White and White - [2012] FMCAfam 437

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WHITE & WHITE

[2012] FMCAfam 437

FAMILY LAW – Property – Application for property settlement – assessment of contributions – assessment of future needs – just and equitable.

Family Law Act 1975, ss.75(2), 79(4)

Hickey & Hickey & Attorney-General [2003] FamCA 395
Pierce & Pierce [1998] FamCA 74

Applicant:

MS WHITE

Respondent:

MR WHITE

File Number:

SYC 4545 of 2009

Judgment of:

Altobelli FM

Hearing dates:

3 and 4 May 2012

Date of Last Submission:

4 May 2012

Delivered at:

Sydney

Delivered on:

8 May 2012

REPRESENTATION

Counsel for the Applicant:

Mr Maurice

Solicitors for the Applicant:

Christopher Levingston & Associates

Counsel for the Respondent:

Mr Jackson

Solicitors for the Respondent:

APJ Law

ORDERS

THE COURT ORDERS THAT:

Within 60 days hereof the Husband pay to the Wife the sum of $205,292.
Upon compliance with Order 1 the Wife shall do all acts and things required to be removed as a beneficiary of the White Family Trust.
In the event that the Husband does not comply with Order 1 within 60 days hereof the Applicant, First and Third Respondents shall cause the property known as Property G Road, (omitted) NSW to be sold for the best attainable market price and after payment of all necessary and reasonable sale costs and the discharge of any liability encumbering the title of the property shall pay to the Wife the sum referred to in Order 1 together with interest as prescribed in the Federal Magistrate’s Court Rules and with the balance to be paid to the Husband.
Subject to these Orders each party otherwise is declared solely entitled to all other property and resources in their respective possession and control.
Each party indemnify the other with regard to any liability attaching to any asset to which they are entitled pursuant to these Orders.
All parties do all acts and things necessary to fully implement these Orders.
In the event of either party failing to execute any document required to give effect to these Orders within 7 days of being requested to do so by the other party, the Registrar or a Deputy Registrar of the Court shall be empowered pursuant to s.106A of the Act to execute such document on behalf of and in lieu of the party in default.
Each party have liberty to apply on seven days notice to the Court and to the other party in relation to the implementation of the foregoing Orders.
Any party wishing to seek costs should do so by way of written submissions not greater than 500 words with the Applicant to submit the same within 21 days and the Respondent within a further 14 days.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYC 4545 of 2009

