ZIMIN & NICKSON
[2014] FCCA 206
•26 February 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZIMIN & NICKSON | [2014] FCCA 206 |
| Catchwords: FAMILY LAW – Proceedings for alteration of matrimonial property interests – nature of parties’ relationship prior to marriage – husband contends parties were dating and kept finances separate – wife contends parties were in a marriage-type relationship – wife asserts period of relevant relationship nine years – husband asserts four years – implications of this distinction –weight to be given to husband’s initial contribution of capital – special recognition – assessment of contributions – assessment of section 75(2) factors – just and equitable. |
| Legislation: Family Law Act 1975, ss.4(1); 79(1); 79(2); 79(4); 75(2) |
| Jonah v White (2012) 45 Fam LR 460 Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 Bevan & Bevan [2013] FamCAFC 116 Stanford v Stanford [2012] HCA 52 Watson & Ling [2013] FamCA 57 In the Marriage of DJM and JLM (1998) 23 Fam LR 396 In the Marriage of Townsend (1994) 18 Fam LR 505 In the Marriage of Kowaliw (1981) FLC 91-092 Waters & Jurek (1995) FLC 92-635 D & D [2003] FamCA 473 In re: Watson: ex parte Armstrong (1976) FLC 90-059 Mallett & Mallett (1984) FLC 91-507 Pierce & Pierce (1999) FLC 92-844 NHC & RCH (2004) FLC 93-204 Rushton & Rushton [2011] FMCAfam 1259 C & C (2005) FLC93-220 Ferraro & Ferraro (1992) 16 Fam LR 1 Mallett & Mallett (1984) 156 CLR 605 Kane & Kane [2013] FamCAFC 205 Steinbrenner & Steinbrenner [2008] Fam CAFC 193 Clauson & Clauson (1995) FLC 92-595 Ferguson & Ferguson (1978) FLC 90-500 |
| Applicant: | MZ ZIMIN |
| Respondent: | MR NICKSON |
| File Number: | ADC 3933 of 2011 |
| Judgment of: | Judge Brown |
| Hearing dates: | 11, 12, 13 and 14 June 2013 |
| Date of Last Submission: | 22 November 2013 |
| Delivered at: | Adelaide |
| Delivered on: | 26 February 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Richards |
| Solicitors for the Applicant: | Clelands |
| Counsel for the Respondent: | Mr Holland |
| Solicitors for the Respondent: | David Burrell & Co |
ORDERS
In full and final settlement of the parties’ respective applications for settlement of matrimonial property:
IT IS ORDERED AS FOLLOWS:
Within 42 days of the date of these orders the husband transfer to the wife, at the wife’s cost, all of his right title and interest in the property known as and situate at Property B, [B] in the state of South Australia (herein after referred to as “the Property B”).
Within 42 days of the date of these orders the wife transfer to the husband, at the husband’s cost, all of her right title and interest in the property known as and situate at Property A, [A] in the state of South Australia (herein after referred to as “the Property A”).
Concurrently with the transfer of the [B] property to the wife and the [A] property to the husband the parties take all necessary steps and execute all necessary documents to discharge the mortgages secured in favour of the ANZ Bank and the Members Equity Bank standing in their joint names and secured over the [B] property and the [A] property respectively.
The wife keep the husband indemnified in respect of all liabilities and outgoings secured against the [B] property and keep him indemnified in respect of all monies secured by the jointly held mortgage in favour of the ANZ Bank secured against the [B] property.
The husband keep the wife indemnified in respect of all liabilities and outgoings secured against the [A] property and keep him indemnified in respect all monies secured by the jointly held mortgage in favour of the Members Equity Bank secured against the [A] property.
Concurrently with the transfers of the [B] property and the [A] property referred to in orders one and two hereof and the discharge of the mortgages referred to in orders three and four hereof the husband pay to the wife the sum of twenty two thousand dollars ($22,000.00).
Within 42 days of the date of these orders the parties take all necessary steps and execute all necessary documents to dissolve the partnership known as Mr Nickson & Ms Zimin (hereinafter referred to as “the partnership”) as at 30 June 2013 and have all necessary taxation returns and financial statement prepared and filed as necessary in respect of the partnership at the husband’s sole expense.
The wife assign to the husband all her right title and interest in the partnership including all her interests in any loan accounts standing in her name in the partnership as at 30 June 2013 and the husband keep the wife indemnified in respect of any liability she may have arising out of the partnership.
Pursuant to section 90MT(1)(a) of the Family Law Act, 1975 there be a splitting order, in the sum of twenty-three thousand dollars ($23,000.00), made in the wife favour out of the accumulated superannuation currently standing in the husband’s name and pursuant to section 90MT(4) of the Act a base amount be allocated to the wife out of such superannuation as nominated by the husband according to the provisions of order (10) hereof.
In order to give effect to the order (9) hereof, the husband nominate to the wife’s solicitors the fund out of which he proposes that the aforesaid splitting order be made within 42 days of the date of these orders.
The solicitor for the husband serve a copy of these orders on the Trustee of fund as nominated by the husband pursuant to order (10) hereof by 27 March 2014 and thereafter the aforesaid Trustee has liberty to relist the matter in the event that the trustee is unable to comply with order (9) hereof but otherwise the operative time for the aforesaid splitting order shall be 24 April 2014.
The trustee of the fund nominated by the husband pursuant to order (10) hereof and the wife in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all necessary documents as are required to calculate the payment entitlements of the wife in accordance with order (9) hereof.
As and from the date of this order the husband retain for his sole use and benefit, absolutely free from any further claim or demand of the wife:
(a)all furniture and effects in his possession, power and control;
(b)all motor vehicles in his possession;
(c)any savings and investments in his sole name;
(d)any superannuation entitlement, long service leave, annual leave or other work related benefits, subject to the provisions of order (9) hereof;
(e)his personal effects;
(f)the real property situated at [M] registered in his name;
(g)the real property situated at Property G, [G] registered in his name;
(h)all assets of the partnership, including the tractor and the plant and equipment relating to it;
(i)any other real and/or personal property and/or financial resources of the husband in the husband’s name and/or possession not otherwise specified herein.
As and from the date of this order the wife retain for her sole use and benefit absolutely free from any further claim or demand of the husband:
(a)all furniture and furnishings in her possession, power and control;
(b)any motor vehicle in her possession;
(c)Any savings, shares and investments in her name;
(d)any superannuation entitlement, long service leave, annual leave or other work related benefits;
(e)her personal effects.
(f)any other real and/or personal property and/or financial resources of the wife or in the wife’s name and/or possession not otherwise specified herein.
Each party do all things necessary, including executing all necessary documents to give effect to these orders.
Liberty to apply on short notice for any consequential orders needed to give effect to these orders.
All applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Zimin & Nickson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 3933 of 2011
| MZ ZIMIN |
Applicant
And
| MR NICKSON |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties to these proceedings are Ms Zimin “the wife” and Mr Nickson “the husband”. The proceedings relate to the settlement of matrimonial property.
