Wicks and Millington
[2016] FCCA 2107
•24 August 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WICKS & MILLINGTON | [2016] FCCA 2107 |
| Catchwords: FAMILY LAW – Property – short relationship – significant initial contribution – respondent represented by Adult Guardian – significant health issues for respondent. |
| Legislation: Family Law Act 1975 (Cth), pt.VIII NSW Trustee and Guardian Act 2009 (NSW) |
| Cases cited: Holt & Holt (2013) FLC 93-546 Kowalski & Kowalski (1993) FLC 92-342 |
| Applicant: | MR WICKS |
| Respondent: | MS MILLINGTON |
| File Number: | NCC 451 of 2013 |
| Judgment of: | Judge Middleton |
| Hearing date: | 21 March 2016 |
| Date of Last Submission: | 21 March 2016 |
| Delivered at: | Newcastle |
| Delivered on: | 24 August 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Graham |
| Solicitors for the Applicant: | Tony Cox Lawyers |
| Counsel for the Respondent: | Mr Murray |
| Solicitors for the Respondent: | Toronto Legal |
ORDERS
The respondent pay to the Solicitor for the applicant on his behalf the sum of $55,500.00 on or before 60 days from the date of these Orders.
That in the event the respondent fails, omits or neglects to comply with Order 1 hereof then the respondent is to do all acts and things and sign all documents necessary so as to affect the sale of the real property for the best price reasonable in the following manner:
(a)list the property for sale by private treaty with such Agent as she may appoint;
(b)The sale price at which the real property shall be listed shall be $370,000.00 or such higher figure as recommended by the Real Estate Agent appointed by the respondent;
(c)The respondent shall cooperate in every way with the Agent including (without limiting the generality of the foregoing):
(i)making the key available to the agent;
(ii)allowing inspection of the real property at all reasonable times requested by Agent;
(iii)ensuring the real property including the grounds are in a neat and clean condition at the time of inspection by the Agent and the prospective purchasers;
(iv)signing all documents requested by the Agents in relating to the listing for sale of the real property except a contract or agreement for sale which has not been authorised by the respondent’s Solicitor.
(d)The respondent shall execute a contract for sale in the form prepared by the Solicitors having the conduct of the sale at a price of $370,000.00 or such other price as recommended by the Agent appointed for sale.
(e)The respondent shall instruct a Solicitor to have the conduct of the sale on her behalf.
In the event the real property is not sold by private treaty within six calendar months after this order comes into effect:
(a)the respondent shall list the property for sale by public auction with an Agent appointed by the respondent;
(b)the reserve price for the purposes of such auction shall be as recommended by the Auctioneer appointed by the respondent;
(c)in the event the bidding at the Auction does not reach the reserve price the respondent may negotiate with the highest bidder or any other interested persons and affect the sale of the real property at a price which is not more than 5% below the reserve price;
(d)if the real property remains unsold the respondent shall do all acts and things and sign all documents necessary to immediately relist the real property for sale of by public auction again, on a date nominated by the said Agent.
On settlement of the sale of the real property the proceeds of sale be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements, agents commission, valuers fees, and auction expenses;
(b)the amount required to discharge the mortgage if any;
(c)the amount required to pay all municipal and water rates outstanding with respect to the real property;
(d)the balance then remaining shall be divided as follows;
(i)15% of the net sale proceeds to the Solicitor for the applicant on his behalf;
(ii)the balance to the respondent.
That pending the payment of completion of the sale;
(a)the respondent had the sole right to occupy the real property;
(b)the respondent pay all instalments pursuant to the mortgage, if any at all rates, taxes and outgoings of the real property as they fall due;
(c)the respondent is not to encumber or further encumber of the real property unless for the purposes of satisfying order 1 herein.
Other than specifically provided for in these orders, the parties are solely entitled to the exclusion of the other to all other property including superannuation and chattels of whatsoever nature and kind in the possession of each of the parties as at the date of the making of these orders.
In default of the parties are either of them doing all acts and things and executing all such documents as are necessary to give effect to these orders, a Registrar of this Court be appointed pursuant to section 106A of the act to execute all such documents in the name of the party in default and to do all such acts and things necessary to give to the said orders.
IT IS NOTED that publication of this judgment under the pseudonym Wicks & Millington is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 451 of 2013
| MR WICKS |
Applicant
And
| MS MILLINGTON |
Respondent
REASONS FOR JUDGMENT
Introduction
The proceedings before the court are in relation to a dispute about the alteration of interests in property.
