Watson and Blain
[2008] FMCAfam 33
•25 January 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WATSON & BLAIN | [2008] FMCAfam 33 |
| FAMILY LAW – Property – elderly litigants – long post-separation period – issue as to contributions – issues as to section 75(2) factors. |
| Family Law Act 1975 (Cth), ss.75, 79 |
| Bushby and Bushby (1988) FLC 91-919 Williams & Williams [2007] FamCA 313 |
| Applicant: | MS WATSON |
| Respondent: | MR BLAIN |
| File Number: | SYM 472 of 2004 |
| Judgment of: | Sexton FM |
| Hearing dates: | 29 and 30 October 2007 |
| Date of Last Submission: | 30 October 2007 |
| Delivered at: | Sydney |
| Delivered on: | 25 January 2008 |
REPRESENTATION
| Counsel for the Applicant: | Ms G O’Connor |
| Solicitors for the Applicant: | Pancific Legal |
| Solicitors for the Respondent: | Marriott Oliver Solicitors |
THE COURT ORDERS THAT:
By no later than 31 March 2008, the husband pay to the wife by way of property settlement, the sum of $123,526.18 and simultaneously with payment, the wife do all things and sign all such documents necessary as may be required to transfer to the husband at the expense of the husband all her right, title and interest in property situated at and known as the N Property being the whole of the land
more particularly described in Certificate of Title Folio Identifier 252/246013 [“the N property”].
The husband shall be solely liable for and indemnify the wife against all liability she has pursuant to all rates, taxes and other outgoings which relate to the N property of whatsoever nature and kind.
In the event the husband fails to pay the amount due in accordance with Order (1) by the due date, Orders (4)-(6) will apply.
The parties do all acts and things necessary to forthwith place the N property on the market for sale by private treaty at a price agreed between the parties and failing such agreement at a price equivalent to the mean of 2 valuations provided by registered valuers, being members of the Australian Institute of Valuers, one obtained by and at the expense of the wife and one obtained by and at the expense of the husband, such valuations to be made not more than 2 weeks apart from each other.
In the event the N property is not sold by private treaty within 3 months from the date of listing, the parties forthwith do all acts and things necessary including the execution of all documents necessary for the sale of the property by public auction.
The parties do all acts and things necessary to distribute the proceeds of sale of the N property in the following order and priority:
(a)In payment of any fee required to collect the Certificate of Title from ANZ Bank and register a discharge of the mortgage;
(b)In payment of agent’s commission and/or auction expenses due on sale;
(c)In payment of legal costs of sale;
(d)In adjustment of rates and other outgoings in accordance with usual conveyancing practice;
(e)In payment of $62,773.82 to the husband, less any amount owing in accordance with Order (7);
(f)In payment of 69% of the balance to the wife; and
(g)In payment of the balance to the husband.
Pending compliance with Order (1) or completion of the sale in accordance with Order (6), the husband meet all outgoings on the N property and in the event the husband fails to comply with this Order, any arrears on outgoings on the N property be deducted from the husband’s payment in accordance with Order (6)(e).
Except as otherwise provided in these orders, the husband and the wife retain all other items of property currently in the possession or control of each of them respectively, including superannuation entitlements.
Except as otherwise provided in these orders, the husband and the wife remain liable for any debts, howsoever arising, in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
In the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Court at its Sydney Registry be appointed pursuant to section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
All exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
IT IS NOTED that publication of this judgment under the pseudonym Watson & Blain is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
SYM 472 of 2004
| MS WATSON |
Applicant
And
| MR BLAIN |
Respondent
REASONS FOR JUDGMENT
Introduction
This case concerns property adjustment. The parties started living together in approximately September 1988 and married in September 1989. There are no children of the marriage. The husband filed an Application for Divorce in August 2004 deposing to separation in April 1994. The wife did not dispute the date of separation in the uncontested divorce proceedings and the Court therefore made a finding that the parties separated in April 1994. However, in these proceedings, each party deposed to separation in April 1995 when the husband moved out of the former matrimonial home at W Property. It seems likely the husband made an error in his divorce application in relation to the year of separation and that the parties separated in April 1995, after approximately six and half years of cohabitation.