MS WHITE

Applicant

And

MR WHITE

Respondent

REASONS FOR JUDGMENT

I provide the following oral reasons in the matter of White & White – an application for property settlement that I finished hearing on Friday, 4 May 2012. In this case, the wife is the applicant. She is 65 years old, lives in (omitted) and is an invalid pensioner. The respondent is the husband. He is 66 years old, lives in (omitted) and describes himself as a “retired (occupation omitted)”.
The husband and wife commenced cohabitation on marriage in 1972 and this marriage broke down on separation in 2001. They were together for a period of about 29 years and have three adult children. Physical separation probably did not take place till about 2005.
The case was conducted on behalf of both the husband and wife on the basis that 2001 and not 2005 was the date of separation for section 79 purposes. No one asked me to find that in the period of 2001 to 2005, the finances were mingled or that there was some joint purpose in any of the financial transactions. I therefore accept the 2001 as the date of separation for all purposes relevant in the present context.
Before making some findings and discussing the evidence I will briefly state the applicable law. I consider that the applicable law is as set out in a passage from the Full Court’s decision in Hickey & Hickey & Attorney-General [2003] FamCA 395, where the Full Court states that there are four interrelated steps that involve identifying and valuing the property, identifying and assessing contributions, identifying and assessing the other factors under section 79(4) and then finally considering the effect of the above and resolving whether it is just and equitable.
I think the other highly significant and relevant decision is that of the Full Court in Pierce & Pierce [1998] FamCA 74 which discusses how I should weigh and assess diverse initial or early contributions made by one party to the marriage and I will incorporate a number of paragraphs from the Full Court’s decision in Pierce & Pierce [1998] FamCA 74. In short, I think that authority says that I must not only identify the contributions of each party but also assess the weight to be attributed to these contributions, having regard to many factors including what has occurred after the contribution was made.
The evidence before me was primarily affidavit evidence from the husband and the wife. As it turns out there were minimal valuation issues and I will make reference to those. I was also greatly assisted by some written submissions and outlines by counsel for both the husband and the wife.
The major issue in this case is assessment of contribution and then assessing section 75(2) factors. The fact is that the husband and wife started out with next to nothing and rented a flat at (omitted) for 18 months before moving to a property in (omitted), owned by the husband’s father. They lived there for 17 years without paying rental and this is the first of some significant contributions made through the husband.
During this time however, they did considerable renovations and landscaping at their costs. The wife clearly contributed to this directly and indirectly, financially and non-financially. During this 17 year period there were times when both the husband and the wife worked and did not work and where their contributions may have been different in a way but I am satisfied all of the diverse contributions made by the husband and the wife during this period were made or directed to the common goal of the good of their family.
In 1991, the husband’s father caused the (omitted) property to be sold. I am satisfied from the evidence that the husband and the wife had the benefit of $380,000 from the sale of this property which was, in effect, gifted to them by the husband’s father. They used this money to purchase a home at Property S for about that amount. This is the second of the significant contributions made by or through the husband.
It is by no means his sole contribution as the wife worked for many years to preserve, maintain and improve that property but ultimately it was the husband’s father’s generosity which created a significant benefit for them. If not for the relationship between the husband and his father it would not have been so.
From about 1998, the relationship started to deteriorate. The husband’s health also deteriorated. In September 2006, the family moved to the Property G property. It was purchased at 2006 using money provided by the husband’s mother, about $250,000. This is the third of the significant contributions made by the husband. This does not minimise the diverse and valuable other contributions made by the wife over many years, but it is to differentiate the financial contributions made by each of them.
In March 2002, Property S was sold for $655,000; netting $295,000 which went into the wife’s bank account. In June 2004, the husband received the proceeds of a wrongful dismissal claim as against his previous employer. He received $100,000 net. This is the fourth of the substantial contributions made by or through the husband.
That year, he used this money to purchase a property at Property M in the wife’s name. Curiously, despite this being after the agreed date of separation, he nonetheless put this property in the wife’s name. This was sold in 2009 for about $200,000 and each received about half the net sale proceeds. That is about $94,000. Neither party sought to add back into the property settlement this money. It may well be reflected in savings they each have. It is not possible for me to discern this from the evidence but that is how they have chosen to present this case and I am bound by that.
