Whiting and Lang
[2009] FMCAfam 747
•17 July 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WHITING & LANG | [2009] FMCAfam 747 |
| FAMILY LAW – Property – wife unable to locate husband to effect personal service – mortgagee in possession of former matrimonial home – modest property pool – undefended hearing. |
| Family Law Act 1975, ss.75, 79 |
| Mallett & Mallett (1984) FLC 91-507 Hickey & Hickey (2003) FLC93-143 AJO & GRO (2005) FLC 93-218 |
| Applicant: | MS WHITING |
| Respondent: | MR LANG |
| File Number: | DNC 538 of 2008 |
| Judgment of: | Terry FM |
| Hearing date: | 3 June 2009 |
| Date of Last Submission: | 3 June 2009 |
| Delivered at: | Darwin |
| Delivered on: | 17 July 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Norrington |
| Solicitors for the Applicant: | DS Family Law |
| Respondent: | No appearance |
ORDERS
That the net balance available to the husband and the wife as joint owners of Property [K] upon completion of the sale of the property by the mortgagee in possession be deposited into the DS Family Law Trust Account.
That the money deposited into the DS Family Law Trust Account pursuant to Order 1 be applied as follows:
(a)firstly, to discharge the personal loan from the Australian Central Credit Union Account Number [6];
(b)secondly, the balance remaining to be paid to the wife.
That unless otherwise specified in these orders, each party shall be solely entitled to the exclusion of the other party to all furniture, jewellery, motor vehicles and any other chattels or possessions of whatsoever nature and kind in the possession of that party as at the date of these orders, and that for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, insurance policies are deemed to be in the possession of the owner thereof and superannuation entitlements are deemed to be in the possession of the person whose employments or self-employment and contributions provide the conditions for a payment out of such superannuation entitlements.
IT IS NOTED that publication of this judgment under the pseudonym Whiting & Lang is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DNC 538 of 2008
| MS WHITING |
Applicant
And
| MR LANG |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Whiting and Mr Lang separated in September 2008. They had been married for about eleven years, and they have no children.
In December 2008 the wife filed an application for a property settlement.
The mortgagee is in possession of the former matrimonial home. The property pool is modest.
The wife proposed that she should receive the net proceeds of the sale of the home together with her car and the furniture. She proposed that the husband should retain the money he received from his superannuation funds between August 2008 and November 2008.
The husband has never been served personally with the wife’s application. He has never filed a response, affidavit or financial statement. It is convenient to first set out the background of the matter before turning to the issue of the wife’s attempts to serve the husband.
Background
The husband was 50 and the wife 46 when they commenced living together in 1997. When the parties met the wife was living at Property [K], which she was renting from the Northern Territory Housing Commission. After the commencement of cohabitation the parties lived at this property. They married in September 1997.
At the commencement of cohabitation the wife was employed [at occupation omitted].
The husband is an [occupation omitted]. No evidence was given about his employment in 1997 but during 1998 he was unemployed. In 1999 he went to India after securing employment there. In about February 2000 the wife joined him in India.
The parties separated in India in September 2000.
The wife said that at the time of separation the husband withdrew all the money from the joint bank account and disappeared. The husband was sacked from his job. He was located by the police. He and the wife eventually returned to Australia together.
The parties lived under one roof in Darwin but remained separated.
A few months later the husband went to Melbourne to work for [omitted]. After only a short period he went missing. The wife filed a missing persons report with the police. The police located the husband but he told them that he did not want the wife to know where he was.
Later in 2001 the husband contacted the wife and told her that he was in Alice Springs working for [N]. [N] closed their Alice Springs office shortly afterwards and the husband returned to Darwin to continue working for [N]. In late 2001 the husband and wife reconciled.
The wife had returned to work at [omitted] when she came back from India in 2000. She continued to work there until September 2005 when she was made redundant. Thereafter the wife stayed at home and was engaged in home duties.
In January 2007 the husband and wife purchased the [K] property from the Housing Commission. It was registered in joint names. A substantial part of the purchase price was borrowed.
In November 2007 the husband ceased working for [N]. He obtained a job in Cairns and moved to Cairns in December 2007 while the wife remained in Darwin. The husband continued to pay the mortgage and outgoings on the [K] property. His United Kingdom [omitted] pension of $500.00 per fortnight continued to be paid into the joint bank account and the wife lived on this money.