The applicant husband Mr Wicks is aged 59.
The respondent wife Ms Millington is aged 49.
The parties commenced cohabitation in 1994, married on (omitted) 2001 and separated on 10 September 2002. Accordingly there was a relevant relationship for a period of approximately 8 years.
However between 1994 and 2002 the parties separated on at least two occasions. The husband in his affidavit filed on 28th February 2013 says:
“In mid March 1996 I moved out and in March 2001 I moved back in.”
The wife in her affidavit says that the parties lived together for approximately six months in 1994, again for approximately 6 months in 1996 and then finally from 2001 until mid-2002 the parties lived together for no more than 18 months.
There are two children of the relationship namely X born (omitted) 1995 and Y born (omitted) 2002. The mother had a child from a previous relationship Ms L born (omitted) 1991. There were care proceedings relating to Ms L in the 1990s but thereafter Ms L lived with the wife.
On (omitted) 1993 the wife received $423,741.65 being a half share of a Lotto prize totalling $847,483.30. The wife won these monies with a friend Mr H.
In 1993 the wife and Mr H purchased a property in Property R for approximately $320,000 each owning a half share of the property.
In early 1995 the applicant paid out Mr H's share.
In February 1996 the applicant sold the Property R property and received net proceeds totalling $207,913.00.
In April 1996 the applicant purchased the Property G property at Property G for $124,500.00 leaving a balance of approximately $83,413.00.
It is common ground that the Property G property is the only asset existing as between the parties.
The proposals
The applicant seeks the following orders:
1.That the applicant pay to the respondent the sum of $200,000.00 within 42 days for the date hereof.
2.Simultaneous with Order one the respondent is to transfer her right, title and interest in the property known as Property G to the applicant.
3.The applicant will indemnify and keep indemnified the respondent in relation to the property known as Property G.
4.That unless otherwise specified in these orders:
a.Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of the person whose name appears on the bank's records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements;
b.Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which the party is entitled to pursuant to these orders.
The respondent in her response filed on 22 October 2013 sought the following order:
1.That the application be dismissed.
The respondent in her case outline filed with the court on 26 November 2015 sought that the application be dismissed.
In the case outline filed at the commencement of trial the respondent submitted that the applicant had no claim more than ten percent of the net value of the asset.
In the written submissions filed on 1 April 2016 the respondent submitted that the applicant should receive fifteen percent of the interest in the property.
The evidence
The applicant relied upon the following material:
1.Further amended initiating application filed 20 August 2015;
2.Affidavit of the husband filed 28 February 2013;
3.Affidavit of the husband filed 18 February 2014;
4.Affidavit of the husband filed 18 November 2014;
5.Affidavit of the husband filed 25 August 2015;
6.Exhibit 1 affidavit of the husband filed 18 March 2016.
The respondent wife relied on the following documents:
1.Response filed 22 October 2013;
2.Financial statement filed 22 October 2013;
3.Affidavit of the wife filed 18 September 2015.
The respondent wife has been under the care of the Adult Guardian since 4 July 2013.
The NSW Trustee and Guardian Act 2009 came into effect in New South Wales on the 1 July 2009.
As and from 1 July 2009 the New South Wales Trustee is authorised to conduct legal proceedings on behalf of another person under section 16 (1)(s)of the NSW Trustee and Guardian Act.
The proceedings were conducted on behalf of the respondent by the New South Wales Trustee and Guardian (the Adult Guardian).
The wife was not made available for cross examination.
I admitted the respondent’s affidavit of 18 September 2015 into evidence pursuant to Rule 15.29A of the Federal Circuit Court Rules. I sought submissions in relation to the weight, if any I should place on that affidavit.
Having now considered those submissions I am of the view that I should place some weight on the affidavit and that the weight that I place on the affidavit is somewhat dependent upon the findings I make in relation to the evidence of the applicant.
I had the benefit of watching the applicant give his evidence under cross-examination after having read his affidavit material.
I am cognisant of the decision in Holt & Holt[1] where it was held that a court should:
[1] Holt (2013) FLC 93 – 546
“avoid undue reliance on the demeanour of witnesses when considering credibility" .
The applicant contradicted himself both in his affidavit evidence and in his oral evidence.
In the applicant's affidavit filed 5 February 2014 he said:
" I rang our property Solicitor Margaret Hall to seek advice on this matter" .
In his affidavit filed 28 February 2013 at paragraph 22 he said:
“We both contacted our then Solicitor Leoni Miller where we were then advised to speak with a Solicitor who specialises in property settlement. We were given Margaret Holes contact details and upon seeing her we were advised to pay Mr J”.
