XANDER and SAWYER

[2015] FCWAM 168

JURISDICTION : MAGISTRATES COURT OF WESTERN AUSTRALIA – 150 TERRACE ROAD

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: XANDER and SAWYER [2015] FCWAM 168

CORAM: KAESER M

HEARD: 15 JULY 2015

DELIVERED : 4 AUGUST 2015

FILE NO/S: PTW 4749 of 2010

BETWEEN: MS XANDER

Applicant

AND

MR SAWYER
Respondent

Catchwords:

Property settlement; undefended proceedings; loan from wife’s father to be repaid from sale proceeds; contributions assessed in wife’s favour; significant section 75(2) factors in wife’s favour.

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant: Ms M Hearty

Respondent: No appearance

Solicitors:

Applicant: Hearty & Tam

Respondent: Self Represented Litigant

Case(s) referred to in judgment(s):

Stanford v Stanford (2012) 247 CLR 108

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1 These parties have not been able to resolve their property settlement issues. This matter was listed for an undefended trial before me on 15 July 2015. The husband has not filed any documents in these proceedings and did not attend the trial.

2The applicant wife relies upon her trial affidavit filed on 26 June 2015 together with an affidavit of her father [Mr Xander] filed 26 June 2015. She also relies upon her Form 13 financial statement filed 26 June 2015.

3The wife relied upon the following orders by way of a minute filed on 26 June 2015.

Wife’s final orders sought at trial

1.That [Property P] be immediately marketed for sale with the wife to nominate the real estate agent to effect the sale.

2.That the wife be appointed as sole trustee for the sale of [Property P] and be more particularly described as being Lot x on Strata Plan xxxxx in Certificate of Title Volume xxxx Folio xxx.

3.That upon the sale of [Property P], the sale proceeds be distributed as follows:

(a)In payment of $238,108.07 to [Mr Xander] with additional interest accrued at the rate of $31.66 per day from 15 July 2015;

(b)In payment of real estate commission of sale and advertising costs;

(c)The balance be divided with the wife receiving 80% and the remaining 20% to the husband.

4.That each party retain all assets in their name, possession or control including but not limited to superannuation benefits, vehicles, funds in bank and furniture.

5.That each party indemnify the other for all liabilities in their respective names including but not limited to personal loans, taxation liabilities or credit card debts.

6.That pursuant to s 106A of the Family Law Act 1975 a Registrar of this court sign the following documents on behalf of the husband:

(a)Discharge of mortgage documents for the [Property P]; and

(b)Transfer of vehicle registration form for [Citroen] registration number xxxxxxx from the name of husband to the wife;

(c)Any other documents require to give effect to these orders.

7.Such other orders as this court deems appropriate.

8.That the husband pay the wife’s costs of this application with such sum to be determined and met from the sale proceeds the husband would receive pursuant to order 3 herein.

Background

4The parties commenced their relationship at Christmas time in 1998. They were married on 22 May 1999. They purchased their first house being [Property P] in July 2002. Their child, [Child A], was born [in] 2003 and their child, [Child B], was born [in] 2005. They separated in July 2009 and were therefore together for approximately 10½ years. They were divorced in September 2014.

Property settlement law

5The parties were married so the provisions of the Family Law Act 1975 apply.

6Section 79(1) of the Act provides that the Court must make such orders as it considers appropriate.

7Section 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”.

8Traditionally that has meant that the Court followed a four‑stage process.

9That process is as follows:

(a) identify the value of the assets and liabilities of the parties;

(b) assess the contributions made by each party to the assets;

(c) assess the factors set out in s 79(4) and s 75(2); and

(d) consider whether the proposed orders are just and equitable between the parties.

10The fourth step of this process was seen to be the check required pursuant to s 79(4) to only make an order if it was just and equitable to do so.

11The High Court examined these provisions in Stanford v Stanford (2012) 247 CLR 108.

12The High Court noted at [36-40] that when exercising the property settlement power, three fundamental propositions must not be obscured:

(a) One must first identify, according to common law and equitable principles, the existing legal and equitable interests of the parties in the property [emphasis added];

(b) The Court’s power must be exercised in accordance with legal principles; and

(c) To conclude that making an order is “just and equitable” only because of reference to the various matters set out in s 79(4), without separately considering s 79(2), would be to “conflate the statutory requirements and ignore the principles laid down by the Act”.

13The Court also held that the mere fact of separation is not necessarily enough to warrant exercising the property settlement power and making an order.