In 1996 the parties attended mediation. Each party said that they reached agreement at mediation as to how they would manage their affairs. The wife annexed an unsigned document dated 28 May 1996 titled “Joint Agreement” to her affidavit sworn 10 October 2007 and said that document reflected the agreement the parties reached at mediation. The husband said he did not recall ever seeing an agreement in writing. Nothing in my view turns on this difference because the parties were not in dispute as to the plan that was agreed at that time. The parties were to sell the W Property property to the wife’s daughter and son-in-law, and with the net proceeds, after discharge of the loan secured on the property, the parties were to purchase a property at N in joint names. The husband was to live at the N property, and the wife was to stay at W Property until her retirement in a few years time, and spend weekends with the husband at N. The wife was to move to N once she had retired. There is no dispute that the parties acted on this plan, at least in part. In August 1996 the wife sold the W Property property to her daughter and son-in-law, and in the same month the parties purchased the N property in joint names. In March 1997 the husband moved to the N property and, with the exception of one period of a few months, the husband has lived there since. The wife initially spent every weekend at the N property but over time her visits became fewer. The wife has not stayed at N for a number of years. Though there is a difference in the parties’ evidence as to exactly how much time the wife spent at N, I am not satisfied the difference is material. The parties did not live together again as husband and wife after the husband left the W Property property in 1995.
The wife is 66 and the husband 78 years of age.
The wife lives alone at C in rented accommodation and holds a full time position as an Administration Officer at B/L Hospital. The wife had three daughters from her earlier marriage, one of whom died suddenly very shortly before this hearing. The wife has been on long service leave, which she says she may extend as a result of her daughter’s death. The wife said as a result of her daughter’s death, she will probably retire within “a couple of months.”
The husband lives alone in the parties’ jointly owned home in N and has been retired from full time employment since approximately mid 1996, although he has had other shorter term employment since then.
At hearing, the parties were in dispute about how their assets should be divided. The husband sought an order that the wife transfer her share in the N property to him. The wife sought an order that the parties sell the N property and divide the proceeds equally between them. Each party agreed to otherwise keep the items held by each of them, including superannuation entitlements.
The husband became emotional when answering questions about the possible sale of the N home. The husband said although the N home has 3 bedrooms and is “too big for me”, he is very settled there with “lovely neighbours and an established garden.” The husband has not used the N property for income purposes, though has offered accommodation free of charge for a few months to women in need through an organisation known as N Neighbour Aid. The husband said he was able to borrow approximately one third of the value of the property. The husband is dependent on pensions from the United Kingdom and Australia and a small superannuation pension.
Although each party had difficulty at times recalling financial events, I found each party truthful.
Issues
The approach to the determination of an application under section 79 of the Family Law Act 1975 is well established by authority [1] and involves consideration of these questions:
[1] In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595; Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FLC 93-143
a)What were the assets, liabilities and financial resources of the parties and their values at the time of hearing?
b)What were the financial and non-financial contributions made directly or indirectly by or on behalf of each party to the acquisition, conservation or improvement of the property of the parties?
c)What was the contribution made by each party to the welfare of the family including contributions made in the capacity of homemaker or parent?
d)What is the effect, if any, of any proposed order upon the earning capacity of each party?
e)What matters referred to in sub-section 75(2) of the Act are relevant and what adjustment, if any, should be made as a result of these factors?
f)Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
g)After consideration of these matters, is it just and equitable to make the actual orders?
What were the assets, liabilities and financial resources of the parties at the time of hearing and their values?
The parties agreed on the value of the non-superannuation assets and the liabilities held by each of them. The significant non-superannuation asset is the parties’ jointly owned property at N, in which the husband is living. The parties agreed on the division of their chattels and I made an order in accordance with that agreement on 30 October 2007. Those household items have therefore been excluded from the net asset pool to be divided. The parties agreed to exclude their modest bank account savings and their current debts from the net asset pool to be divided, all of which accrued after their separation.
As neither party paid any legal fees from funds accrued prior to separation, neither party sought to add back legal fees.
In relation to the wife’s superannuation entitlement, although the parties agreed on the value of the entitlement the wife currently holds, the wife said that she intends to withdraw some of the funds from her superannuation entitlement to acquire certain items and to meet certain debts and obligations. She said she will then commute the lump sum remaining to a fortnightly pension which she estimates will be $336 per fortnight. The wife said that she has purchased a car for which she owes $28,000; that she intends to purchase a bed for $7,000; that she intends to pay her debts totalling $11,563; and must pay her legal fees. Although I have no reason to doubt the wife intends to buy a car and a new bed from her superannuation funds, I am not satisfied it is appropriate to deduct these amounts from the wife’s superannuation entitlement. If these amounts were deducted, the value of the assets would also need to be included. There is no evidence before me as to the value of these assets. As the husband must also meet his legal fees and pay his other debts, and the parties agreed not to include their post separation debts in the net asset pool to be distributed, I am not persuaded those debts of the wife should be included.
