for the applicant wife; Mr Schonell for the deceased husband, who was represented by his executor, his sister, who had by consent been appointed in his stead as his litigation guardian.

2. The material I read for the parties was as follows:

   a)For the wife:

   i)Initiating application, filed 24 June 2014;

   ii)Amended financial statement of 1 September 2015;

   iii)Affidavit of 4 September 2015;

   iv)I did not read the affidavit of Ms T, psychologist. Ms T was not available for cross-examination and her evidence was objected to.

   v)The wife did not tender any exhibits.

   vi)Case outline provided by her counsel, Mr Cairns.

   vii)The wife was cross-examined.

   b)For the deceased husband:

   i)Affidavit, filed 6 August 2015;

   ii)Response, filed in 2014;

   iii)Case outline prepared by Mr Schonell, which contained the orders he sought;

   iv)Exhibits:

   (1)Husband’s exhibit 1: An aide-mémoire of the parties’ various bank accounts, including their own personal account and mortgage accounts, showing withdrawals and deposits and other similar financial material.

   v)Affidavit of the litigation guardian, filed 13 August 2015.

3. The husband died on (omitted) 2015, after a long battle with lung cancer. Only the wife was cross-examined.

4. Court exhibit 1 was the agreed list of assets and liabilities.

5. It is agreed by both parties that they each made a significant contribution to their current assets by providing lump sums of money: For the wife, $120,000 from the sale of a property she owned prior to cohabitation, which was used towards the purchase of the matrimonial home at Property H; and for the husband some $184,000, being the net proceeds of sale of a holiday home he owned at Property P and sold during the course of the relationship.

6. The assets of the parties are as follows:

   a)Property at Property M, $420,000;

   b)Moneys in a controlled moneys account, $277,000;

   c)Joint account of $3020;

   d)Three insignificant bank accounts of the respondent husband, totalling $550;

   e)The wife has a streamline account of $2004;

   f)Wife has a car worth $6,500;

   g)Respondent has a car worth 3,000;

   h)Superannuation in the wife’s name of $223,097; and

   i)Superannuation in the husband’s name of $2600.

7. The debts:

   a)Mortgage for the Property M property of $320,000;

   b)The deceased husband abandoned a claim of a $35,000 being a loan to a friend; and

   c)The wife has a current credit card debt of $17,137.

8. In relation to those assets, I will not include the money the wife has in her current streamline account of $2004. These parties have been separated since 2011, physically separated since 2013: that money is her money. Similarly, I will not allow as a debt the wife’s credit card. As I have said, the parties have been separated for many years; there is simply no evidence that this credit card was a debt of the marriage.

9. There is net liquid property being the monies in trust, equity in Property M, joint account and the party’s cars to be distributed, separate to superannuation of $389,520.

10. As to superannuation the husband has $2600 and the wife $223,097. One of the issues for me at trial is whether I deal with the assets on a one pool or two pool approach.

11. The short chronology.

12. Respondent was born in 1958 and the applicant in 1959.

13. On (omitted) 2009 they commenced cohabitation.

14. They married in (omitted) 2009.

15. Shortly thereafter they purchased Property H for $625,000 and took out a mortgage of $650,000 with the (omitted) Bank in joint names.

16. In July 2009 the wife sold her property at Property S and applied the proceeds of sale of $120,000 to reduce the mortgage on Property H. In October 2011 the husband sold his home at Property P and the net proceeds of sale of $184,317.94 were applied to reduce the mortgage on Property H.

17. In January 2012 the parties purchased Property M for $399,000. I accept the evidence that this was purchased in the name of the deceased husband only for tax purposes as both parties were signatory to the mortgage.

18. The husband was earning an income of some $100,000 per annum; the wife’s income was only half that figure. That decision makes perfect sense and in no way affects the wife’s interest in that property. The purchase of Property M meant that Property H and Property M were rolled up into one all monies mortgage as the equity in Property H assisted in the purchase of Property M.

19. The parties had separated emotionally, the wife agreed in cross-examination, in about November 2011, but remained living under the one roof.

20. The husband ceased working as a (occupation omitted) at (employer omitted) in 2012 and commenced work with (employer omitted). He had to cease that work due to his poor health and he suffered a sub-cortical stroke.

21. In August 2014 the applicant received a redundancy payment of $30,000 from employment she had with (employer omitted). The wife had a credit card debt then of $12,000, which she paid off with part of her redundancy money. The rest she says was spent on living expenses.