There can be no dispute between the parties that they married, at [omitted], on [date omitted] 2008. The existence of the marriage is proved by a certificate, issued under the Marriage Act 1961, which is signed by each of the parties concerned, in the presence of witnesses and the celebrant, who officiated at the marriage.
What is in dispute is the date on which the parties began to live together and weave their financial and personal affairs together, in a marriage-like arrangement, which was later formalised, at [omitted], in April of 2008, and what are the legal implications of those arrangements prior to their marriage.
The wife’s position is that the relevant date is April of 2002. On the other hand, although the husband accepts that he and Ms Zimin had met each other, in 2002, whilst both were studying at the University of [omitted], and had begun socialising together shortly thereafter, the date on which a de facto relationship began between them should be regarded as being June 2006. Prior to this time, he would characterise the parties’ relationship as being a “dating and sexual” one.
The parties also disagree on the date on which their marriage irreconcilably broke down and they began to lead separate lives, both in a financial and emotional sense. From the husband’s perspective, the relevant date is mid-2010, when the wife vacated the parties’ former marital home in [A] and moved to live in Adelaide.
From the wife’s perspective, the relevant date is June of 2011. She acknowledges that she had moved from [A] a year earlier, but only so that she could take up an employment opportunity in Adelaide, with the husband’s acquiescence. She asserts that she and
Mr Nickson remained a couple, although they lived apart for regular periods of time, during this period.
Accordingly, Ms Zimin asserts that the effective length of relationship, between the parties was one of approximately nine years, whilst the husband would assert the marriage has been a short one of around four years in duration.
The parties have different backgrounds and there is a significant disparity in their ages. The wife was born in China [in] 1981. She came to Australia in September 2001 to further her English speaking skills, with a view to undertaking tertiary studies in this country.
Thereafter, she completed a Bachelor of [omitted] degree, graduating in July of 2003. She acknowledges that her parents, from China, paid her tuition fees as well as many of her recurrent living expenses and she herself did not have any property of significant value, when she met Mr Nickson.
The husband was born in Australia [in] 1966. He grew up in [A], an area of rural South Australia, to the north of Adelaide, where his father was a share farmer. After leaving school, he commenced employment with [omitted], where he worked for a number of years, until he began a [omitted] degree, at the University of [omitted], graduating in 2003. In September 2003, he joined the [occupation omitted].
Accordingly, by dint of his greater age and length of time in the workforce, in Australia, regardless of the date on which a marriage-type relationship may later be found to have coalesced between the parties, the husband had the opportunity to acquire significant assets, both in the form of real and personal property, as well as superannuation, before the parties actually met.
Underpinning Mr Nickson’s approach to this case is his contention that he has taken advantage of this opportunity fully and, by dint of a frugal lifestyle and prudent investment decisions, he had acquired property and superannuation of significant value prior to meeting Ms Zimin and certainly before any relationship of a type, which attracts the application of the relevant provisions of the Family Law Act, had begun. Essentially, he contends that it would be inequitable for the court to make orders altering his interests in property which was acquired by him, prior to him meeting Ms Zimin.
The wife accepts that the husband purchased a unit situated at Property T, [T] in 1991. Indeed, it is her case that this property was the parties’ joint home from April 2002 onwards and she made direct financial contributions towards its upkeep and conservation.
In addition, in 1995, it is common ground between the parties, that the husband acquired a half interest in a rural property located at [M], also to the north of Adelaide. The husband’s parents had originally purchased the property in 1986, but on the death of the husband’s father, in 1998, it had passed to Mr Nickson’s mother (Mrs N).
Mrs N had difficulty in maintaining the property, particularly in terms of ensuring the farmhouse on it remained habitable. She needed capital to refurbish her accommodation. This resulted in the husband agreeing to purchase one half of Mrs N’s interest in the property, in 1995, for $50,000.00, which he funded by a mortgage of around $30,000.00, with the balance coming from his savings.
Thereafter, Mr Nickson began to use the land at [M] for share farming and running cattle, whilst his mother occupied the dwelling on the property. The husband operated the farming business, relating to the [M] land, under the name of “[C]”. Mrs N was not financially interested in the business.
The husband also acquired a further interest in a piece of real property in February 2006. This was Property G, [G]. The purchase price was $420,000.00, which was entirely borrowed. The property was purchased as an investment, with a view to gaining taxation advantage, for the husband, through negative gearing.
From the wife’s perspective, she was integrally involved in the purchase of the [G] property, which fell squarely in what she asserts is the period of the parties’ financial inter-relationship. The husband does not agree, asserting that Ms Zimin “had no involvement or even knowledge of this property until after I had completed the purchase.”[1]
[1] See husband’s affidavit filed 24 July 2012 at paragraph 39(d)
Again the husband asserts that the parties were “dating” with waxing and waning degrees of intensity from 2002 onwards. He agrees that, for extended periods of time, including for a period of about twelve months, from August 2004 onwards, Ms Zimin lived in his unit at [T].
However, it is his position that the parties kept their finances largely separated, in this period, with him bearing the capital expenses related to the property and the parties sharing recurrent expenses, in a situation analogous to that of a home owner and a boarder.
Again, the wife does not agree. She refutes any suggestion that she was the husband’s border or lodger. Rather, she asserts that the parties, in these various periods, can only be considered to be a couple, who shared the intimacies of domestic life together, with her attending to many joint domestic duties within the household, which benefited Mr Nickson.
For his part, the husband asserts that the wife has consciously sought to exaggerate the extent of the parties’ inter-relationship with one another, for the purpose of the current proceedings. In addition, he asserts that, from mid-2002 until mid-2004, the parties maintained separate residences and he did his own chores at his home in [T], including doing his own grocery shopping.
He concedes that Ms Zimin would visit his home regularly and stay overnight, whilst he would do the same, so far as Ms Zimin’s home was concerned. However, in this period, he asserts that he and the wife maintained separate residences and completely separate finances. He would categorise this arrangement as “not unusual for a modern dating relationship”.[2]
[2] Ibid at paragraph 31
He would characterise the period of the parties’ mutual occupation of the [T] property, for twelve months from August 2004 onwards, in a similar way. It being his position that he held back from merging his financial affairs, with those of Ms Zimin, whilst obviously the two were intimate in many other ways.
He refutes any suggestion that the parties’ relationship could be properly described as a quasi-marital one, at this stage. Rather, he asserts that the parties were living together, in the sense of being dating flatmates, which he would characterise as being a contemporary form of relationship, far short of marriage or a de facto form of marriage.
Against this background, it is Mr Nickson’s position that the wife lived independently of him from August 2005, until June 2006, when she moved back into the [T] property, by which time, the property was mortgage free and valued at approximately $235,000.00.
As previously indicated, this date (June of 2006) is the one which Mr Nickson asserts marks the beginning of the parties’ financial relationship with one another, in the sense that they were mutually committed to one another and intent on combining their financial resources.
This scenario presents one of the most significant areas of controversy between the parties. From the husband’s perspective, as at June of 2006, when to use his terminology the parties “commenced [their] de facto relationship proper”,[3] he owned property and superannuation valued at approximately $600,000.00, whereas Ms Zimin had only a motor vehicle of modest value.