[4] Exhibit 7.
In relation to the husband’s superannuation entitlements, at the outset of the hearing, the wife claimed the husband had not fully disclosed his position. The wife said the husband had not disclosed the superannuation entitlement he must have received as a result of his employment with the Public Trustee. In cross-examination, the husband denied any failure to disclose any superannuation interest to which he was or had been entitled. He said he received $1,843.40 in April 2003 from TWUSuper through the Lost Members Register [2] but could not say from which employer that entitlement arose. He could not recall any superannuation entitlement accruing from his employment with the Public Trustee. A letter was tendered from the husband’s solicitor to The Public Trustee dated 27 June 2005 [3] enquiring about amounts paid to the husband during the course of his employment and as a result of the termination of his employment.
A letter was also tendered from The Public Trustee in response dated
4 July 2005[4]. On the basis of those documents, I find the husband was employed by The Public Trustee from October 1989 until August 1994 when he was not made redundant, but rather, he retired.
A Statement of Termination Payment [5] reveals a payment to the husband of $26,247.59 on 23 August 1994 from the State Authorities Superannuation Board. I accept the husband’s solicitor’s submission that this amount, assumed by the husband to have been a redundancy payment, was in fact, a payment of superannuation. I am not persuaded the husband has any superannuation entitlements which have not been disclosed.
[5] Exhibit 9.
[2] Exhibit 5.
[3] Exhibit 7.
Each party’s representative submitted the court should follow a one list approach to the non-superannuation and superannuation assets, rather than the two list approach favoured by the Full Court in Coghlan & Coghlan[6]. Most of the wife’s superannuation was accumulated during the parties’ period of cohabitation and after separation, and the funds are unrestricted given the wife’s age. The wife said she intends to retire in the near future and to draw on her superannuation to meet current obligations. The husband withdrew most of his superannuation during the course of cohabitation, and the modest pension to which he is now entitled cannot be taken as a lump sum. The majority of the Full Court in Coghlan & Coghlan [7] said there is no binding principle as to the exercise of the Court’s discretion in deciding which approach should be adopted:
Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as ‘the first step’ in the determination of proceedings under s79, whether or not a splitting order is sought in those proceedings.
[6] (2000) FLC 93-220
[7] At 79,645.
In the circumstances of this case, I find it appropriate to adopt an integrated approach to the superannuation and non-superannuation assets of the parties.
I find the assets and liabilities available for distribution between the parties are as set out in the following table.
| Assets and liabilities at the date of hearing | $ |
| N property | 270,000.00 |
| Husband’s Ford Falcon motor vehicle | 1,000.00 |
| Wife’s motor vehicle | 1,000.00 |
| Wife’s jewellery | 2,000.00 |
| Wife’s IAG shares | 300.00 |
| Total non-superannuation assets | 274,300.00 |
| Wife’s superannuation | 201,422.00 |
| Total superannuation assets | 201,422.00 |
| Total net assets including superannuation | 475,722.00 |
Contributions
The court must consider the contributions in an overall sense both before and after separation. However, the authorities make it clear there is more than one way to approach the question of contributions, particularly when there is a significant period between separation and trial, as in this case.
In the Full Court decision of Wilkinson & Wilkinson[8], there was a period of 6 years between separation and hearing. The Full Court there said the Trial Judge was in error in failing to give weight to the increase in the value of the husband’s superannuation between separation and trial. The Full Court said[9]:
“this error illustrates that it may well be useful for an asset by asset approach to be employed in cases where the parties have significant superannuation interests, particularly where there has been a relatively long period of time between separation and trial…”
[8] (2005) FLC 93-222
[9] At paragraph 26.
In the Full Court decision of Illett & Illett[10], there was a period of 9 years between separation and trial. The husband’s superannuation interest grew from a few thousand dollars at separation to $90,000 at trial. The wife’s interest grew from almost nothing to $30,000. While endorsing the Trial Judge’s approach to contributions on an asset by asset basis, the Full Court held each party’s overall post separation contributions must be separately assessed.