In 2002, the husband suffered a mental breakdown. He made a claim under his AMP Total and Permanent Disability Insurance cover. In 2007, he received nearly $260,000 – half of which went on legal fees. The claim was only faintly made at the hearing that the wife had somehow contributed to this and for all practical purposes the issue was conceded by the wife’s counsel in closing submissions. It is hard to see how the wife contributed in circumstances where the claim seems to have been based on an episode in the husband’s health that occurred after the agreed date of separation.
In any event, in 2005, physical separation took place with the wife moving from Property G to (omitted). In 2007, the husband received an inheritance from his late mother’s estate which at that time was worth just over a million dollars. In 2009, the wife received the (omitted) property by way of inheritance from her late mother after a contested Supreme Court claim. Its value at the time was 1.1 million dollars.
Both counsel for the husband and the wife submitted, in substance, that there should be three pools of assets. I acknowledge that Mr Jackson, for the husband, technically submitted that there should be two pools – one for the inheritance and one for non-inheritances but the effect of his submission about cocooning is the same as if the Court simply treated the assets in three pools and I think that is a much clearer way of dealing so.
Accordingly, there are three pools: Pool A which consists of matrimonial property, Pool B which consists of the husband’s inheritance and his AMP claim and Pool C which contains the wife’s inheritance. Despite slight differences of approach between the husband and wife’s counsel, I am satisfied it is on the facts of this case, appropriate to deal with this section 79 adjustment on that basis. However, an issue arises as to when these pools should be valued.
I hold that pools B and C should be valued at the date of the receipt, by the husband and the wife respectively and not subsequently or currently. To do anything else is not just and equitable because of the significant effluxion of time and the impossibility on the evidence before me of unscrambling how assets, clearly in existence at a finite certain time, had been used between that date and today, let alone, the issue of the reasonableness of that use.
I will say more about this below, in the context of discussing whether the order is just and equitable.
On that basis the value of Pool B should be as follows: The husband’s inheritance as per paragraph 101 of his affidavit of 26 April is $1,060, 467 and then the husband’s permanent disability payout as per paragraphs 81 to 82 of his affidavit, rounded up to $130,000. I do not accept the contention that the AMP payout should be the gross amount. As bizarre as the evidence that the husband is about paying one half of the gross payment to his solicitor, I ultimately accept that half was paid to the solicitor as he asserts. On this basis, therefore, the total value of Pool B is $1,190,467.
Pool C, consisting of the wife’s inheritance, is the value of (omitted) which is conceded at the time that the property was transferred to her. Hence, $1.1 million.
The issue is what should be in pool A. Despite my repeated requests to counsel to produce an agreed schedule of pool A assets it was left to me to do the best I could with the material before me. I find that pool A to be as follows: Firstly, the Property G property that is in substance owned by the husband through the trust with a value of $615,000 being an agreed value. Next, the husband’s bank accounts are $13,492. Again, an agreed value. Next, an add-back on the wife’s account of the partial property settlement pursuant to orders made by Her Honour, Justice Stevenson of $170,000. Again, I note there was no dispute there.
The next item is the husband’s Hilux Ute of $22,000. The husband’s household contents, $20,000. The husband’s equipment and machinery, $19,000. The husband’s funds held by (omitted), $60,000. The husband’s cattle, $24,088. The husband’s superannuation, $9333. The husband’s funds held in trust, $15,000. The wife’s St George bank account, $27,654. The wife’s IAG investment, $2,266. The wife’s Nissan motor vehicle, $6000. The wife’s household contents, $10,000. The wife’s funds held in trust, $16,812. On the basis pool A has a value of $1,030,645.
Now in relation to the superannuation of $9333, I note that whilst the wife accepts that this is what he has now she does not accept that this represents what the husband had at the relevant time. In relation to this superannuation the husband’s evidence was unconvincing and evasive in terms of his accumulation of superannuation and what happened to it. I do not accept that having regard to the evidence he himself gave about his work history that his superannuation was only $9333. I do not know how much it was. I will take this uncertainty into account as a section 75(2) consideration but I must say it does not seem to be a significant consideration having regard to the length of the marriage and the size of the asset pool. The husband seemed to struggle to recall detail at times in evidence. I would not go so far as to make or to draw adverse credit inference or make adverse findings against him but I do not think that either he or the Court knows what in fact happened to the superannuation.
I further note that the wife does not assert that the money that the husband has in (omitted) Investments should go into pool A and I presume that is because it is what is left over of the pool B asset. I will proceed on that basis. I am satisfied there are no relevant liabilities. The total value of the asset pool is $1,030,645.
I make this observation about the constitution of pool A. Apart from the uncertainty about the husband’s superannuation what goes into this pool was largely by agreement between the husband and the wife and their respective lawyers. They clearly must have satisfied themselves that no part of pool A represented any “leakage” from the other pools.