[3] Ibid at paragraph 47
This sum of $600,000.00 is chiefly made up of the [T] property ($235,000.00); the land, stock and plant at [M] ($198,500.00); and his superannuation, acquired whilst he was employed by the [A] ($121,000.00).
It is Mr Nickson’s case that Ms Zimin has made no contributions, either directly or indirectly, to the acquisition or preservation of these various pieces of property, which in the main, were demonstrably acquired prior to the parties meeting one another and having any form of relationship together.
In all these circumstances, he asserts that it would be grossly unfair to him for the court to find that Ms Zimin has any form of equitable interest in any or all of these pieces of property by virtue of what he would characterise as a boyfriend/girlfriend relationship, which fell far short of a state of a “coupledom” [4] between the parties, certainly so far as the period prior to mid-2006 is concerned.
[4] See Jonah v White (2012) 45 FamLR 460 at 471 per Murphy J
Needless to say, the wife does not agree. She would characterise her moving out of the [T] property, in August 2005, as a transitory episode marking a brief hiccup in the parties’ intimate relationship with one another. She asserts that although, in nominal terms, she was renting other accommodation, in reality she was living with Mr Nickson at [T].
In this context, she asserts she has made many diverse contributions towards the acquisition, conservation and improvement of the various items of property, nominally owned by the husband from mid-2002 onwards, which contributions, if not quantified in some way, in these proceedings, would represent a gross inequity to her.
The parties graduated from university on the same day in 2003. Thereafter both were able to gain full-time employment – the wife as an [omitted]; the husband as a [omitted]. Their salaries have been roughly equal in the period since. In these circumstances, it is the wife’s contention that her income must necessarily be regarded as having been contributed, to joint purposes, referable to her relationship with Mr Nickson from 2003 onwards.
Mr Nickson accepts that this is the case from mid-2006 onwards, which marks the period of the parties’ engagement; subsequent marriage; and the purchase of a jointly owned rural property at [A], associated with the commencement of a partnership, between the parties under the title Mr Nickson & Ms Zimin (hereafter referred to as “the farming partnership”), in July of 2008.
The [A] property was purchased in October 2007, approximately two months after the parties had become engaged. Its purchase price was $290,000.00, with associated costs of around $22,000.00. It consists of 102 acres of farming land. It did not and still does not have a dwelling upon it.
Given his background, the husband’s preference was to live in the country and to extend his involvement in farming, which stemmed from his ownership of the [M] property. This was the motivation for the purchase of the [A] land.
The wife was happy to agree to this proposal. The plan was to build a house on the land, which would be the parties’ matrimonial home. All the moneys required to complete the purchase were borrowed. The wife suggested the farming partnership. Her professional discipline is [omitted]. From the husband’s perspective, he was happy to agree to the partnership, which made sense to him for taxation reasons.
Shortly after the purchase of the [A] property, Mr Nickson sold the unit in [T]. The sale settled in November of 2007, with all the proceeds being used to reduce the mortgage on the [A] land, which was left with a modest debt of $5,000.00.
Against this background and in the lead up to their marriage, the parties moved to rented accommodation in [A], close to their land. The mortgage on [A] was discharged in August of 2008, by payment of approximately $5,000.00, which had resulted from a tax fund originating with Mr Nickson.
It is essentially Mr Nickson’s position that, as the [T] units was acquired by him in 1991 and it was essentially debt free by March of 2006, it is demonstrably the case that its proceeds funded the purchase of the [A] land, which therefore must be regarded as a contribution solely emanating from him.
Throughout the marriage, the parties farmed at both [M] and [A], under the ageis of their partnership, growing and selling hay and grain, as well as raising cattle. Capital expenditure was required for these various enterprises, which the husband asserts was funded by a line of credit, secured against his interest in the [M] farming property.
Given that the [M] land was acquired many years prior to him meeting Ms Zimin, it is Mr Nickson’s case that most, if not all, of the capital expenditure required to get the [A] farm up and running came from him. It is also his position that basic considerations of equity and fairness dictate that his interest in the [M] land should be quarantined from the remit of the proceedings.
It is also Mr Nickson’s case that he was the driving force behind the farming partnership, as it was he who had the background and experience in farming and animal husbandry. He asserts that he managed the partnership accounts, did all the necessary bookkeeping and completed business activity statements, when required. Significantly, he asserts that he either performed or organised all farming activities, which were required on both the [A] and [M] properties.
Mr Nickson asserts that he was responsible for selecting any contractors required to work on either property and otherwise provided all labour and management for the farming operations. It is also his evidence that he made all necessary operational decisions in respect of the farm. He does however accept that Ms Zimin completed relevant taxation returns, for both the partnership and the parties’ individually.
This is another major area of contention between the parties. It is Ms Zimin’s position that she was extensively involved in the farming partnership, both in an operational and administrative sense. It is her evidence that she provided “constant assistance and advice” to the husband in respect of day to day accounting matters and she and Mr Nickson discussed and made joint decisions regarding operational matters, including the selection of sub-contractors, for seeding and harvesting work.
The husband asserts that the wife’s involvement in the farming partnership was limited to preparing its taxation returns, ancillary to the preparation of the parties’ individual returns. It being pragmatic to divide income (or losses) between the two spouses and the preparation of such returns being within the parameters of the wife’s professional expertise. Accordingly, Mr Nickson contends that, with the end of the marriage between the parties, there was no longer any basis, in either law or equity, for him to share profits from the farming partnership with the wife or to account to her.
The wife does not agree. It is her case that she has invested both her expertise and regular components of her income into the farming partnership and therefore it is the husband’s responsibility to account to her, in respect of its affairs and any profits made, post-separation, should be included in the parties’ pool of matrimonial assets, referable to these proceedings.
This issue is closely related to the controversy surrounding the date on which the parties finally separated. As previously indicated, it is the husband’s case that the relevant date is July 2010. He asserts that the wife told him she was intent on moving back to Adelaide “with or without” him.
Given his situation at the time, he was not prepared to leave [A], as he enjoyed the lifestyle and farming opportunities it provided for him. In Mr Nickson’s view, as the parties have lived in separate households since July 2010, this date marks their final separation.
On the other hand, it is Ms Zimin’s position that she moved to Adelaide, largely with Mr Nickson’s agreement, because she had secured an attractive [omitted] position there, which was more lucrative than her then employment in the [A] area.
In these circumstances, it is the wife’s case that the parties did not end their marriage, when she departed the rented home in [A]. Rather, it is her case that the parties regularly spent overnight periods with one another and explored options, such as buying a rural property closer to Adelaide, which would satisfy their respective employment and personal aspirations.
The wife asserts that the parties’ marriage came to an end in June of 2011, when the husband informed her that he was involved with another person. From Mr Nickson’s perspective, this is a complete fabrication. Although he agrees that he did see Ms Zimin, from time to time, after June of 2010, it was not as frequent as she now contends and the nature of his involvement with Ms Zimin, on these occasions, was not conjugal in nature.