22. The parties separated physically in August 2013.

23. In October 2013 the husband was diagnosed with lung cancer.

24. In December 2013 Property H was sold, netting $269,238 say $277,000.

25. The respondent commenced receiving a disability pension in March 2014.

26. He withdrew $31,000 out of his (omitted) Super, putting $28,000 back into the mortgage account and used the remainder to pay for his living expenses and significant medical expenses. He had been out of work at that time for almost a year.

27. He was admitted to palliative care in July 2015 and he passed away on (omitted) 2015.

28. This was a short marriage. In oral evidence, the wife agreed that they had separated emotionally in 2011 under the one roof and agreed that they physically separated in 2013. I found the wife was not a witness whose evidence I could rely upon, unless that evidence was agreed to or proved objectively. The reasons were that at worst she created history or, at best, she was careless or simply had a limited capacity to accurately recall events.

29. The wife sought to make out a case that the husband was verbally abusive towards her, aggressive to her and volatile and that his behaviour resulted in her suffering alopecia and a loss of confidence, which has affected her income earning capacity into the future.

30. The wife was given a chance in-chief to flesh out his behaviour, given the paucity of evidence in her affidavit at paragraph 23. Paragraph 23 of the wife’s affidavit:

    I recall an evening shortly after the respondent and I moved into Property H. My stepmother had a phone call with my father, a lengthy phone call with my sister. After I had hung up, the respondent threw the phone. I was shocked, thought it was a one-off, but he did it on two occasions later. He resorted to making angry personal calls to friends and family on my mobile to avoid angry outbursts from the respondent. He became increasingly volatile and his angry outburst became more frequent and I became fearful of him.

31. The wife was asked what was meant by angry outbursts, volatility and fear. Her reply “when I would go and see my family he would say”, “Why do you have to go there”, however she left and saw her family.

32. That he called her useless; complained about her overuse of pots, complained that she made a lot of clutter in the kitchen when cooking and did not need that many pots; that she did not water the garden properly, did not let the water soak into the plants; when she was endeavouring to make white sauce, he came to her and said “Stand aside and I will make it”, she agreed he made a better white sauce than her; he criticised how she did the housework.

33. On one occasion, but the witness could not remember when, he spat in her face, which is certainly unacceptable behaviour, if accepted by me. What caused her real concern after this incident was that in the morning, when she came downstairs, he smiled as if nothing had happened and said good morning and she began to feel anxious. Yet her evidence is and her actions are that she stayed in the home for two years post-separation living under the one roof.

34. The spitting incident was not put in her affidavit and one would have thought that it would have been highlighted in her mind. Her evidence was that she had difficulty recalling events because of the trauma of the relationship and how poorly she had been treated.

35. The wife had no medical evidence to support these claims. There was not one doctor’s note or report produced where she had complained about her husband’s treatment of her during this short marriage. There was no medical evidence to support her claim that her alopecia was caused by her husband’s poor behaviour towards her, although I accept she suffered from alopecia. The only mention of this is in her doctor’s notes, which is attached to her affidavit at annexure J. This is a note of a consultation on 3 April 2014:

    Recently divorced after an abusive relationship and following up court action with ex-husband.

36. This consultation was one year after physical separation and three years after emotional separation.

37. The wife left her employment with (employer omitted) due to what she said was bullying by her manager and boss. Her evidence was the manager said she should be answering calls from the weekend before she was due to start work at 9 o’clock. When the wife said to her manager, “I don’t have to start work until 9 o’clock”, the wife said the manager yelled at her and said, “You will start work when I say and I will speak to you later.” I could not see this was bullying however I can see it was an unpleasant incident.

38. The wife made a WorkCover claim after this saying she had to leave her employment because of this treatment. In the WorkCover claim there was no mention of her now allegations of previous anxiety or alopecia from poor behaviour or abuse meted out to her by her husband. The WorkCover claim was made in December 2014.

39. The WorkCover claim and her condition were reported in the claim by her doctor. The wife’s evidence was her doctor knew all about her abusive relationship with her husband and the impact it had had on her functioning and her hair loss, yet it was not mentioned in the form. The wife signed the form and said she probably did not read or realise that these matters had not been included.

40. This evidence is totally unsatisfactory at every level and is rejected by me. The wife has not satisfied me her husband was so abusive or volatile or behaved so poorly that he caused her alopecia, or that this two year marriage has resulted in a diminishing in her earning capacity. She is currently employed, albeit on a contract, which I accept is to cease in two weeks and is earning about $996 gross per week from that income.

41. There is no evidence in her material, nor did it come out in cross-examination, of looking for further work, or that this contract will not be extended. There was a lacunae and I have nothing.