In September 2008 the husband informed the wife that he had commenced a new relationship. The wife said that to the best of her recollection the husband told her that the name of his new partner was either [first names beginning with “N” omitted].
The husband and wife are not divorced, but records produced by the Queensland Registry of Births Deaths and Marriages show that a person named Mr Lang married Ms N. D. in September 2008, declaring that he had never been previously married.
Shortly after the husband spoke to the wife in September 2008 he ceased making the mortgage payments and he also stopped the payment of his pension into the joint account. It was the wife’s case that she then considered the marriage over. She applied for Centrelink benefits.
The wife was unable to pay the mortgage and the personal loan repayments and the outgoings on the [K] property from her Centrelink benefits. She telephoned the husband on 25 November 2008 and “asked him to come back to Darwin to sort the finances out.” The husband told her that he would come to Darwin immediately. He never arrived. In December 2008 the wife filed an application for a property settlement.
In March 2009 the mortgagee commenced proceedings in the Supreme Court of the Northern Territory to obtain possession of the [K] property. To the best of my knowledge the husband did not take any part in the Supreme Court proceedings. An order for possession was made on 26 March 2009 and the wife was required to vacate the property by 18 April 2009. At the date of the hearing before me the [K] property was still unsold.
The wife’s attempts to serve the husband
The wife has not heard from the husband since she spoke to him on
25 November 2008. The wife said that she had tried to ring the husband after that date but found that his phone was disconnected.
The wife’s solicitors engaged a bailiff to attempt service on the husband. The bailiff informed the solicitors that the husband had ceased his employment in Cairns and had vacated the flat where he had been living.
Records subsequently obtained from the Department of Immigration show that the husband left Australia on 18 November 2008 and returned on 10 February 2009. On the incoming passenger card the husband stated that the country in which he had spent the most time while overseas was Russia. He gave his email address as [mr lang]@msn.com and his emergency contact as Ms N. Lang, email address [ms n.lang]@gmail.com.au. The husband gave his intended address in Australia as [omitted] Hotel, Cairns.
An outgoing passenger card subsequently obtained from the Department of Immigration shows that the husband left Australia again on 26 February 2009 with the intention of staying in Russia for three months.
On 17 March 2009 I made an order that personal service on the husband be dispensed with and that the wife’s documents be served on the husband by forwarding them to his email address and to the email address of Ms N. Lang.
The wife’s solicitors served the husband in accordance with the
17 March 2009order. The husband did not subsequently appear at court or file any documents or contact the wife or the wife’s solicitors.
On 14 April 2009 I listed the matter for final hearing on 3 June 2009.
I ordered that the wife’s solicitors forward a copy of the order to the husband at the two email addresses within three days. I further ordered that the wife file any additional documents on which she intended to rely at the hearing by 22 May 2009 and that these documents also be sent to the husband by email.
The wife did not strictly comply with the second part of this order, as she filed an amended application and an affidavit on 26 May 2009. Her solicitors forwarded the documents to the email addresses on the same day.
On 3 June 2009 at the commencement of the hearing the husband was called. He was not present at court. I considered that it was appropriate to proceed with the hearing in the husband’s absence.
The applicable law in respect of the property settlement application
Section 79(1) of the Family Law Act permits the court to make such orders as it considers appropriate altering the interests of the parties in the property of the parties.
Section 79(2) provides that:
“The court shall not make an order under this section unless it is satisfied that, in all the circumstances of the case, it is just and equitable to make the order.”
Section 79(4) sets out the matters which the court is required to take into account in considering what order (if any) it should make.
In Hickey & Hickey[1] the Full Court said as follows:
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case….”
[1] Hickey & Hickey(2003) FLC 93-143
In the context of the particular application before me the following statement by Gibbs CJ in Mallett & Mallett[2] is also apposite:
“Decisions in particular cases of that kind can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the Court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all circumstances of the particular case.”