[10] (2005) FLC 93-221
The parties in this case lived together for approximately six and a half years and have been separated for more than 12 years. The parties have each made contributions during this lengthy post-separation period. I have therefore given separate consideration to the parties’ contributions during cohabitation and after separation before assessing each party’s contribution entitlement overall.
The question then arises as to whether the court should approach the assessment of contributions on an asset by asset basis or on a global basis. In Norbis v Norbis[11], the High Court held that it is open to the court to assess contributions on either an asset by asset basis, or on a global basis. In this case, each party had assets at the commencement of the relationship and each has made substantial contributions during the period of cohabitation and since separation. Neither party adduced evidence as to the value of the assets held by them at the date of separation. In these circumstances, and in the absence of submissions from either party’s representative on the issue, I have decided to approach the question of contributions on a global basis.
[11] (1986) 161 CLR 513
Financial and non-financial contributions during cohabitation
It was common ground that the wife owned the W Property , subject to a loan secured by way of mortgage, when the parties started living together in 1988. Neither party adduced valuation evidence of the W Property as at the date of cohabitation. The wife adduced no documentary evidence in relation to the balance of the loan on the W Property at the date of cohabitation. The wife and her former husband, who died in December 1985, had owned the W Property jointly since 1970 and the wife became the sole owner upon her first husband’s death. The wife said the amount she paid to discharge the debt in August 1996, 8 years after cohabitation commenced, was $8,100.
The parties agreed the W Property had an estimated value of $75,000 at the date of cohabitation. The husband said the property was run down, the garden overgrown, and the kitchen cabinets in a poor state of repair. The husband’s solicitor submitted the court should accept the property was subject to a mortgage of approximately $9,000 at the date of commencement of cohabitation, and that the wife therefore contributed a property with a net value of approximately $66,000. The wife did not take issue with this estimate. The husband said at the date of cohabitation, the wife also owned a 1984 Holden Camira, household furniture and chattels, and jewellery. However, he did not provide an estimated value of what the wife owned at that time. The wife adduced no evidence as to other items she owned at the date of cohabitation. The wife said she had made voluntary payments into superannuation from the time her first husband died in December 1985, but adduced no evidence as to how much she contributed, or for how long she made those contributions. Given the paucity of the wife’s evidence on these issues, I give no weight to her initial contributions with the exception of the W Property. I take into account that the wife made an initial contribution of the property at W Property with an estimated net value of $66,000.
The husband said at the date of cohabitation, he owned household furniture and chattels, a Toyota Forerunner motor vehicle, and savings of $5,000. He said he sold the Toyota for $14,000 approximately a year later, however he gave no evidence as to how those funds were used. The husband adduced no evidence as to the value of his superannuation entitlement at the date of commencement of cohabitation. However, it was common ground that the husband commuted part of his superannuation pension entitlement to a cash payment after tax of $111,451, a year after cohabitation began. As a result, he said his pension entitlement was reduced by approximately one third.
The husband said he invested the $111,451 into improving the W Property a year after the parties commenced cohabitation. The husband’s solicitor submitted this contribution should be treated as an initial contribution, given its proximity to the date cohabitation commenced and given how the funds were used. The wife did not accept the husband contributed the whole of the $111,451 to renovations as claimed by the husband. However, given the husband was able to explain how $103,478 was spent, verifying most of this amount with documents, the wife, at hearing, accepted that the husband contributed $103,478 to renovations on the W Property a year after cohabitation commenced.
The weight to be afforded to initial contributions was comprehensively discussed in Pierce & Pierce[12]. The Full Court in the recent decision of Williams & Williams [13] affirmed the principles in Pierce. The Full Court in Pierce said[14]:
‘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 other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution… regard must be had to the use made by the parties of that contribution.
[12] (1999) FLC 92-844 at 85,881
[13] [2007]FamCA 313
[14] At 85,881 in paragraph 28.
The facts in the present case are unusual when considering the use made by the parties of their initial contributions. The wife contributed the W Property, and the husband contributed the funds for the improvements to the W Property a year after cohabitation commenced. Each party’s contributions related directly to the W Property. In 1996, seven years after cohabitation commenced and after separation, the wife sold the W Property for $145,000 and the parties used most of the net proceeds of that sale to purchase their jointly owned property at N for $135,000. This means that the wife’s initial contribution, and the husband’s contribution a year later, being $66,000 + $103,478, resulted in a net loss to the parties. The wife sold the W Property to her daughter and son-in-law. The husband said he did not know the sale price of the W Property at the time of sale. Neither party adduced evidence as to fluctuations in the market at W Property between the time of renovation and sale, and neither adduced evidence as to whether $145,000 was the market value of the property at the time of sale or whether the property was in fact sold under market value. It may be the parties over-capitalised.