I turn now to assess contribution. In the ultimate result there was no compelling cogent reason advanced by any party that the other had somehow contributed to their respective pool. Even the wife’s attempt to argue a contribution to the husband’s AMP payment was advanced faintly and all but given up by final submissions. Indeed this must be the case. She says the date of separation was 2001. There is no challenge to this. He says the claim arose out of an event in 2002. There is no challenge to this. Neither party therefore made any contribution to the other’s pool. I therefore find that the husband contributed 100 per cent to pool B and the wife contributed 100 per cent to pool C.
In relation to pool A the wife submits it should be fifty-fifty. The husband submits sixty five-thirty five in his favour. The husband’s counsel’s written submissions in this regard were very helpful and I incorporate the same from paragraph 5 onwards. Clearly the husband made a greater financial contribution when his father gifted the money to purchase Property S and when his mother gave them $250,000. In addition, the husband and wife lived rent free for 17 years in the (omitted) property. The wife benefitted from the husband’s wrongful dismissal claim. Again, I do not minimise the work the wife did especially in relation to the renovations to the property but it would be wrong to characterise her contribution financially as equal even allowing for periods that the husband had off work.
The financial contribution referred to above and the non-financial contribution in relation to the provision of rent free accommodation is very significant. I accept that significant periods of time had gone by and that some of the financial contribution took place early in the marriage but I just cannot accept that it should be fifty-fifty as the wife asserts. I am satisfied that, doing the best I can so long after these events, that contributions should be assessed in the husband’s favour at 57.5 per cent and in the wife’s favour at 42.5 per cent. Accordingly, the husband’s 57.5 per cent share of pool A is $592,621 and the wife’s 42.5 per cent share of pool A is $438,024.
Now I note that based on the pool of assets as I found it, the husband already possesses assets to the value of $797,913 and the wife already possesses assets at a value of $232,732. This means that the husband would need to pay to the wife $205,292 by way of adjustment in order to reach the 57.5 percentage split.
Are there section 75(2) considerations? Both the husband and the wife are over 65. Both have health issues. Both have limited or no earning capacity. I accept there is some uncertainty as regards the disclosure of the husband’s superannuation but as against that each has access to substantial other assets or funds, namely, their respective pools of assets B and C. In the circumstances I cannot see a section 75(2) adjustment has to be made.
Finally I consider whether this is a just and equitable outcome. I believe that it is but not without hesitation. I am bound by the evidence before me and the way in which the case was presented. The husband and the wife must bear the logical consequences of a property settlement so many years after the date of separation. I would have been much more comfortable in my conclusion if it were possible to have better information about the current values of pools B and C but the Court is caught between a rock and a hard place. To look at current values involves consideration and evidence of what happened to these assets in the post separation period. It may well be the case, for example, that the value of both pools B and C are not today what they were at the date of acquisition.
Certainly there is some evidence to suggest that the value to the husband of pool B today is not the $1.1 million but the reality is that it becomes very difficult to establish a separate pool and in order to establish the value of a separate pool it then becomes unfair to sheet to consequences of any diminution of the value of that pool to the other side. The husband cannot say that the value of pool B today is not the $1.1 million because he says the wife did not in any event contribute to it. The question needs to be asked rhetorically: what does it matter that pool B may in fact be worth $2 million in circumstances where no contribution has been made to it.
The reality in this case is that a husband can readily fund payment of $205,292 to the wife. He might think it is unfair in circumstances where her pool C is bigger than his pool B or in circumstances where the partial property settlement of $170, 000 had to be funded out of his inheritance but ultimately all of this is accounted for in the adjustment. In short, if the husband had wanted for the court to consider the real current value of pool B, (that is, what’s left of his inheritance) he should not have presented the case as he in fact did. The order is just and equitable in the circumstances and it is no less just and equitable because of post separation acquisition of assets and fluctuations in value of the same. The husband sought orders that each retain what they have. For the reasons that I have set out above this cannot be just and equitable.

In terms of the orders that I propose to make I will work off the wife’s minute of orders as sought by her.
In order 1 the amount should be $205,292. I am satisfied that 60 days is a generous time period for payment.
Order 2 is not contentious.
Order 3 is sought by the wife. It lacks particularity but it is not for me to remedy technical defects in the drafting of the wife’s orders.
I decline to make an order 4. There is no evidence pertaining to this issue. Each should keep what they have in this regard.
Orders 5 and 6 are not needed.
Orders 7 to 11 are appropriate.
I make no order for costs at this stage but if a party wishes to seek costs it should be by way of written submissions not greater than 500 words with the applicant to submit the same within 21 days and the respondent within a further 14 days.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Date: 14 May 2012