[2] Mallett & Mallett (1984) FLC 91-507
The Assets and Liabilities
The wife said that the assets and liabilities were as follows:
Assets
Description
Ownership
Value
Property [K] Joint E400,000.00 Toyota Corolla Wife 14,000.00 Furniture Joint 6,000.00 Avsuper Husband 50,008.07 National Preservation Trust Super and Australian Super Husband 8,619.29 Spectrum Super Husband 3,057.24 TOTAL 481,684.60
Liabilities
Description
Ownership
Value
RAMS mortgage secured over the [K] property Joint E293,736.61 Australian Central Credit Union personal loan Joint 10,528.16 Ward Keller legal costs associated with repossession of [K] Joint 7,506.06 Agents commission on sale of [K] Joint Unknown TOTAL (approximate known) 311,770.83
The matrimonial home was due to be auctioned not long after 3 June 2009. No valuation was produced. The wife estimated that the property was worth $400,000.00, but its value will be determined by sale.
The wife did not have her motor vehicle valued and the amount of $14,000.00 is an estimate. The wife paid $25,411.00 for the motor vehicle in 2006. The estimate given by the wife could be a little low. The wife did not have her furniture valued and the amount of $6,000.00 is an estimate. The estimate does not appear on its face to be inherently unreasonable.
In the context of this case and considering the proportion which the estimated value of these items bears to the overall pool I do not consider it necessary or appropriate to order the sale of the furniture or the motor vehicle to fix their values. I intend to include the furniture in the pool at $6,000.00 and the motor vehicle in the pool at $14,000.00.
There was documentary evidence that between August 2008 and November 2008 the husband cashed in four superannuation interests.
The husband’s Bendigo Bank statements for the period 5 August 2008 to 1 December 2008 show that the following amounts were deposited into the husband’s account:
25 August 2008 [M] Pty Ltd 50,008.07
29 August 2008 Unknown 8,619.29
21 November 2008 Spectrum Plan 3,057.24
The deposit of $50,008.07 is demonstrably the husband’s Avsuper.[3] The deposit of $3,057.24 is his Spectrum Plan superannuation.
[3] Exhibit G
Statements from Australian Super and National Preservation Trust show that the husband’s interest in Australian Super was worth $5,100.60 at 30 June 2008 and his interest in the National Preservation Trust superannuation was worth $3,157.99 as at 30 June 2008.[4] Together these two amounts total $8,258.59. I consider it entirely reasonable to assume that the deposit of $8,619.29 on 29 August 2008, which consisted of two cheques, represented the amount received by the husband from these two superannuation funds.
[4] Exhibit D & E
The husband thus received a total of $61,684.60 between August and November 2008 by cashing in his superannuation. The wife was unaware that the husband had cashed in his superannuation until this information was obtained by issue of subpoenas.
It cannot of course be ascertained whether any of this money still exists. However the husband cashed in this superannuation without informing the wife about what he was doing. The husband effected a premature distribution to himself of matrimonial assets. Even if the money no longer exists I am satisfied that it is appropriate to include it in the pool.[5]
[5] AJO & GRO (2005) FLC 93-218
One potential asset which the wife did not include in the pool was a debt of $9,000.00 owed to her by a friend. The wife lent the money to her friend in 2006 when she cashed in her own superannuation. She said that she now had little hope of recovering the money. I do not consider it appropriate in those circumstances to include the debt owed to the wife in the pool of assets.
As to the liabilities, the Australian Central Credit Union loan was taken out in 2007 and is in the joint names of the parties. The wife’s evidence was that the money borrowed from the Credit Union was used to pay other debts and that her car was security for the loan. The wife produced a document establishing that the amount owing to the Credit Union as at 21 May 2009 was $10,528.16.
The amounts given in the table above for the RAMS mortgage and Ward Keller’s legal costs were reasonably accurate as at 3 June 2009.[6] However by the time of the sale these amounts will have increased and agents commission will be payable. There is a possibility that the liabilities could increase by $20,000.00 or more.
[6] Exhibit A
The above figures suggest a pool of $169,913.77. This is comprised of superannuation of a known value received by the husband ($61,684.60), assets of known value in the wife’s possession ($20,000.00) and an estimated amount of $88,229.17 tied up in the home and repayment of the personal loan. If an additional $20,000.00 (to use a very rough estimate) in costs and expenses is incurred then the amount available from the sale of the home will reduce to $68,229.17.
Contributions
At the commencement of cohabitation the wife owned furniture. The husband had no assets.
The wife conceded that the husband was the “primary breadwinner” during the marriage. The husband was unemployed for twelve months in 1998 and was sacked from his employment in India in 2000. After the husband took the [N] job in 2001, he was continuously employed by [N] until November 2007. To the best of the wife’s knowledge the husband was employed in Cairns between December 2007 and separation. It was the wife’s evidence that when the husband was working his income was usually about $100,000.00 per annum.