Each party worked at B Hospital when they started living together, the wife in administration, the husband as a security guard. The husband was also in receipt of an invalidity pension from State Super as a result of retirement from his employment with the Department of Corrective Services in October 1983, indexed to CPI. The wife was also in receipt of a pension as a result of her husband’s death. At the time the husband commuted part of the pension to a lump sum in August 1989 his gross pension was $680 a fortnight. Following the commutation, the husband said he received a pension of $221 per fortnight indexed to CPI.
The wife and the husband continued to work full time during the course of their cohabitation. The wife adduced no evidence as to what she earned during cohabitation. The husband adduced no evidence of what he earned between 1988 and 1991. The husband had a taxable income of $32,512 in 1992, $34,460 in the 1993 financial year and $46,341 in the 1994 financial year[15]. Although he deposed to the taxation returns of 1992, 1993 and 1994 being annexed to his affidavit, they were not part of the bundle annexed to his affidavit on the Court file. Given the lack of income evidence from the wife, I am unable to say which party contributed the most income during the period of cohabitation.
[15] Exhibit 6.
The parties first lived together in a property rented by the husband in CA. The wife said the husband paid the rent and utilities while she paid for food and household supplies and occasionally bought the husband clothing. She said she gave the husband $800 to meet legal fees in relation to the husband’s divorce.
When the wife moved to CA, two of her daughters lived in the W Property and the wife continued to pay the loan repayments of $50 a month and to buy food and household supplies, as well as pay the bills for the W Property. The wife said the husband did not directly provide financial support to her children, although he paid the telephone accounts.
In 1989 the parties commenced renovations to the W Property to enable them to live on the lower floor, and the wife’s daughters to live on the top floor. For financial reasons, the parties moved back to the W Property before the painting was done and the carpets laid. The wife said she and her daughters painted the bathrooms but the tiling, carpets and curtains were not put in until after she sold the property.
The parties were in dispute as to how they managed their finances during the relationship. The wife said the parties kept their finances separate, with the exception of a short period when they had a joint account. The husband said the parties established a joint account when they married and that he paid his wages and pension into that joint account to which he and the wife had access for living expenses. He could not recall for how long the account was open though recalled contributing his lump sum superannuation to a joint account. I make no finding on this issue as I am not satisfied it is relevant.
In the absence of any evidence to the contrary, on the authority of Parshen & Parshen[16], I assume the husband contributed his income to the benefit of the parties. The wife said she supported her two daughters who were teenagers at the time the wife’s first husband died. She did not say for how long she provided her children with financial support. The wife’s contribution to the care of her children from her previous relationship cannot be taken into account as a factor in her favour [17] and I find her contributions to her children must have, to some extent, reduced the funds she had available to contribute to the parties.
[16] (1996) FLC 92-720
[17] Robb and Robb (1995) FLC 92-555
In 1993 the husband received a payment of $11,754 from an insurance policy with GIO[18] which he said he used in part to pay the airfares to visit his daughter in the United States, a sum of approximately $1200. He could not recall how he applied the balance.
[18] Page 17 in schedule of exhibits to husband’s affidavit sworn 3 August 2006.
In August 1994, the husband received $26,247 in cash from a superannuation fund as a result of his retirement from The Public Trustee. He did not adduce any evidence as to how those funds were applied.
On the basis of the wife’s evidence that she commenced making voluntary contributions to superannuation from the time her first husband died, and on the basis that the superannuation guarantee legislation came into force in Australia in 1992, I am satisfied the wife accrued superannuation during the course of the parties’ cohabitation. As the wife produced no superannuation documents for the hearing, I am unable to make a finding as to the level of her contribution to superannuation during cohabitation.
The wife said she did all the cooking, cleaning and washing while the parties lived at the W Property. The husband said he undertook
most of the work involved in establishing and looking after the garden, including mowing lawns and maintenance work. While acknowledging that the wife did more of the washing, ironing and cooking, the husband said he also played a domestic role.