42. Secondly, in relation to her veiled assertions that the husband drew down on the mortgage without her knowledge and used money for what she did not know, as she says in paragraphs 28 and 29 of her affidavit, the wife really came undone. Her evidence was clear, no money drawn down from the mortgage was ever used to pay off her credit card. Her evidence was that withdrawals from the mortgage from 26 July 2010 to 16 October 2012 totalling well over $100,000 were not made by her because the words, “withdrawal special payments” was shown to be next to the withdrawal and she did not make that notation.

43. The wife’s evidence was that if she had drawn down money for her use her name would have appeared next to the withdrawal.

44. However, the words, “withdrawal special repayments” is what the bank has named the payment not what the drawer down has named them. Thus her evidence did not assist me at all.

45. The wife was clear no drawn down from the mortgage were ever used to pay her credit cards. Annexure E to the husband’s affidavit shows three withdrawals the wife made on the mortgage which she admitted in cross-examination and referred to in her affidavit at paragraph 29. $3000 on 26 September 2011 for her son’s wedding which was actually (omitted) 2012, $1000 to pay her registration on her car on 11 May 2012 and $500 on 3 June 2013 which the wife had not put in her affidavit.

46. However, the wife had to agree that a $5000 withdrawal on 21 April 2011 was paid to her credit card and that withdrawals made on 7 May 2011 and 14 June 2011 were paid to her credit cards. This is contrary to her initial oral evidence that no moneys was used to pay her credit card and supports the husband’s evidence that the parties lived beyond their means which is supported on the evidence that the wife has today a credit card debt of some $17,000.

47. Thirdly, the wife included in her list of unknown drawn downs a sum of $13,465, which she readily admitted in the witness box was to pay stamp duty for Property M.

48. Yet her affidavit was clear she knew nothing about any draw downs and her husband has done something untoward with the money. Again, this evidence was simply unsatisfactory on every level and I cannot accept that only the husband made these draw downs. It is clear to me they each drew down on this mortgage account to support their lifestyles and the wife and the husband each benefited from those draw downs. One draw down in 2011 was used to pay for a holiday to (country omitted) and yet the wife had included that draw down of $5000-odd as something she knew nothing about, when she went on the very holiday. When pressed she said, “Well, my husband paid for it all”, so she is either careless or just making it up as she goes along.

49. I do not accept the wife’s evidence on this issue but I prefer the husband’s evidence which is, “We used the draw downs to pay for expenses because our income was not sufficient for the lifestyle we were leading”, and I accept his evidence that they probably could not afford the lifestyle they were leading but nevertheless, that is what they chose to do. In paragraph 33 of the wife’s affidavit the wife says:

    The husband carried out 136 cash transactions on his (omitted) Bank account from 2 February 2009 to 8 June 2013 for $1000 to $2000 at a time.”

50. Yes, he did. That money was paid directly into the mortgage. He paid his share of the mortgage by cash. Hers was a direct transfer by (omitted) Bank transfer and this did not assist me either in accepting the wife’s evidence, rather assisted what the husband said had happened.

51. This approach to try and muddy the waters or make it appear that the husband is doing something untoward when he was not has failed and it is his evidence I accept and not hers.

52. At cohabitation the wife had equity in her property in a unit, as well as superannuation of some $161,000. The husband had equity in his home at Property P and about $30,000 in superannuation.

53. The husband’s income was about $100,000 per annum, the wife’s approaching maybe $45,000 or so per annum. The wife agrees, the husband’s admits she contributed $120,000 to a Property H property and the husband contributed $184,317 to Property H’s mortgage. As I said, the husband earnt twice the income of the wife and I accept the figures in his affidavit that he paid by way of contribution from the sale of Property P and mortgage payments a total of $286,242 from the date of purchase of Property H, 28 July 2009 when the home was sold in March 2014.

54. During this same period the wife contributed $28,657 to the mortgage by way of payments regularly from her income and $120,000 from her unit. That’s $148,657 or 50 per cent of the husband’s or 25 per cent of the total contributions made by each to the acquisition of these assets. I accept the evidence of the husband that each bought food; each paid for the others costs at times. The wife agreed the husband paid the water rates, the council rates and the other insurances on the home and she made no contribution to those expenses.

55. I find on basis of this evidence that by way of a direct financial contribution the husband has made an overwhelming contribution to that of the wife. This is a short marriage with no children. There were about two years of cohabitation prior to marriage and two years of marriage totalling four years of cohabitation at best.