Besides the properties situated at [A], [M] and [G] respectively, these proceedings concern one further piece of real property. This is a property located at Property B, [B], which is registered in the wife’s sole name.
The [B] property was purchased off the plan in December of 2009. The purchase price was obtained by drawing down a sum of around $100,000.00, from the previously repaid mortgage secured against the [A] property, with the balance ($368,000.00) being obtained by way of mortgage from the ANZ Bank, secured against the [B] property itself.
The parties disagree as to the rationale for the purchase of the [B] property. From the husband’s perspective, it was the wife’s idea, to which he reluctantly agreed. From the wife’s perspective, the purchase of the property was a joint decision and it was registered in her sole name to obtain maximum taxation benefits, as the husband already owned the negatively geared property at [G].
It is common ground between the parties that the [B] property was purchased on the basis that it would be tenanted, with rent received being used to partially fund the mortgage payments required. However, given there would be a shortfall between the rent received and the moneys required to pay the regular mortgage instalments and other outgoings, other regular funds were required to maintain the property.
It is the husband’s position that the finance for the purchase of the [B] property was made available by the bank concerned on the basis of the wife’s income and employment history. Accordingly, it is his position that the wife would be responsible for paying the shortfalls, arising from the negative gearing of the property.
Considerable controversy has arisen between the parties, since separation, regarding payment of moneys required to finance the two mortgages referable to the [B] property. It is the wife’s position that she has made the more significant contributions, in this regard, than has the husband. He does not agree. It is his position that he has contributed one half of the mortgage repayments, in respect of the property, since separation.
The wife describes herself as coming from a “middle class” Chinese family. In those circumstances, given the much greater cost of living in Australia, it represented a significant financial commitment for her parents to finance her tertiary studies in Australia, which amounted to a sum well in excess of $64,000.00, much of which was borrowed from relatives. Ms Zimin also describes her parents as being emotionally devastated and humiliated at the demise of their daughter’s marriage.
Originally, in these circumstances, it was Ms Zimin’s case that her parents would require her to repay, in entirety, the moneys advanced to her to fund her education and this was a factor to which the court needed to have regard in these proceedings, namely Ms Zimin had a significant level of debt to her parents.
This is no longer Ms Zimin’s position, nor that of her mother, Ms L, who also gave evidence in these proceedings. I accept that Ms Zimin and her parents adhere to the teachings of Confucius, which emphasise the obligations of parents to provide for their children, including ensuring that they have the best possible level of education available and the reciprocal obligation of children, when they are able, to provide for their parents in their old age.
Accordingly, I accept that Ms Zimin has a moral obligation to support her parents, in their old age, given that they have provided her with the means to obtain tertiary qualifications, which furnish her with the capacity to earn a comfortable income. I also accept that Ms Zimin will do whatever she can to satisfy this obligation in future. However, Ms Zimin is not under any legal obligation to repay the moneys advanced on her behalf. Accordingly, this is not a specific factor to be taken into account in these proceedings.
I also accept that both she and her parents were devastated at the failure of the parties’ marriage and this has been a source of significant embarrassment for Ms Zimin’s parents in China.
Ms Zimin characterises this as a loss of face for her parents, particularly so far as family and friends in China are concerned.
In my assessment, factors of this kind have added to the difficulty and emotional intensity of the current proceedings, which have been protracted. Both parties now perceive that the other has taken advantage of him or her, during the course of their relationship and these mutual perceptions have informed the respective stances of the parties in the case.
Besides the marriage between the parties, which was celebrated at [omitted], in April of 2008, the parties underwent a second wedding ceremony, in the presence of the wife’s parents, relatives and friends, in [omitted], China, in May of 2008. From the wife and her parents’ perspective, the marriage in China was a lavish affair, which has added to their embarrassment and humiliation now at the current circumstances.
The wife’s parents substantially paid the costs of the wedding and related expenses, which Ms Zimin calculates come to a sum around $50,000.00. It is the wife’s case that this is a contribution, made on her behalf, which benefitted both parties and which should be attributable to her in these proceedings. The husband asserts that the wife has over emphasised this aspect of the case.
The parties each had individual bank accounts during their marriage and also had a joint account with the HSCB Bank. Given the extent of their liabilities; the existence of two negatively geared properties; and the fact that the parties were saving to fund the construction of a house on the [A] land; necessarily these banking arrangements were complicated. There is now controversy regarding the implications of the parties’ various banking mechanisms.
It is agreed that each party paid moneys, generated from their respective employment, into the joint account from which joint expenses were paid. The parties disagree as to the extent of their respective payments, into the joint account and what are the implications of this in the current proceedings. In addition, both parties had credit cards, which were cleared monthly.
The husband’s position is that, after the payment of the mortgage on the [G] property, all his salary was transferred into the joint account, which thereafter was used for joint purposes. On the other hand, he asserts that only such moneys, as were required to meet any shortfall in these expenses, was transferred from the wife’s account, into the joint account. It being the case that the wife’s salary was paid into her individual bank account.
The husband’s position is that the net result of these various transactions, each month, was that any surplus from the parties’ joint funds remained in the account in the wife’s sole name. From his perspective, these sums accumulated to an amount of $28,000.00, up until June of 2010, which is to be regarded as being a sum referrable to the parties’ joint savings.
From July of 2010 onwards, the wife rented accommodation for herself in Adelaide. She has expended the sum of $28,000.00, which stood in her sole bank account, from this date onwards. She would characterise this expenditure as relating to normal everyday living expenses, which are not relevant to these proceedings.
On the other hand, the husband would categorise this sum of $28,000.00 as representing a premature settlement of matrimonial property, which has been made in the wife’s favour. In these circumstances, he asserts that it is appropriate for the sum in question to be notionally added back into the parties’ pool of marital assets and allocated to Ms Zimin as part of her final marital property entitlements.
The parties plan to construct a home, on the [A] land, never materialised, although a building designer was retained by them to draw up a blue-print for the proposed home, which cost around $5,000.00. From the husband’s perspective, these plans were sidelined by the wife’s desire to purchase the investment property off the plan at [B] and her subsequent decision to move into Adelaide.
The parties are likely to be able to remain in the workforce for many years to come, although the wife has recently suffered a redundancy from her [omitted] position. As such, each is likely to have an ability to derive an income for the foreseeable future. As previously indicated, up until this stage, there has been no great discrepancy in their respective levels of remuneration.
In all these circumstances, it is the husband’s position that the parties’ prospective needs are broadly analogous and factors related to what lawyers term future needs do not call for any specific alteration in respect of how their marital property should be divided as a consequence of these proceedings.
The wife does not agree. She would characterise her professional experience as being limited, given her comparatively recent graduation. It is also her case that she suffers some health issues, which may impact upon her employment opportunities in future. Specifically, she has suffered a number of seizures, one of which she attributes to the husband’s bullying behaviour towards her.
In these circumstances, she would categories Mr Nickson’s future prospects as being superior to hers, particularly as he will always have farming to fall back upon, as well as many years before him in [occupation omitted].