In a short marriage, it is particularly important to give close attention to the assessment of contributions whether of a financial or non-financial kind and to carefully evaluate the contributions of each party[19]. It is necessary to weigh the initial contributions of each party with all other relevant contributions made by each of them. The husband’s solicitor submitted that the husband’s contributions during cohabitation were greater than those of the wife, because the husband made the greater initial contribution in dollar terms, when the cash funds from his superannuation fund invested a year after cohabitation are taken into account. However, in the circumstances of this case, in which the wife contributed approximately $66,000 in net property and the husband contributed slightly over $100,000 a year later into the same property, resulting in a net loss to the parties seven years later, I am not persuaded that initial contributions favour one party over the other.
[19] See Quinn and Quinn (1979) FLC 90-677; Bushby and Bushby (1988) FLC 91-919 at 76,667.
Given the limited nature of the evidence, particularly from the wife, in relation to the parties’ direct financial contributions during the course of cohabitation, I am not persuaded there is any basis for a finding that one party made greater contributions than the other up to the date of separation.
Financial and non-financial contributions after separation
The parties separated more than 12 years before hearing. Neither party adduced clear evidence as to the value of each party’s assets at the date of separation. However, it is common ground that just over a year after separation, in August 1996, the wife’s property at W Property was sold to her daughter and son-in-law for $145,000 and at the same time, the parties purchased the N Property as joint tenants for $135,000. Neither party had other non-superannuation assets of significant value.
Each party continued to work full time after separation, though the husband for only a year or so.
The wife did not adduce evidence as to what she earned in the years after separation but in July 2006 deposed to receiving $360 a week in wages, as well as $334 a week from her deceased husband’s pension fund, an income of $36,088 per annum. The wife is supported currently by her income from employment and the same pension. She has not yet retired.
The husband produced his income tax returns for the financial years ending 1995 to 2006. He had a taxable income in the range of $32,813 to $9,389 in the financial years ending 1995 to 2006[20]. The husband said he has not been in paid employment since the 2000 financial year, with the exception of the work he has undertaken for the 2006 Census for which he received approximately $1400[21]. Since he has been 65 years of age, the husband has received an aged pension from the United Kingdom, which reduces his entitlement to a Centrelink benefit on a dollar for dollar basis. The husband is currently supported by an aged pension and a small superannuation pension.
[20] Pages 18 to 174 in schedule of exhibits to husband’s affidavit sworn 3 August 2006.
[21] Pages 175 to 176 in schedule of exhibits to husband’s affidavit sworn 3 August 2006.
Although the wife adduced no evidence as to income, I am satisfied the husband earned significantly less than the wife after separation.
The husband moved to the N property in March 1997, approximately 7 months after its purchase. By then, the wife had been living in rented accommodation for a few months. The husband has remained living in the N property with the exception of a 9 month period in 1999/2000, when he worked as a caretaker in Sydney. The husband said the wife initially spent most weekends at N, but the visits became fewer over the years. The husband said from 2001 the wife visited infrequently, and in April 2003 her visits stopped altogether. The wife said she spent a lot of time at N until 2001 and stopped staying there altogether in 2004.
The parties’ evidence as to how expenses were paid on the N property was not consistent, but neither party’s legal representative challenged the other’s assertions on the issue. The wife said she paid the stamp duty of $3,217 on the purchase and council rates for the first 2 years. She said she engaged the services of Jim’s Mowing to do the lawns for 4 years. She said she purchased furniture, carpets, kitchenware, linen, ornaments, curtains and fans with a loan of $16,000 from the ANZ Bank secured on the property. There is no evidence before me to enable me to make a finding as to what items purchased by the wife are now in her possession.
The husband said the wife bought security screen doors, carpets and a television unit for the property. The mortgage document securing the $16,000 loan is in the joint names of the parties [22], but the wife said she repaid the loan with interest in an amount of approximately $22,000. The husband said he has paid the council rates of $800 a year, water rates and utilities, and the maintenance and repair costs associated with the N property including re-tiling the bathroom.
[22] Annexure E to wife’s affidavit sworn 10 October 2007.
Each party said he/she paid the moving expenses from W Property to N. As the expenses were modest, I am not satisfied a finding on this issue is necessary.