In the applicant's affidavit of the 28 February 2013 at paragraph 32 he says:
“I only have $500 left in my pocket”.
At paragraph 35 of the same affidavit he says, in relation to the purchase of the Property G property only a few months after the parties separation where he said that he only had $500 left in his pocket, he says:
“Ms Millington and I jointly paid for the house in Property G”.
In the applicant's affidavit filed 25 August 2015 at paragraph 4 he says:
“I commenced a relationship with the respondent in 1994 and began cohabitation with the respondent in the same year. I separated from the respondent 2002”.
In the applicant's affidavit filed 28 February 2013 at paragraph 32 he says:
“On or about mid March 1996 after our possessions arrived Ms Millington said words to the effect of “Mr Wicks won’t you to move out of the house”. I said words to the effect of “I only have $500 left my pocket”. Ms Millington persisted and I moved out”.
In that same affidavit at paragraph 47 the applicant says:
"”On or about March 2001 I moved back with Ms Millington, Ms L and X we married on (omitted) 2001”.
The further amended initiating application filed by the applicant on 20 August 2015 at item 27 (date of final separation) provides the date of 10 September 2002.
In the affidavit of the applicant filed on 28 February 2013 he says at paragraph 50:
“On or about September 2003 I had permanently moved to the storage shed”.
In cross-examination the applicant conceded that in the total time that he had known the respondent he had lived with her between three and a half to four years in total.
In cross-examination in answer to a question how long he lived in the Property G property he answered “two years".
The Property G property in Property G was purchased on 16 April 1996. The applicant's own evidence at paragraph 32 of his affidavit filed 28 February 2013 states that he was asked to leave the Property G property in 1996.
The respondent’s evidence is that the applicant lived in the Property G property for approximately six months.
Having regard to the contradictions contained within the applicant's affidavit material and his oral evidence I am satisfied that I can place more weight on the respondent’s evidence contained within her affidavit in relation to the length of time that the applicant lived in the Property G property.
Having regard to the evidence the applicant gave in cross-examination I am satisfied however that I can accept that he at best lived with the applicant for a period of four years during a relationship that lasted some eight years.
I am of the view that at best the applicant lived with the respondent for a period of eighteen months in total at any given time.
It is in that context that I must consider the contributions to the property in dispute.
The law
Section 79(2) of the Family Law Act provides:
“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”.
The Act then identifies in section 79(4) the matters the court must take into account in considering what order, if any, should be made.
Before deciding whether it is just and equitable to make a property settlement order I must identify the existing legal and equitable property interests of the parties. There is no room for an assumption that the parties rights to or interests in marital property are or should be different from those that then exist. That is, a party has no automatic right to division of the parties property (see Stanford v Stanford[2]).
[2] [2012] HCA 52 at paras 22, 35, 40 and 50.
Since 2012 and Stanford in considering applications for alteration of property interests the court must:
1.Identify the existing legal and equitable interests of the parties in property;
2.Consider whether it would be just and equitable in the particular circumstances to make an alteration; and
3.If an alteration should be made, to consider the matters contained in section 79(4) in section 75(2) of the Act in coming to an adjustment; and
4.Analyse and consider whether the adjustment under consideration would be just and equitable.
Identifying the existing legal and equitable interests of the parties in property
It is conceded by the parties that the only identifiable asset of the relationship left for alteration or otherwise is the property situated at Property G more fully described as Lot (omitted) in deposited plan (omitted), Torrens Title (omitted).
That property is in the respondent's sole name.
The parties agree that the value of that property is $370,000.00.
Would it be just and equitable to make an alteration to interests or transfer property
Over a period of some three and a half to four years the applicant made some contributions both of a financial and non-financial nature to the relationship.
The breakdown of their relationship ended their fiscal unity and continues to deprive the parties of common use of a property, which is often the case (See Stanford & Stanford at para 42).
There is obviously a disparity between the parties respective existing legal and equitable interest in assets and that disparity is not reflective of their joint endeavours as a family unit or their individual efforts since their separation.
In those circumstances I am satisfied that it is just and equitable to make an order.
Consideration of contributions pursuant to section 79(4)
Initial contributions
It is not in contest that the entire proceeds of a property at Property R were provided by the respondent through her half share in Lotto winnings and her subsequent loan in her sole name.
The applicant says that he was hired to do work for the respondent in approximately February of 1994. He engaged in that work with a Mr L
When being cross-examined the applicant agreed that he was the labourer for Mr L.