Both parties presented as somewhat bitter, in respect of what happened between them, during their relationship, particularly from June of 2010 onwards. The wife presenting as being resentful at her perception that the husband has rejected the validity of their relationship from 2002 onwards and what she contributed from this date onwards.
And, for his part, the husband presenting as being the victim of the wife’s unreasonable and grasping demands on his previously accumulated property. As a result of these matters, there is now little love lost between the parties and each appears to feel hard done by, as a consequence of the other’s behaviour.
For all these reasons, the proceedings were hard fought, with each party having a completely different slant on many significant aspects of their relationship. As previously indicated both the husband and the wife feel they have been exploited by the other.
These differences of view are most emblematically expressed by reference to how each party asserts their matrimonial assets should now be divided between them, at the end of their marriage.
From the wife’s perspective, whilst conceding the husband’s significant initial contributions of capital, at the outset of their marriage, she asserts that the parties’ property should be divided 40 per cent to her and 60 per cent to the husband, which includes a component of 5 per cent attributable to her prospective needs.
On the other hand, the husband asserts that the appropriate division, bearing in mind what he would term a short marriage between the parties, characterised by his overwhelming financial contributions at its outset, is one of 90/10 per cent, favouring him.
Underpinning his case is his contention that it would be fundamentally inequitable for the court to embark on altering his legal proprietorial interests in a number of items of property, which he acquired prior to the parties’ meeting, specifically the land and plant at [M]; the [G] property; and his [A] superannuation.
On the other hand, Ms Zimin asserts that, given the existence of the farming partnership between the parties, she has made significant indirect contributions to the [M] land because she was integrally involved in the parties’ joint primary production endeavours, over a reasonably lengthy period. In addition, she argues that, from 2003 onwards, when she joined the workforce, it is indisputably the case that she contributed her salary to joint marital purposes.
Fundamentally, she would refute any suggestion that the marriage type relationship, between the parties, can be characterised as being short. Rather, she would assert that, over a relationship of around nine years in duration, she made many varied and valuable contributions to the mutual financial and domestic well-being of the parties, which fairness dictates should now be taken into account in the current proceedings.
These proceedings are intended to resolve the various disputes between the parties and, as far as possible, finalise their financial relationship with one another, so that each may move on with the remainder of their lives.
The Legal Principles Applicable
Part VIII of the Family Law Act 1975 is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act.
Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to section 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant.
Paragraphs (a); (b); and (c); categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled, as it required the application of a preferred approach. This approach entailed a four step process, described by the Full Court as follows:
·identification and valuation of the property of the parties;
·identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 79(4) (a) to (c);
·identification and assessment of the various matters in section 79(4)(d) to (g) including to the extent they are relevant, the matters in section 75(2) – the prospective needs phase;
·considerations of justice and equity.[5]
[5] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]
The general applicability of this four step process has been recast, to some extent, in the light of what has been said recently by the High Court in the matter of Stanford v Stanford. [6] In the case, the majority stated that:
“It will be recalled that s 79(2) provides that "[t]he 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". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [7]
[6] Stanford v Stanford [2012] HCA 52
[7] Ibid at [35] – [36]
In Stanton the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of section 79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation. The majority said as follows:
“In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of the 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. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4).” [8]
[8] Ibid at [42]
In Bevan the Full Court noted that the above paragraph was likely to encapsulate the vast majority of cases coming before courts such as this one, namely that the circumstances of the parties concerned, following the end of the marriage between them, made it readily apparent that it was just and equitable to make a property order and therefore it would be open to the court concerned to adopt the multi-stepped process endorsed by cases such as Hickey.
In Bevan the majority of the Full Court (Bryant CJ and Thackeray J) said as follows:
“Although the High Court did not disapprove the four step process, we accept it did not approve it either... However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
…
Stanford will also serve as a reminder that the four step process ‘merely illuminates the path to the ultimate result’.”[9]
[9] See Bevan (supra) at [65] and [71]
From this, I take it, the four step process remains a valid approach in the vast majority of cases, provided care is taken not to overlook the requirement that all orders altering property interests in proceedings arising under the Act be justice and equitable.
In Stanford the High Court propounded three fundamental propositions, adhering to the application of section 79, which I will summarise as follows:
·Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify:
“according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”
·Secondly, although the power to make a property order is broad. The power is not to be exercised according to an “unguided judicial discretion”. As such,
“whether it is just and equitable to make the order is not to be answered by assuming that the parties’ rights to all interests in marital property are or should be different from those that then exist.”
·Thirdly, whether the making of a property settlement order is just and equitable does not turn on the assumption that one or other of the parties to the marriage has the right to any interest according to a consideration of the matters (including financial and other considerations) arising under section 79(4). Rather the justice and equitable consideration under section 79(2) must also be considered. For:
“To conclude that making an order is ‘just and equitable’ only because of and by reference to various matters in section 79(4), without a separate consideration of section 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”
In Bevan the Full Court closely considered the application of these fundamental propositions in practice, particularly so far as cases involving property where one party asserts that the other has no existing equitable interest in property held by him or her and so-called notional property, within the context of the risk of conflating the exercises arising under section 79(2) and (4) respectively. This issue arises in consideration of what are the existing legal and equitable interests of the parties to the property arising in the case concerned.
Both such scenarios arise in this case. Mr Nickson, in effect asserts that Ms Zimin has no legal or equitable interest in the [M] land; the [G] property; and his [A] superannuation. In addition he wishes to add back the sum of $28,000.00 into the parties’ pool of assets, which he says represented the parties’ joint saving and which Ms Zimin has subsequently spent.
In respect of the former category of cases, the majority of the Full Court said that:
“… there will be cases, of which Stanford may have been one, where the assertion (or lack thereof) of an existing equitable interest in property held by the other party may be of critical importance in deciding whether it be just and equitable to determine whether it would be just and equitable to interfere with the existing legal ownership.”[10]
[10] Ibid at [78]
In respect of the latter category of cases, the Full Court noted that such notional property, given its non-existence, was unlikely to constitute property of the parties concerned. However its disposal, in appropriate cases, could recognised by the application of the mechanisms arising under section 79(4), particularly section 75(2)(o), which authorises the court to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In Bevan the majority of the Full Court considered it impossible to provide an exhaustive definition of circumstances, where it would be just and equitable to make an order altering the property interests of the parties concerned. However, it was also pointed out by the Full Court that it would potentially erroneous for a trial court to ignore the matters raised in section 79(4) in coming to such a decision.
The majority of the Full Court rejected any notion that the determination of whether it was just and equitable to make a property order was to be considered a threshold issue. It said as follows:
“First…the initial enquiry is to determine the existing legal and equitable interests of the parties. Secondly, although section s 79(2) is cast in the negative and amounts to a prohibition against making any order unless it is just and equitable to do so, the corollary is that if the court does make an order, such an order must be just and equitable.
…
It will be seen from this discussion that while the s 79(2) and s 79(4) issues must not be conflated, they are intertwined because the text of the Act links them.”[11]
[11] Ibid at [86] – [87]
Finn J expressed her agreement with the majority in Bevan but in a separate judgement provided practical guidance, to trial courts such as this, as to how they should go about determining whether it was just and equitable to make a property order. Her honour said as follows:
“The point in the decision making process at which the question of whether it is just and equitable to alter property interests of either party is to be addressed must depend on the circumstances of each particular case. There can be no hard and fast rule.