During the relationship the husband also received income in the form of an [omitted] Pension of $500.00 per fortnight from pre-cohabitation service in the United Kingdom. He contributed this amount to the support of the parties during the relationship.
The parties had a joint bank account during the relationship. Rent and later mortgage payments and other living expenses were paid from the joint bank account.
The husband’s wages and his [omitted] pension, were paid into this account until December 2007. Between December 2007 and September 2008 the husband’s [omitted] pension continued to be paid into this account and the wife was able to draw on it for her living expenses. Between December 2007 and July 2008 the husband continued to pay the mortgage and the outgoings on the home.
At the commencement of cohabitation the wife was employed at [omitted]. The wife was continuously employed between 1997 and September 2005 except for a period of about seven months when she was in India. She earned a much lower income than the husband.
While she was employed the wife’s wages were also paid into the joint account.
In September 2005 the wife was made redundant and received $35,000.00. She said that she used this money to pay rent, a personal loan of $10,000.00 and credit card debt, and to buy gifts, furniture and whitegoods. I accept the wife’s evidence that this money is now all gone.
In September 2006 the wife cashed in her superannuation and received $91,034.41. I accept the wife’s evidence that she used the $91,034.41 to pay a joint credit card debt of $25,000.00, to pay $9,000.00 onto two of the husband’s credit cards, to pay off another debt of $15,000.00, to pay for a trip to Thailand which cost $6,000.00, to purchase her motor vehicle for $25,411.00 and to lend $9,000.00 to a friend.
I accept that none of the $91,034.41 now remains.
The assets acquired during the relationship were principally the [K] property, the wife’s car and the husband’s superannuation.
The parties purchased the [K] property in January 2007 from the Northern Territory Housing Commission for $275,000.00. The wife claimed that the parties were able to purchase the home at a discount because of her long period as a tenant in the home, but there was no evidence to support this claim. The wife did not give any evidence about whether a deposit was paid at the time of purchase but it is clear that the majority of the purchase price was borrowed from Rams Home Loans.
The wife’s car was purchased in 2006 when she cashed in her superannuation.
Documents obtained from Avsuper, National Preservation Trust, Australian Super and Spectrum Super confirm that the husband acquired these superannuation interests during the relationship.
I accept that the wife was the primary homemaker during the relationship. Each party contributed to the gardening.
In summary, the wife made a direct financial contribution to the acquisition of the Toyota Corolla and the furniture. The husband made the mortgage payments on the [K] property between its purchase and separation. The husband’s superannuation was acquired during the relationship as a result of his employment.
The husband made a significant financial contribution to the support of the wife from his wages and army pension. He earned a greater income than the wife and he supported the wife after she ceased work on September 2005. However, the wife received a total of $126,034.91 in 2005/6 from her redundancy and superannuation. Some of this was used to buy a car, furniture and whitegoods but a good proportion of it was spent on living costs, travel costs and the repayment of debt. The wife was the primary homemaker.
The wife’s counsel submitted that contributions should be assessed as equal. In my view it is reasonable to make a finding that contributions were equal.
Section 75(2) factors
The wife is 57. She has been out of the work force since September 2005. The wife said that she had high blood pressure and that this prevented her from working but she produced no medical evidence to corroborate this claim.
The wife is in receipt of Newstart allowance. She said that her income was modest prior to September 2005 but she provided no further information about her past earnings.
The wife is of Thai heritage, but has lived in Australia since 1977 and in the witness box she spoke good English.
The only assets in the wife’s possession are the Toyota Corolla motor vehicle and furniture. The wife has no superannuation and no savings. She has not re-partnered.
The husband is 62. He is an [occupation omitted]. The wife’s evidence that he earned over $100,000.00 per annum from this employment during the relationship was not corroborated but is not inherently unbelievable. The husband was consistently employed between late 2001 and December 2007 and as far as can be ascertained for much of 2008. There is no reason to suppose that the husband could not obtain well paid employment at the present time if he chose to do so.
The husband has a resource in the form of his United Kingdom pension which pays him $500.00 per fortnight. He also has another very small United Kingdom pension which pays an insignificant amount each year.
