York and Sanders

[2016] FCCA 1201

FEDERAL CIRCUIT COURT OF AUSTRALIA

YORK & SANDERS [2016] FCCA 1201

Catchwords:
FAMILY LAW – Property – issue of apportionment of joint debt of the marriage – remainder of property settlement reached by consent of parties in overall favour of the wife – consideration of whether to apportion joint debt in the same percentage as the overall property settlement split – order made that parties be equally liable for the joint debt.

Legislation:

Family Law Act 1975 (Cth), ss.75, 79

Cases cited:

Stanford & Stanford [2012] HCA 52

Applicant: MR YORK

Respondent: MS SANDERS

File Number: MLC 8331 of 2015

Judgment of: Judge Wilson

Hearing date: 18 March 2016

Date of Last Submission: 18 March 2016

Delivered at: Melbourne

Delivered on: 22 March 2016

REPRESENTATION

Solicitor-advocate for the Applicant: Mr J. McDermott

Solicitors for the Applicant: James McDermott Barrister & Solicitor

Counsel for the Respondent: Ms A.L. Juneja

Solicitors for the Respondent: Dandenong Family Lawyers

ORDERS

1. Within 30 days of the date of this Order, the wife pay the sum of $6,200.00 to the (omitted) Bank on account number (omitted), being the personal loan in the name of the husband.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 8331 of 2015

MR YORK

Applicant

And

MS SANDERS

Respondent

REASONS FOR JUDGMENT

(As revised from transcript)

1. By initiating application filed on 3 September 2015, Mr York (“the husband”) sought parenting and financial orders following separation between the husband and Ms Sanders (“the wife”) in June 2014. On 17 March 2016 Ms Juneja, counsel for the wife, and Mr McDermott, solicitor-advocate for the husband, informed me that their clients had agreed on extensive parenting orders in relation to the child of the marriage, X born (omitted) 2008 (“the child”). Ms Stravrakakis, counsel for the Independent Children’s Lawyer, was heavily involved in formulating those final consent parenting orders. 

2. When pronouncing consent orders I congratulated the husband and wife, as well as the legal representatives involved, for the very sensible and pragmatic approach all displayed towards the resolution of the parenting issues. At the end of the Court day on 17 March 2016, Mr McDermott and Ms Juneja informed me that their attempts to resolve the property issues had been earnest and partially fruitful yet not ultimately successful. The case was listed for 18 March 2016 for the trial of the property division aspects of the case.

3. On 18 March 2016, Mr McDermott and Ms Juneja informed me that they neither desired to lead viva voce evidence nor cross-examine any witness, preferring instead to rely on the material and affidavits already sworn or affirmed in the proceeding. They informed me that very little factual material was contested and that they wished to proceed by way of submissions, a course to which I acquiesced. The uncontested factual material revealed the state of assets and liabilities of the parties, their respective contributions and in respect of the single item on which they were unable to reach agreement, thereby requiring a determination by me.

4. Before turning to that, let me set out some of the more important matters that were not disputed. The wife was born on (omitted) 1965. The husband was born on (omitted) 1968. They married in (omitted) 2008. The child was born on (omitted) 2008. The husband and wife separated in June 2014. Immediately prior to their separation, the husband and wife lived in the former matrimonial home located at Property W, (“the former matrimonial home”). Following separation, the wife and the child have continued to live in the former matrimonial home.

5. The value attributed to the former matrimonial home was between $425,000.00 and $440,000.00, of which a sum in excess of $300,000.00 was and remains due to the mortgagee. The husband swore that, in approximate terms, the net equity position of the husband and wife was in the vicinity of $170,000.00. The former matrimonial home, representing the major asset of the marriage, had been acquired in joint names as vacant land on which the husband and wife constructed a dwelling, some of the cost of which was funded by the wife’s pre-marriage savings while the husband, according to his affidavit material, was the primary income earner during the marriage.

6. The liability to the mortgagee recognised a payment by the husband in 2010 when he applied the sum of $25,000.00 in reduction of the mortgage then outstanding. The mortgage debt also recognised payments applied by the wife after she received an inheritance of almost $33,000.00. It was common ground that the wife’s income as a (occupation omitted) was regularly deposited into the joint account operated by husband and wife. It was also common ground that the sum of $12,400.00 was owing.

7. Mr McDermott told me that funds aggregating $12,400.00 raised largely from draw down on available funds from credit cards was wholly applied in meeting joint debts of the marriage. Counsel for the wife said nothing contradictory to Mr McDermott’s submissions on point. This case, while contested, proceeded with an uncharacteristically high degree of agreement, there being one issue only in dispute – the debt of $12,400.00 and who should meet that debt. Both parties agreed that it was just and equitable for me to make orders under s.79 of the Family Law Act1975 (Cth) (“the Act”).

8. Independent of their concession on that issue, the fact of their separation and their desire to divide assets to enable them to move on with their lives gives voice to the desirability for me to make orders under s.79 of the Act, being satisfied, as I am, under s.79(2) of the Act that it is, in fact, just and equitable to make orders for division of property. That approach is sanctioned by the High Court’s first of three propositions espoused in Stanford & Stanford.[1] The parties both advanced mirror submissions that joint registered proprietorship in the former matrimonial home should be transferred solely into the name of the wife.

   [1] [2012] HCA 52.

9. It follows from any such order that the mortgage, in favour of (omitted) Bank (“(omitted)”) in the joint names of husband and wife as mortgagors, must be discharged, that the wife should thereafter be the sole mortgagor under that mortgage and that the wife should indemnity the husband against all liabilities to (omitted) Bank under the mortgage. It seems to me to be just and equitable that I make orders to give effect to that position. Those orders render unnecessary the wife’s alternative submission for the former matrimonial home to be sold.

10. In addition to the orders in relation to the transfer of registered proprietorship of the former matrimonial home, both parties agreed that the husband should be paid a lump sum. They identified the sum of $30,000.00. The parties submitted that the payment of that amount was a just and equitable payment as the husband is currently unemployed and that, over the life of the marriage – so Mr McDermott submitted and Ms Juneja did not contradict – the husband paid the majority of outgoings.

11. Mr McDermott submitted and Ms Juneja did not disagree that a division of property in terms mentioned above represented a split of something in the order of 60 – 70% in favour of the wife. The proposed payment to the husband of the sum of $30,000.00 is, likewise, just and equitable. That sum should be paid within 30 days.

12. There remains the liability of $12,400.00. The uncontradicted evidence was to the effect that the sum of $12,400.00 was incurred as to whole in order to meet joint debts incurred and paid during the currency of the marriage. The funds were applied for joint purposes and so it follows that the burden of the division of those funds should likewise be jointly shared as to 50% by the wife and as to the other 50% by the husband.

13. During argument I had given consideration to apportioning that debt in the same proportions as was reflected by the agreed proportion of division of the property – that is to say, in or around 70% to the wife and 30% to the husband. While superficially attractive and arithmetically supportable, that analysis ignores the fact that the debt was generated to meet joint liabilities of the parties during the course of their marriage.

14. The division of responsibility for that debt should be likewise jointly shared. In making this order, I have considered each of the elements of s.79(4) of the Act to which the Court must direct its attention, as well as the matters in s.75(2) of the Act, such as they may be relevant.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Wilson

Date: 18 May 2016