However, as a general rule, it will, in my view, be useful to identify at a very early point in the judgement what are the existing property interests of the parties and what are the orders that each party is seeking in relation to those interests.
As already suggested, where both parties are seeking alterations of interests in one or other’s property, the question as to whether or not it is just and equitable to make any order, will be more readily answered.
Findings of fact concerning the parties’ financial history (i.e. their contributions) and their present circumstances and future prospects made in the context of s 79(4) will also assist, but such findings cannot (according to Stanford) be conclusive in determining whether or not it is just and equitable to make an order altering any particular property interest.”[12]
[12] Ibid at [166] – [169]
Accordingly, it seems to me that the multi-step process envisaged by Hickey remains relevant but is less prescribed as a consequence of what was said by the High Court in Stanford. In this context, I respectfully adopted was said by Murphy J in Watson & Ling namely:
“As a result of those matters, the Court’s approach to s 79/s 90SM may be less compartmentalised than what a strict or unthinking adherence to four (or three) “steps” might otherwise reveal. The task is essentially holistic; is it just and equitable in the particular circumstances of the particular relationship or marriage under consideration to make an order and, if so, its terms must similarly meet that criteria. Of course, holistic though the approach is, it must be referenced to what the Act requires and care must be taken to ensure that the Court’s reasons make that clear.”
In this particular case, what are the existing legal and equitable interests of the parties, in the various pieces of property concerned, will require a close scrutiny of all the relevant evidence arising. There can be no assumption that Ms Zimin has an entitlement to any piece of property owned by Mr Nickson.
However, whether it is just and equitable to make any particular property order is invariably inextricably interwoven with questions of contribution arising under section 79(4) and the parties’ financial and relationship history with one another. Although the court must be careful not to combine issues arising under section 79(2) with the exercise arising under section 79(4), it is artificial to divorce them from each other. Section 79(2) does not represent a threshold to be crossed prior to the undertaking of the section 79(4) exercise.
Rather, the overall task is a holistic one, to be informed by the idiosyncratic circumstances of each case concerned. However, in most cases, it will be readily apparent that it is just and equitable to make an order altering the property interests of the parties concerned because of their circumstances or the manner in which each has presented their case and the orders sought.
Contributions arising pursuant to section 79(4)(a)(b) & (c) (the so-called second step) can be broadly categorised under two headings. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[14]
[14] See Family Law Act s.79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution, which is inherently less valuable or important than a financial contribution to property.
Section 79(4)(e) mandates the court to have reference to the matters listed in section 75(2) of the Family Law Act 1975. In the main the factors there listed deal with each of the parties’ prospective needs (the so-called third step).
However, as previously indicated, pursuant to section 75(2)(o), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
As previously indicated, under the rubric provided by section 75(2)(o), the court is provided with a discretion to deal with property, which it is convenient to describe as being notional in nature, in the sense that the property in question no longer exists.
Such property usually is confined to one of three categories – money spent in paying legal fees, which unfairly diminishes the matrimonial asset pool;[15] the premature distribution of matrimonial assets;[16] and money or assets wasted through reckless conduct. [17]
122.In Watson & Ling Murphy J said as follows:
“Where the Court has determined that it is just and equitable to make an order pursuant to s 79(2) or s 90SM(3) and there is clear evidence that one party has engaged in conduct and, but for that conduct, the legal and equitable interests of a party or the parties (or the value of those interests) would have be significantly greater, justice and equity may require recognition of the unfairness inherent in those circumstances in the terms of the orders to be made.
How might that be recognised? First, consistent with existing authority, it can be recognised pursuant to s 75(2)(o) (cf s 90SF(3)(r)) (see, for example, AJO v GRO (2005) FLC 93-218, Browne & Green (1999) FLC 92-873 and C & C). Secondly, it might be contended that it might be recognised within the assessment of contributions. This Court has long eschewed the notion of “negative contributions” (see, for example, Antmann & Antmann (1980) FLC 90-908). Nevertheless, it might be argued that the “non-dissipating party” can be seen to have made a disproportionally greater indirect contribution to the existing legal and equitable interests (for example to their preservation) if it is established that, but for the other party’s unilateral dissipation, those existing legal and equitable interests would have been greater or had a greater value.
The assessment of the circumstance under discussion is, ultimately, a matter of discretion (see, for example, C & C at [46] and Townsend at 81,654). Equally, however, authority dictates that it will be “the exception rather than the rule” (C &C at [46]) that a direct dollar adjustment equivalent to the amount of the alleged dissipation of the pool is made to the otherwise entitlement of a party. It may be that aspects of the erstwhile treatment of legal fees pre-Stanford (see, for example, NHC & RCH (2004) FLC 93-204) will require further consideration in an appropriate case.
Importantly, of course, as has been emphasised in many authorities including those cited above, not every dissipation by a party can be seen to involve an affront to justice and equity; again the circumstances of the individual relationship must be assessed.” [18]
[15] See In the Marriage of DJM and JLM (1998) 23 Fam LR 396
[16] See In the Marriage of Townsend (1994) 18 Fam LR 505
[17] See In the Marriage of Kowaliw (1981) FLC 91-092 at 76,644
[18] Watson & Ling (supra) at [33] – [34]
As appears clear from the re-stated principles appearing in Stanton, the “overriding requirement” of section 79 is that considerations of justice and equity should inform the process envisaged therein. The exercise I must undertake is not a “process of social engineering”[19] or of equalisation of assets or financial resources.
[19] See Waters & Jurek (1995) FLC 92-635
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation. My responsibility is to exercise the discretion reposing in me according to considerations of justice and equity.
Marriage is, by and large, a joint enterprise. How much buffer spouses must give one another, when financial set-backs occur, must depend on the degree of consultation and acquiescence in their relationship.[20]
[20] See D & D [2003] FamCA 473 at paragraph 49
The task, set out for me in this case, requires me to balance and compare contributions, which are by their nature different, within the framework of a marriage. Many contributions in a marriage, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value. The discretion I have is a wide one. It is however not an exercise in “palm tree justice”.[21]
[21] See In re: Watson: ex parte Armstrong (1976) FLC 90-059 at 75,270
In this context, the following comments of Gibbs CJ in Mallett & Mallett [22] remain 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 the circumstances of the particular case.”
The orders sought by each of the parties and the application of those orders to their existing property
[22] Mallett & Mallett (1984) FLC 91-507
In a formal sense, it is difficult to glean what specific orders the wife seeks in respect of which specific items of property. Her application, filed 19 October 2011, seeks that there “be such adjustment between the parties by way of final property settlement as this Honourable Court shall deem appropriate in all the circumstances.”
In her case outline, filed in anticipation of trial in August 2012, under the heading Orders Sought, the wife indicated that she sought “orders for the distribution of the matrimonial assets as to 37.5% to the wife and as to 62.5% to the husband.”