The respondent says that the applicant was engaged to do some painting to the Property R property and that he was paid for that work.
Considering those two items of evidence I am satisfied that the applicant was paid to do some painting work on the Property R property prior to the commencement of his relationship with the respondent.
The applicant gave evidence that he carried out far more work including gyprock fixing, replacing posts and rails of a veranda and painting the property inside and out.
I am satisfied on the evidence that any work the applicant did to the Property R property at Property R was undertaken at a time when the parties were not in a marriage like relationship.
That is not to say that those contributions are not relevant[3] however I give very minimal weight to those contributions having regard to the nature of the contributions, even if I accept the applicant's evidence at its highest, and the considerable initial contribution made by the respondent.
[3] See Kowalski & Kowalski (1993) FLC 92 – 342; W v W (1997) FLC 92 – 723
Turning to the respondents initial contribution I am satisfied that significant weight must be given to this. It is often argued that over time the initial contribution is “eroded”.
In Pierce v Pierce[4] the Full Court said that it was not so much a matter of erosion of contribution but a question of what weight was to be attached, in all of the circumstances to the initial contribution. Furthermore the use made by the parties of that contribution was relevant.
[4] [1998] FAMCA 74
It is clear that the initial contribution in this matter rests in the equity that the respondent had in the Property R property. Her equity in that property increased prior to the relationship with the applicant and thereafter subsequent upon her obtaining a loan in order to pay out her friend Mr H.
It is the proceeds from the sale of that property that were used for the purpose of the Property G property.
In those circumstances I am satisfied that significant weight should be given to that initial contribution of the respondent.
The applicant owned a property on (omitted) prior to the relationship.
The applicant gives evidence in his affidavit filed 28 February 2013 that at a time in approximately mid 1995 he sold that property for some $6,500.00.
The applicant also says that at that time he had superannuation totalling $2,500.00.
I am satisfied that the respondent had significantly greater initial in financial contributions.
Contributions - Financial and to the welfare of the family during the relationship
When it came to the purchase of the Property G property the applicant says at paragraph 35 of his affidavit filed 20 February 2013 that he and the respondent jointly paid for the house.
With respect to the applicant that simply cannot be the case. He was a man of very limited means. He admits that his work was very sporadic. His own evidence at paragraph 32 of the affidavit of 28 February 2013 satisfies me that in just a few short months prior to the purchase of the Property G property the applicant only had $500.00 left to his name.
Considering the applicant's evidence at its highest I am satisfied that the applicant made three monthly mortgage payments in or about 1995. I am satisfied that he made a financial contribution using proceeds from a Lotto and an Oz Lotto ticket to the relationship totalling $11,640.00.
In relation to contributions to the family I am satisfied that the applicant supported the respondent in her efforts to regain the care of her child Ms L. I am satisfied that whilst living together the applicant assisted the respondent with the care of the two children of the marriage. I am further satisfied that the applicant has continued to provide care to his children including Ms L since separation.
In relation to non-financial contributions to the Property G property I am satisfied that the applicant left that property in 1996 and did not return to live in that property until 2001.
I am satisfied the applicant lived in the Property G property from 2001 in approximately March until 10 September 2002 and that thereafter he has not been back. In making that finding I note that the applicant in his oral evidence stated:
“I moved out in September 2003 and have not been back there since”.
I do not accept that the applicant moved out in September 2003 as his own evidence both in the further amended initiating application and otherwise in his affidavit material provides that he moved out of the property in September 2002.
Contributions post-separation
It is clear that the financial contributions of $11,640.00 to the Property G property were made post-separation.
The applicant in his affidavit filed 5 February 2014 states that he paid approximately $1200.00 in rates to the Property G property in 2013 and annexes at Annexure C a balance history relevant to rates.
It is worthy of note that there is absolutely no way of referencing the alleged payments made on the balance history as being payments made by the applicant. However again accepting his evidence at its highest; I note that between 23 January 2012 and 7 March 2013 total payments of $1100.00 were made to the rates. This is yet again a contradiction made by the respondent in his own material.
In the circumstances, noting that he was not cross-examined on this point I will accept the evidence at its highest that is that the applicant made contributions of approximately $1100.00 by way of payment of rates to the Property G property.
Overall I was left with the impression that the applicant was at all times exaggerating his contributions to the relationship and attempting to diminish the contributions made by the respondent to the relationship.