In 2008 the husband cashed in the superannuation accrued during the relationship and received a total of $61,684.60.
The husband has repartnered. I have no information about his partner’s circumstances.
I take into account pursuant to s.75(2)(o) that the husband ceased communicating with the wife in late 2008 in full knowledge that the wife was unable to manage financially and was unable to pay the mortgage and outgoings on [K] as well as the personal loan repayments. The husband made no effort to contact the mortgagee or to co-operate with the wife to effect an orderly sale of the [K] property. As a result the mortgagee has taken possession of the property, an action which is likely to cost the parties dearly.
In my view an adjustment in the wife’s favour for s.75(2) factors is called for. Although the wife is not at retirement age, she has not been employed since 2005 and prior to that she was engaged in modestly paid employment. The husband abruptly ceased supporting her and making the mortgage payments in 2008 and not long afterwards dropped out of contact with the wife. He left the wife alone to struggle with the loan repayments and the demands of creditors, and ultimately to deal with the mortgagee’s application for possession of the property. His actions in respect of the [K] property have in all likelihood caused serious financial loss to the parties.
The husband is approaching the usual retirement age of 65, but he has some years of employment left to him. He is highly skilled and capable of earning a good income. He will also receive the benefit of being released from a liability if as the wife proposes the Australian Central Credit Union loan is paid out with the proceeds of sale of [K].
The wife’s counsel argued that there be an adjustment in the wife’s favour of “at least 15%”.
If the net asset pool is indeed $169,913.77, an adjustment of 15% would result in the wife being entitled to an additional $25,487.06 or $110,443.95 in all. This would be an entirely appropriate adjustment, given the wife’s current circumstances, the loss caused by the husband’s actions and the husband’s income earning capacity. It would give the wife $90,443.95 plus her car and furniture. The husband would be entitled to $59,469.82.
The requirement that the outcome be just and equitable
I am faced with two particular difficulties in this case. The first difficulty is that the husband has by his actions made it impossible for the wife to serve him with documents and has not responded to emails sent to him at email addresses he himself gave on his Department of Immigration departure card in November 2008.
I do not know whether the husband has returned to Australia by now or where he is. I do not know whether anything is left of the money which he withdrew from his superannuation in 2008 or whether he has spent it for his own purposes.
If the net asset pool is indeed $169,913.77 then on the above figures the husband would need to pay the wife $2,214.78 to achieve a 65% division of the property in the wife’s favour.
Realistically there is little point in an order being made that the husband pay money to the wife and the wife’s counsel did not ask for such an order.
The second difficulty is that until completion of the sale of the [K] property, the size of the property pool cannot be known for certain. The [K] property may sell for the amount the wife estimated, but it may sell for less or it may sell for more. I also can do no more than estimate the additional costs which might be incurred prior to completion of the sale.
The wife’s application was that she should retain her motor vehicle and furniture and all of the proceeds of sale of [K], whatever they might be.
If the [K] property sells for $400,000.00 and the additional liabilities are about $20,000.00, the wife will receive not $90,443.95 plus her car and furniture but $70,443.95 plus her car and furniture. This would result in her receiving 60% of the pool not 65%. If the costs exceed the above estimate, the amount and the percentage received by the wife will be even less.
If the property sells for more than $400,000.00 however she may receive more than 65% of the pool.
If for example the property sold for $450,000.00 and the additional liabilities were about $20,000.00, the wife might ultimately receive 70% of the pool. This would be in excess of the amount referred to in paragraph 80 of this judgment.
A solution to the dilemma of not knowing exactly how much will be available upon the sale of the property would be to delay making a decision until the sale is completed.
I am however of the view that in all the circumstances of this case, it is appropriate for me to order that the wife receive the net proceeds of sale of the [K] property whatever they may be and that the husband retain his superannuation.
By his behaviour in late 2008 the husband effectively walked away from the [K] property and left the wife to deal with whatever followed from him ceasing to make the repayments.
It is likely that the wife will receive little enough from the sale of the [K] property. She is in a considerably weaker financial position than the husband. If by some stroke of good fortune the house sells for more than the wife’s estimate, then in my view it is just and equitable that the wife retain any additional amount received.
For all the above reasons the orders of the court will be set out at the beginning of the judgment.
I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of Terry FM
Associate: Rachel Hodgson
Date: 17 July 2009
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