As previously indicated, following the completion of evidence, in written submissions tendered on her behalf, the wife now seeks an adjustment of property 35% of the matrimonial pool of assets to be made in her favour.
The court has not been provided with any mechanical details as to how such an outcome is to be achieved. However, in her written submissions, the wife indicated that she sought an order that the property at [A] be transferred to the husband and she be released from any liability in respect of the mortgages secured against the property.
Implicit in her position is that the court should calculate a lump sum of money, to be paid to her, by the husband, to be calculated by reference to all items of property in respect of which both she and the husband have either a legal or equitable interest. Necessarily this includes the husband’s interest in the [M] land and the plant and equipment associated with it, together with the [G] property.
In final amended submissions submitted on his behalf, the husband has provided mechanical details and specific orders, which he seeks to bring about what he consider to be a just final adjustment of the parties’ respective matrimonial property interests. The orders can be summarised as follows:
· He transfer to the wife any equitable interest he has in the [B] property to the wife and the mortgages relating to the property (including the mortgage on the [A] property) be discharged;
· The wife transfer to the husband her legal interest in the [A] property and the husband release her from the mortgage secured against it;
· The wife retain all items of property in her possession, including her superannuation entitlements;
· The husband retain all items of property, both real and personal, currently in his possession, including all assets of the farming partnership;
· The farming partnership be dissolved and the wife assign to the husband all loan accounts, standing in her name and referable to her, as at 30 June 2013 and the husband otherwise indemnify her in respect of the farming partnership;
· The wife pay to the husband the sum of $26,615.00.
In these written submissions, the husband submits that his half interest in the [M] property “should not be part of the divisible asset pool.” His submission is silent in respect of the [G] property, other than it is included in the list of divisible property, tabulated by his counsel, Mr Holland.
However, in a mechanical sense, the husband does not propose any specific orders in respect of the various items of property, including superannuation, which he contends were acquired by him prior to the commencement of any marriage type relationship between the parties. Underpinning the husband’s case is his contention that these items should largely be quarantined from the court’s process in these proceedings.
However, the manner in which the husband has achieved this outcome is by a focus on his assessment of the parties’ respective level of contribution, which he has assessed as being overwhelmingly in his favour.
The question nonetheless remains, as to whether it is just and equitable to make the orders sought by both of the parties. As the Full Court observed in Bevan, section 79(2) and section 79(4) issues are invariably intertwined.
So it is in this case. Necessarily, the orders sought by the wife must touch the [M] land; the [G] property; and the husband’s [A] Superannuation. She wishes the court to approach all the property concerned, in a global sense, and assess contributions against such a global asset pool, so that a lump sum of moneys, due to her, may be calculated. The central question for the court is whether such an approach is just and equitable.
The history of the proceedings
As previously indicated, these proceedings have been hard fought. Regrettably, they have also been protracted, since their commencement, with the filing of the wife’s application in October of 2011.
Originally, the trial was listed for August of 2012, but was not reached by the court, due to the pressure of other business. It was re-fixed for December of 2012, with a two day listing, but this trial was vacated due to counsel advising that the time allocated was inadequate and four days would be required.
Ultimately, the trial proceeded between 11 and 14 June 2013, when the taking of evidence was concluded. However, the time was insufficient to allow the parties to make their closing submissions. 5 July 2013 was put aside for these submissions.
Unfortunately, in the intervening period, counsel for the husband fell seriously ill. Happily he has now regained his health following a period of convalescence. It was only in late November of 2013 that these submissions were completed.
For pragmatic reasons, the parties elected to provide written submissions, with each providing supplementary and answering submissions to the others. It was also agreed that the parties could each file additional affidavits detailing any relevant events, which had arisen since the conclusion of the evidence. This also led to each tendering further bundles of documents, with the apparent acquiescence of the other.
The evidence
a) Documents relied upon
The husband is a prudent and frugal person. Given his disposition, he pays careful attention to his financial affairs and is a diligent and reliable historian in respect of them. In my assessment, he is an intelligent person.
The wife is an [omitted] by profession. Necessarily, she has skills in tabulating figures. In addition, she is adept at the use of spread sheets, which purport to provide a summary of complex and long standing financial arrangements. She too is an intelligent person.
Accordingly, this was not a case in which there was a dearth of financial records. To the contrary, it was a case replete with documents. In addition, due to factors arising from the various delays, which occurred, it also was a case that expanded in complexity, as it unfolded.
Some of the issues arising, particularly after the conclusion of the oral evidence, being related to what payment each had made in respect of the negatively geared property, at [B], following separation and how income generated by the farming partnership, in the most recent financial year, should be treated. In addition, the wife is now seeking the add back of legal fees paid by the husband.
These issues have created a series of competing spread sheets. It was also a case, which was essentially reactive in nature, with the parties each responding to matters raised by the other, in competing affidavits. As such, it was a “story which grew in the telling.”
The wife relies on the following documents:
i)An affidavit of herself filed 19 October 2011;
ii)A further affidavit of herself filed 10 July 2012;
iii)A further affidavit of herself filed 28 November 2012;
iv)A further affidavit of herself filed 13 November 2013;
v)A statement of her financial circumstances filed 19 October 2011;
vi)An affidavit of her mother Ms L filed 28 November 2012;
vii)An affidavit of her general medical practitioner, Dr B filed 28 November 2011; and
viii)An affidavit of Ms T filed 28 November 2012.
Of these witnesses, only the wife and her mother were required for cross-examination. Dr B provided evidence regarding the wife’s health. Ms T is a friend of the wife, whom she met in late 2001, whilst both were studying at the University of [omitted]. She gave evidence regarding her involvement, with the parties, from 2002 onwards.
The husband did not call any witnesses besides himself. He relies on the following affidavits:
i)An affidavit of himself filed 28 November 2011;
ii)An affidavit of himself filed 24 July 2012;
iii)An affidavit of himself filed 1 March 2013;
iv)An affidavit of himself filed 13 November 2013;
v)An affidavit of himself filed 28 November 2013; and
vi)A statement of his financial circumstances filed 24 July 2012.
In addition, during the course of the hearing, a number of documents were tendered into evidence. In the main, these were photographs of the parties, taken at various stages, during their relationship. In addition, the wife tendered correspondence bearing her name, which was addressed to the [T] unit.
Since the evidence concluded and in conjunction with final submissions, each party has provided considerable additional documentary evidence. These include complete bank and credit card statements; tax returns; records relating to payments made by the farming partnership and up-to-date superannuation statements. The documents are compendious.
The parties must bear in mind that this court process is not an audit and I am not an accountant. It is not my function to conduct a reconciliation of each dollar spent by the parties, in the lengthy period of their separation, and attribute those dollars to one or other of them.
In particular, I do not have the expertise to audit spread sheets which the wife asserts represent a tabulation of monies spent by each of the parties, particularly in regards to the [B] property. Nor, merely because the wife is an [omitted] by profession, can I assume her calculations are correct.
b) Credit
Counsel for the husband submitted that his client was the more credible witness and should be preferred to the wife, on all occasions. Mr Nickson was described, by his counsel, as being consistent and credible. On the other hand, counsel for the wife submitted that Ms Zimin’s evidence should be accepted over that of the husband, wherever there was a conflict between the two.