14The power under s 79 is to alter a party’s interest in property, which is why the High Court considered it is essential to begin with an examination of what interests in property the parties have. It may or may not be necessary to alter any such interests.

15The High Court at [42] acknowledged the reality that in many cases, the “just and equitable” requirement is:

… readily satisfied by observing that, as a result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.

16In the event that the Court decides that s 79(2) demands that an order be made, then the Court must make such orders as it considers appropriate. It must also take into account the provisions of s 79(4) and s 75(2)

17The parties’ assets and debts are set out in the table below.

Item	Owned by	Value
[Property P]	Joint	$925,000.00
Debt – loan to wife’s father with interest as at 15/7/15	Wife	-$238,108.00
Debt - anticipated selling costs	Joint	-$20,000.00
Bank account	Wife	$18,718.00
Furniture	Wife	$5,000.00
Superannuation	Wife	$73,452.00
[Citroen] vehicle	Husband (in wife’s possession)	$2,000.00
Net Total:	$766,062.00

18The Court is able to treat superannuation as if it was an asset. In the circumstances I will include the superannuation in the asset schedule as the wife has done in her Papers for the Judicial Officer.

Loan to applicant’s father

19The applicant’s father says that he lent money to the applicant to be repaid and was very clear on that condition. He claims that he paid $20,141.00 by way of mortgage repayments on Property P together with other expenses and amounts by way of cash from time to time.

20He was clear that he told the applicant that he did not expect interest to be added to those amounts set out above.

21On 17 November 2010 (after separation) the applicant’s father paid the amount of $165,084.95 to the parties’ Police and Nurses loan account. This payment discharged the joint mortgage over Property P. The applicant’s father was clear that he expected that amount to be repaid with interest at 7%. His condition was that the amount be repaid when the house was sold. Those terms were agreed by the applicant. It is therefore appropriate that the applicant seeks orders for the sale of the property so that her father may be repaid.

22I accept that the abovementioned liability to the applicant’s father is a legitimate one and I accept the basis of the calculation of interest.

Is it just and equitable to make an order?

23It is just and equitable to make an order for property settlement. The parties no longer have the joint enjoyment of Property P and given the husband’s lack of involvement in these proceedings it has not been possible to finalise that interest. It would be inequitable to allow the parties to retain their joint interests in that property.

Contributions and history

24Neither party had any assets of any significance at the start of their relationship.

25At the start of their relationship the respondent was employed as a [Physiotherpist] on a full‑time basis earning approximately $45,000.00 per annum. In January 1999 the wife started full‑time study at Murdoch University.

26The wife finished her [teaching] degree in 2002. She started working as [a relief teacher] in July 2002 earning approximately $50,000.00 per annum. She [commenced full-time teaching] in February 2004. The parties repaid a loan to the applicant’s father for the applicant’s studies. During the course of her employment her wage increased to approximately $100,000.00. After both children were born the husband initially stayed home on a full‑time basis. In April 2006 the parties swapped roles where the applicant ceased work and stayed at home caring for the children and the respondent took up a full‑time position as a physiotherapist in [Coastal Town M].

27According to the applicant’s evidence that change in arrangements did not work out and the parties then moved to [Coastal Town N] in late 2006.

28The wife recommenced part-time work as a solicitor in July 2007 and was working four days per week. She stopped that work in November 2008.

29In 2009, she started relief teaching, given the flexibility and working hours assisted with the care of two young children.

30At that time the husband was working one day per week as a physiotherapist. In May 2009 the wife commenced full‑time teaching earning approximately $78,000.00 per annum. In July 2009 the parties separated.

31Post separation the wife’s father paid out the mortgage so that she could live in Property P without having to contribute to mortgage repayments.

32Property P was purchased on 29 July 2002 for $365,000.00. The wife accepts that the parties equally contributed to that initial purchase and there was an initial mortgage of $250,000.00.

33The wife says that contribution should be assessed on a 60%/40% basis in her favour. Given the contributions to the welfare of the family and contributions by way of income I consider this is an appropriate apportionment (in particular taking into account the contributions to that property after separation). The wife paid for a number of renovations to the property that may well have increased the value of the property. I have not taken into account (as I have been careful to not double count) the amount provided to the parties by the wife’s father. Those amounts cannot be classified as contributions because they form a legitimate debt which will be repaid.