In February 1999 the husband took part of his fortnightly pension as a lump sum of $25,001.86 [23] which he used to either buy a car or repay a loan on a car. There was some dispute between the parties as to whether the husband bought a Calais or a Jeep with those funds. The husband said he bought a Calais which was “a bomb” and then a Jeep which he later gave to his son, subject to finance, as he could not afford the repayments. He said he believed he then bought a 1990 Ford Falcon for approximately $8,000. The husband now has a Ford Falcon with a value of $1,000. I am not satisfied the husband made a contribution of $25,006 or any part of these funds to increasing the value of any other assets of the parties.
[23] Exhibit 8.
In June 2003 the husband borrowed $15,190 from Westpac by way of a personal loan [24] which increased to $22,272 in February 2005[25]. He could not recall precisely how he used the borrowed funds. He believed he applied part of the loan towards the purchase of the Ford Falcon, part towards the purchase of a fridge and television set, and $2,000 towards the cost of two sheds on the property. The rest he believed must have been used to meet general living expenses. The husband owed the sum of $17,000 as at November 2006[26]. The husband said he has drawn another $4,000 at the end of 2006 to meet the costs of car repairs and general living expenses, but currently owes Westpac Bank approximately $17,000. As already noted, each party will take responsibility for his/her own debts. I am not satisfied these loan funds have increased the parties’ asset position.
[24] Pages 177 to 181 in schedule of exhibits to husband’s affidavit sworn 3 August 2006.
[25] Pages 182 to 185 in schedule of exhibits to husband’s affidavit sworn 3 August 2006.
[26] Exhibit 4.
The wife kept the dog, originally owned by the husband at separation. The wife said she has paid veterinary bills of approximately $7-8,000 and as a result of a tumour, the dog required constant medical attention. The wife annexed to her affidavit a number of accounts from the vet. In cross-examination, the wife conceded that she decided to keep the husband’s dog. The wife would have had a number of options in relation to the dog, but said she chose to keep it. I am not satisfied the wife’s contributions to the dog’s expenses is a contribution that should be taken into account.
The wife has lived in rented accommodation since 1996 and continues to do so. The husband has lived rent-free in the parties’ N property since March 1997, a period of nearly 11 years. Although the wife adduced no evidence as to the rental value of the N property, I am satisfied the wife’s decision to permit the husband to remain rent free in their jointly owned home is a contribution by the wife to which I must give substantial weight.
Neither party adduced evidence as to what each party was entitled to by way of superannuation at the date of separation. I am therefore unable to make a finding as to the level of growth in either party’s superannuation after separation. In particular, I am unable to make a finding as to the amount of growth in the wife’s superannuation entitlement after separation, a finding which is likely to have been significant to the wife’s case.
In assessing each party’s contributions to superannuation, I have had some regard to the relationship between the years of fund membership and the years of cohabitation. The Full Court in Coghlan & Coghlan[27] said in considering contributions of all kinds “the relationship between years of fund membership and cohabitation may well be relevant.” In the present case, the wife said she started making voluntary superannuation contributions after her first husband’s death in December 1985. This means she has been in the fund 22 years. For the past 15 years, the wife’s employer has made compulsory contributions to her Fund in accordance with the Superannuation Guarantee legislation introduced in 1992. The parties lived together for only six and a half years.
[27] (2005) FLC 93-220 at 79,646
The husband has taken most of his superannuation, receiving a small pension from the State Super Fund, in addition to an aged pension.
I am satisfied the wife has made significantly greater financial contributions than the husband since separation, particularly in relation to her superannuation entitlements and as a result of the husband living rent free at N.
I accept the husband’s unchallenged evidence that he has done the majority of the maintenance on the N property since he has lived there.
What is the effect, if any, of any proposed order upon the earning capacity of each party?
The proposed orders of both parties will have no effect on the earning capacity of each party.
Findings on contributions
As already noted, I have assessed the parties’ overall contributions to the date of separation as approximately equal. I have also decided that the wife’s contributions, both financial and non-financial, have been significantly higher than the husband’s since separation. I take into account that the period of the parties’ separation is almost double the period of the parties’ cohabitation. On a weighing of all these factors, I have assessed the wife’s contributions at an overall 72% of the net asset pool and the husband’s at 28%.
What matters referred to in sub-section 75(2) of the Act are relevant?
I have considered each of the relevant factors listed in s.75(2) of the Act.
The wife is 66 and the husband 78 years of age. There was no evidence before me about the husband’s health. The wife said “my health is not very good” “I have a stone in my gall bladder which needs to come out” “I have the blood disorder and blood pressure” “I am experiencing carpel (sic) tunnel problems causing pain when I am sitting at my computer”. However, the wife did not adduce any admissible medical evidence as to the impact of these problems on her capacity for employment, the likely financial impact of these problems or whether any of these conditions might affect her lifespan. I am not persuaded there should be any adjustment in favour of the wife as a result of health issues.