56. I find each made an equal contribution to the home making duties being shopping, washing, ironing, cooking, and cleaning. However, the husband has made a superior indirect contribution to the value of the assets by his significant renovation and maintenance and conservation of the home with which the wife agreed he carried out and as set out in paragraph 76 of his affidavit which details his personal efforts over three pages.

57. The wife said in cross examination “Yes, he did all of that. I helped him with the grout and he did not paint the skirting boards. We had a professional painter do it. He touched them up”. Clearly much of the money that was drawn down from the mortgage by the husband went toward to the renovation of Property H. The wife made no such concession in her affidavit, nor did she come to that realisation in the witness box. The wife maintained the fiction that the husband has improperly used joint funds. I find he did not.

1. I find that the direct and indirect contribution, together with parent and home-maker contributions, for the past by the husband result in a contribution based entitlement to him of 70 per cent and the wife 30 per cent.

2. The husband has no s.75(2) factors as he is deceased. Before assessing whether I should adjust the wife past contribution based entitlement having regard to section 75(2) of the Act I must deal with how I am to approach superannuation; as a two or one pool approach. I favour the two pool approach, in that I regard each party’s superannuation as their asset available to them and not as a matrimonial asset for the following.

3. Clearly, the wife had $161,000 at the commencement of cohabitation. Her superannuation is now $223,000. Cohabitation happened occurred in 2009 and it is now 2015. It was only a two year marriage and none of the wife’s salary went into this super, it was all employer contribution. The husband’s contribution to her current superannuation is minimal. Similarly the wife’s contribution to the husband’s superannuation which he accessed to support himself prior to his death is minimal. I will deal with the superannuation as an asset available to the wife to be taken into account in the ultimate division of the property and I will use a two pool and not a one pool approach.

4. The liquid matrimonial assets total $388,346.

5. On a 70/30 division this is $116,503.80 to the wife and $271,842.20 to the husband. The wife has a car worth six and a half thousand dollars. Adjusting her entitlement would result in a cash adjustment to her of $110,000. Adding that together with her superannuation gives her assets approaching some $333,000.

6. Slip rule amendment to judgment of paragraphs 61 and 62.

7. The liquid matrimonial assets total $389,520.

8. On a 70/30 division this is $116,856 to the wife and $272,664 to the husband. The wife has a car worth six and a half thousand dollars. Adjusting her entitlement would result in a cash adjustment to her of $110,356. Adding that together with her superannuation gives her assets approaching some $333,000.

9. Does this result in a just and equitable division? As I have said, the husband has no needs, he is deceased. The wife has been working and has possibly nine or so years to work.

10. However the wife does have needs. Her needs are to if at all possible re-house herself. This is relevant as she had a home albeit with a mortgage at co-habitation.

11. The wife is a contract worker at present not permanent full-time employment. The wife is 56 years of age and is approaching an age where she might wish to retire in four years. In those circumstances, I find a five per cent adjustment of the matrimonial assets to her having regard to these needs is proper. This would result in the wife receiving 35 per cent of the assets I found for division and the husband, 65 per cent.

12. I accept the wife has superannuation of $223,097 which she has already accessed to the amount of $16,000. I do not know what her superannuation value was at separation. That document was not produced and she may have accessed more of her superannuation. That is unknown. However, this was her asset at the commencement of cohabitation, there was minimal contribution to it by the husband, and she is the only party to this matter who has any s.75(2) factors. The husband accessed his superannuation to support himself as well. In light of these facts and I still find a five per cent adjustment is proper.

13. A 35/65 adjustment of the liquid assets is s $135,921 to the wife, less her car of six and a half thousand, is $142,421, and the balance to the husband. This results in $365,518 to her including her car.

14. This leaves the respondent, or the estate, with some $255,024, including his superannuation, of which $100,000 of that is in the property at Property M and the balance is in cash, a car and his superannuation.

15. I find these orders are just and equitable in all the circumstances and I will so order.

16. Slip rule amendment to judgment at paragraphs 70 and 71.

17. A 35%/ 65% adjustment of the liquid assets of $389,520 is $136,322 to the wife and $253,188 to the deceased husbands’ estate. The wife‘s car is worth $6,500. Taking the value of the car from her cash adjustment is an entitlement of $129,822 cash adjustment to her. This results in a total to the wife of $359,419 being her superannuation of $223,097, her car $6,500 and her share of monies in trust of $129,822.

18. This leaves the respondent, or the estate, with some $255,798 being the balance of monies in trust of $147,178 the equity in Property M of $100,000, car $3000, superannuation $2600 and the joint account $3020.

19. I find these orders are just and equitable in all the circumstances and I will so order.

I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Judge Henderson

Date: 8 December 2015