The children of the relationship have lived with the applicant since X came to live with him in 2007 and Y in 2009. It is not in contest that the applicant continues to make contributions to the welfare of the children since that time and continuing.
It is not in contention that the respondent does not have capacity to care for the children as she is under the care of the Adult Guardian.
The applicant was cross-examined however on his drug addiction.
The applicant admitted to a drug addiction to marijuana and in December 2009 a search warrant was executed on the applicant's home. At the time of that search 34 plants were located. A hydroponic garden had been established for the cultivation of marijuana.
The children were living with the applicant at that time. The applicant admitted that in 2009 he received some psychiatric assessment and assistance as it was deemed necessary as part of the merit program that he was ordered to undertake.
In May 2013 the applicant was taken to (omitted) Mental Health Unit by Police.
In those circumstances I am persuaded somewhat by the submissions of the respondent that when considering section 79(4)(c) “the welfare of the family constituted by the parties to the marriage and any children of the marriage” I should not give significant weight to those contributions.
I am satisfied that the contribution should be discounted in those circumstances.
Accordingly after a relationship of some eight years together and a further fourteen years post separation and taking into account the far greater initial contribution of the respondent and the minimal contributions of the applicant, I consider that the parties’ assets require an adjustment to reflect an overall contribution of 95/5 in favour of the respondent.
Relevant section 75(2) factors
(a) the age and state of health of each of the parties
As previously referred to the respondent is under the care of the Adult Guardian. The respondent does not have the capacity to manage her own affairs.
I was not provided with any evidence to suggest that the situation won’t continue into the future. The applicant who is aged 59 also has some health issues that impact upon his ability to parenting. Indeed his evidence was that he can only work sporadically.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
In the applicant's financial statements filed 20 August 2015 the applicant states that he receives weekly income of $946.00 on average consisting of $330.00 by way of wages before tax and family assistance payments of $609.00 and child support payments received from the respondent of $7.00.
The applicant says he has a liability relating to orthodontic expenditure of $7880.00.
In the financial statement filed by the respondent on 22 October 2013 she swore to having an average weekly income of $375.00 received by way of government benefits. Property to the value of $377,846.00 and liabilities of $28,353.00
The applicant provides evidence that he can work at times to supplement his government benefits.
The evidence is such that it is not open to me to find that the respondent can work at all having regard to the current circumstances.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
Y is currently 14 years of age and the applicant will be responsible for his primary care until at least the age of 18.
The respondent cannot assist in the care of any of the children.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
Neither of the applicant or the respondent has a commitment to any other person other than themselves.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party
Both the applicant and the respondent are in receipt of government benefits.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The applicant has lived a very frugal life but for the times when he resided with the respondent.
There is nothing about the relationship that has affected the standard of living of the applicant.
The respondent has owned property prior to the relationship commencing and continues to own property. The respondent is entitled to maintain that standard of living.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The marriage has had no effect on the applicant's capacity to earn income.
The evidence of the applicant is that he was working as a (occupation omitted) prior to the relationship and that he continues to work sporadically in his own business.
The evidence of the respondent is that she was not working at the time of the commencement of the relationship and she continues to no longer work.
(l) the need to protect a party who wishes to continue that party's role as a parent
Quite clearly this is a relevant consideration for the applicant.
In circumstances where it is unlikely that the respondent will be able to assist him in the care of Y until he reaches the age of 18 years there should be some adjustment in favour of the applicant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The applicant took on the role of the father for Ms L, the respondent's child from a former relationship.
The respondent had a legal duty to maintain the child.
The applicant had no legal duty to maintain the child and was acting essentially as a volunteer assisting the respondent in the discharge of her legal obligations.
Having regard to the relevant section 75(2) factors I am satisfied that there should be an adjustment in favour of the applicant on the basis of those matters.
Accordingly, the overall ratio should be adjusted in favour of the applicant so as to achieve an overall division of the assets as to 85/15 in favour of the respondent.
Is the adjusted outcome just and equitable
The applicant will receive $55,500.00.
The respondent will retain the property at Property G or in the event that she cannot retain the property 85% of the net proceeds.
In circumstances where the only asset left for determination is the Property G property and where that property was purchased as a result of the significant initial financial contribution at the commencement of a relationship that lasted eight years in total with those parties living together for no more than four years at most I am satisfied that the outcome is just and equitable.
I certify that the preceding one hundred and twenty three (123) paragraphs are a true copy of the reasons for judgment of Judge Middleton
Date: 17 August 2016
Key Legal Topics
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Civil Procedure
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Property Law
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