The wife will retire soon. I found the wife’s failure in these circumstances to adduce any evidence as to her retirement entitlements, unsatisfactory. The wife agreed that in January 2005 she was entitled to 9 months 4.5 days long service leave [28] but said that she intended to take any leave entitlements before retirement. I am satisfied that after 25 years of public service at B Hospital, the wife is likely to have substantial entitlements upon retirement and I regard her failure to adduce evidence on this issue, a significant omission and a failure to provide full and frank disclosure. I make an adjustment in favour of the husband as a result of these factors.
[28] Exhibit 2.
The wife is already beyond the usual retirement age. I accept her evidence that she intends to retire soon and that after payment of her debts, expects to have a fortnightly pension from her superannuation entitlement of approximately $336 per fortnight. This is in addition to her indexed pension of approximately $18,000 per annum that she receives as a result of her first husband’s service in the armed forces. The husband receives the equivalent of the Australian aged pension, made up of a small pension from the United Kingdom and a part aged pension from Centrelink. In addition, he receives an indexed pension from State Super with a current annual value of just over $6,000. I am satisfied that the wife will have a higher income than the husband after her retirement, although each party will live modestly. Given the husband is 12 years older than the wife, I am not persuaded it is appropriate to make any adjustment in favour of the husband as a result of this disparity in income.
Each party has credit card debts and the wife has in addition, an AGC debt. At the date of hearing, the wife disclosed debts amounting to $11,563 and the husband to debts amounting to $17,000.00. Each party owes legal fees. I make no adjustment as a result of this issue.
The wife’s counsel submitted there should be no adjustment or only a small adjustment in favour of the husband for s.75(2) factors, but that the wife should receive 71% of the net assets including superannuation. This would give her half the sale proceeds of the N property as well as her superannuation and other items in her possession.
The husband’s solicitor submitted the husband was entitled to a higher percentage than the wife on contributions and an adjustment in his favour pursuant to s.75(2) factors such that he receives 57-58% of the net assets which would give him the N property.
I find it appropriate to make a 3% adjustment in the husband’s favour as a result of s.75(2) factors.
This means the wife will receive an overall 69% of the net asset pool, and the husband 31%.
Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
This issue is not relevant in this case.
Is the result just and equitable?
Section 79(2) 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.
As already noted, the parties have a net asset pool of $475,722. For the wife to receive 69% of the net assets of the parties, the wife must receive $328,248.18 of that pool. The wife already has her motor vehicle, shares, jewellery and her superannuation entitlement. This means she needs a further $123,526.18 to receive her entitlement.
The wife will have assets and liabilities set out in the following table:
| Assets to be retained by wife | $ |
| Wife’s motor vehicle | 1,000.00 |
| Wife’s jewellery | 2,000.00 |
| Wife’s IAG shares | 300.00 |
| Wife’s superannuation | 201,422.00 |
| Payment from husband or from sale of N property | 123,526.18 |
| TOTAL | 328,248.18 |
The husband will have the assets and liabilities set out in the following table:
| Assets to be retained by husband | $ |
| Husband’s Ford Falcon | 1,000.00 |
| N property | 270,000.00 |
| Payment to wife | (123,526.18) |
| TOTAL | 147,473.82 |
The husband is 78 years of age. He has lived in the parties’ N property for over 10 years. He is settled there. The husband said he could borrow a third of the value of the N property by way of reverse mortgage, which is approximately $90,000. He must pay the wife $123,526.18, a substantially greater sum. In these circumstances it is likely the N property will have to be sold. However, I have decided to give the husband the option of paying the wife the amount to which she is entitled. If he is unable to make the payment before the end of March 2008, the N property will be sold. If the property is sold, the husband will receive 31% of the assets, excluding the N property from the net sale proceeds, (an amount of $63,773.82 less $1,000, being the Falcon he will retain) before the balance of the sale proceeds is divided as to 69% to the wife and 31% to the husband.
I am satisfied that the orders set out at the beginning of these Reasons are just and equitable.
I certify that the preceding seventy six (76) paragraphs are a true copy of the reasons for judgment of <name> FM
Associate: Skye Owen
Date:
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