Section 75(2) factors

34The current child support assessment is for a period 1 August 2014 to 31 October 2015. The husband’s taxable income is described at $22,919.00. The wife has been assessed as having 100% care of the children. The annual rate of child support payable by the husband to the wife is $399.00. This is an extremely low level of child support and goes nowhere near covering the expenses for the children. In particular the education expenses alone for the two children are significantly higher than the husband’s overall child support liability. Child A attends [Private School A] and is in year 6. The combination of her tuition fees and other school related expenses amounts to over $10,000 per annum. Child B attends [Private School B] and is in year 4. His fees were approximately $5,000.00 (not take into account extra expenses such as uniforms, excursions and books).

35To the best of the wife’s knowledge the husband still works one day a week at the [Coastal Town N Physiotherapy Clinic] and does relief work at the [Coastal Town G Physiotherapy Clinic].

36The wife now works fulltime at [M School] earning $103,600.00 per annum.

37She contends that an apportionment of 20% in her favour is appropriate given the abovementioned factors. The wife has a reasonable income but given the children are both attending private schools, there will be significant expenses paid by her in order to ensure that they continue attending such schools. The husband is unlikely to contribute to any significant extent to those costs or to the ongoing everyday costs of supporting two children. Given that the husband has presented no evidence whatsoever as to his income and the only figure that is available on the evidence is that mentioned in the child support documents, I am not prepared to be generous to the husband. He clearly has a significant earning capacity having earned reasonable income in the past when working on a full‑time basis. It may be that he has chosen to work on a part‑time basis for some reason, but the effect of that choice is that he has deprived the children of a proper level of child support. That responsibility has therefore been sheeted home to the wife almost exclusively.

38In all those circumstances, I accept that an apportionment of 20% in the wife’s favour is appropriate.

39On an overall basis that means the wife is entitled to 80% of the abovementioned assets. That figure amounts to $612,850. This includes her superannuation.

40That would leave the husband with the amount of $153,212 (20%), together with any other assets that he may have in his possession. The wife has no knowledge of any further assets. It may well be that he owns other assets such as a car, boat, furniture etc.

41In 2002, the husband and wife each contributed approximately $57,000 to the purchase costs of Property P. The net proceeds of sale from that property will be about $666,892 (if the property sells for $925,000 and the wife’s father is subsequently repaid). The husband is entitled to an overall amount of $153,212. That amount is approximately 23% of the above anticipated net sale proceeds. I should fix a percentage of the net proceeds to go to each party in order to fairly take into account the potential that the property might sell for a higher or lower price than has been set out in these reasons.

42Once the property is sold and the costs and the wife’s father have been repaid, the husband should receive 23% of the net sale proceeds and the wife will then receive 77% of the net sale proceeds.

Are the proposed orders just and equitable?

43The orders sought by the wife provide that she be the sole trustee for sale of the property. I accept that this order is appropriate. It also provides for her father to be repaid together with interest. I accept that is a reasonable order also. The amount that each party will receive in my view is a just and equitable outcome and the form of the orders represent a just and equitable outcome.

44In all the circumstances therefore I intend to pronounce orders generally pursuant to the wife’s minute filed on 26 June 2015. I will otherwise hear from counsel for the wife in relation to the issue of costs given that that has been claimed in the final orders sought.

Orders

1.That [Property P] be immediately marketed for sale with the wife to nominate the real estate agent to effect the sale.

2.That the wife be appointed as sole trustee for the sale of [Property P] and be more particularly described as being [Lot x] on [Strata Plan xxxxx] in Certificate of [Title Volume xxxx] [Folio xxx].

3.That upon the sale of the [Property P], the sale proceeds be distributed as follows:

(a)In payment of $238,108.07 to [Mr Xander] with additional interest accrued at the rate of $31.66 per day from 15 July 2015;

(b)In payment of real estate commission of sale and advertising costs;

(c)77% of the remaining balance to the wife; and

(d)The remaining balance to the husband.

4.That each party retain all assets in their name, possession or control including but not limited to superannuation benefits, vehicles, funds in bank and furniture.

5.That each party indemnify the other for all liabilities in their respective names including but not limited to personal loans, taxation liabilities or credit card debts.

6.That pursuant to s 106A of the Family Law Act 1975 a Registrar of this Court sign the following documents on behalf of the husband:

(a)Discharge of mortgage documents for [Property P]; and

(b)Transfer of vehicle registration form for [Citroen] registration number [xxxxxxx] from the name of husband to the wife;

(c)Any other documents require to give effect to these orders.

7.The proceedings otherwise be dismissed.

I certify that the preceding [44] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Secretary