With the greatest of respect to counsel, these are barrister’s platitudes. In my view, assessing the respective levels of credibility of the parties will be a difficult and more nuanced task than simply finding one is to be preferred automatically over the other, in generic terms.
In general, I found both Mr Nickson and Ms Zimin to be pleasant and honest people, who found themselves in an invidious position – namely having to argue about the intricacy of their relationship, over many years, in the artificial, foreign and stressful circumstances of the court room. No doubt, each would have preferred to have been able to resolve the case in a different way.
As such, this was not a case where one party can be found to have engaged in any obvious falsehood or to have clearly and disingenuously manipulated some piece of evidence or issue to achieve an outcome advantageous to him or her on the basis of some level of deception. In my view, both parties genuinely believe the validity of their respective positions, as presented by them in court.
In my view, this is readily understandable. Both parties had much at stake in the case – both in a financial and emotional sense. Both feel aggrieved at how the other has behaved. For obvious reasons, it is often difficult for the parties concerned in matrimonial property proceedings to divorce their feelings from the objective circumstances of the cases in which they are involved.
In this context, issues, which perhaps appeared trivial at the time – a posed photograph; a letter enclosing an insurance renewal; or what was written on a birthday card; to provide just a few examples – have been subjected to rigorous forensic scrutiny, in these proceedings. Regrettably, for reasons upon which I will expand in due course, much of this effort was misplaced. It arose because of the powerful emotions unleashed by the parties’ final separation.
In addition, although proficient in the English language, Ms Zimin’s mother tongue is not English. As such, she does not have an innate understanding of English idiom and more importantly, her cultural context and social mores, acquired from childhood onward, are very different to those of the husband and indeed all the other actors in the court proceedings, other than Ms Zimin’s mother.
I have already indicated that I accept that Ms Zimin felt deeply galled, by the end of the marriage and humiliated at her perception of having been rejected by Mr Nickson. This was particularly difficult, given her previous strong identification with Mr Nickson and the activities, to which he had introduced her, during their relationship, which he enjoyed, such as sport and the rural life.
For his part, Mr Nickson feels aggrieved at what he perceives to be Ms Zimin’s attempted depredation of his life savings, which he acquired prior to having met her. For understandable reasons, he is likely to wish to minimise any potential liability, on his part, to
Ms Zimin. Necessarily, given the parties’ circumstances, this must involve some level of repudiation of their relationship, over many years, which inevitably she will find deeply insulting.
These difficult circumstances are not likely to be conducive to either party being completely objective about the nature of their relationship together, particularly in its nascent stages. In my view, it is inevitable that Ms Zimin and Mr Nickson will have reconstructed past events, either consciously, or more likely unconsciously, to support their current view of what happened between them, in the light of their preferred outcome from these proceedings generally.
In addition, at various times in the past, the parties themselves may have had valid but completely conflicting views about what was the central nature of their relationship. Where one considered the parties to be “dating”, but with a wary sense of avoiding getting too involved, the other may have perceived a total commitment and love for the other person concerned.
The parties agree that the course of their relationship was not always smooth. Ms Zimin concedes that Mr Nickson had commitment issues and the parties separated in mid-2005, although they now vehemently disagree about the context and duration of this separation and its significance in these proceedings.
Each party, through counsel, in their respective final submissions, raised issues relating to the other’s evidence, which was asserted to have tainted the overall credibility of the opposing parties’ evidence.
Having considered these submissions, I hope carefully, I believe I must approach them cautiously. It is always potentially deceiving to base general findings of credit on isolated portions of evidence. After all, individuals may be correct in their perception of one matter but hopeless mistaken about another, whilst being genuine in their belief about both.
However, no matter how difficult it may be, the process of adjudication requires the court to embark upon a course of evaluating the evidence available to it and determining which pieces of it are, on balance, more likely to be reliable than others.
In a case such as this one, which very much turns on the parties’ respective recollections of what they did together, over very many years, this must involve a finding of who of the parties is likely to be the more reliable and objective historian, particularly in a financial context.
In the wife’s case, she asserted that the husband had deceptively held back financial documents, relating to her, which he had retained at the [A] home, following separation. She asserted that he had later picked through these documents, selecting those helpful to his cause, whilst failing to disclose to her solicitors, those likely to be helpful to the wife. From her perspective, it is her submission that this incident must fatally damage Mr Nickson’s credibility, such an objective or reliable a historian, so far as the court is concerned.
This was an issue, which arose during Mr Nickson’s cross-examination. Mr Holland was concerned that he may be precluded from continuing to act, for Mr Nickson, if misleading conduct was established on the part of his client. Ultimately, with Mr Richards’ acquiescence, it led to Mr Nickson being recalled to give evidence in chief, following his conferral with Mr Holland, in respect of the documents in question and to explain his conduct.
The documents in question were described as being a bag of envelopes, addressed to Ms Zimin, from 2001 onwards; together with a post redirection form dating from 2004. The envelopes contained correspondence of a business nature, relating to such things as utilities; bank statements; university arrangements; and mobile phone matters. Mr Nickson deposed that he had not discarded or otherwise destroyed any of the wife’s correspondence. I accept his evidence.
Mr Nickson also deposed that he had unexpectedly found the documents concerned, in February/March of 2013, inside a cupboard located in the sleep-out of the [A] home. The impression I have is that the sleep-out was not much frequented by him and the cupboard itself was somewhat concealed.
Initially, the husband indicated that he had forwarded these documents to the wife’s solicitor, admittedly after having perused them and having selected documents, which he perceived assisted him, shortly after having located them. He later disclosed that this was not the case.
I accept his evidence that he made an honest mistake about the issue. I specifically find that he was not intent in engaging in any deceptive or dishonest conduct. In any event, it is my view, conceded by counsel for the wife, that the documents in question added little, if anything, to the respective cases of the parties. Certainly, Mr Richards and Ms Zimin have now been able to examine the documents in question.
Counsel for the husband is critical of Ms Zimin for initially claiming that she would be required to repay considerable sums, relating to her education, to her parents. As previously indicated, she abandoned this aspect claim during the hearing. Mr Holland characterised this portion of her case as being a “try on”. The implication being that this attitude permeated the remainder of her case.
In causal terms, it is difficult to see a connection between the failure of the wife’s marriage and the crystallisation of a debt to her parents. After all, the wife’s decision, supported by her parents, to study in Australia and the moral obligations arising from it, arose independently of any relationship between the parties.
However, the failure of the marriage was a devastating and humiliating event for Ms Zimin. As such, it caused her to feel a deep sense of insecurity, which she attributed to Mr Nickson and for which she held him responsible.
In these circumstances, it is readily understandable, at an emotional level, why she would consider it appropriate that Mr Nickson should be compelled to make recompense to her. At a visceral level, she believes Mr Nickson has blighted her life.
In my view, these powerful feelings must have implications for the overall level of her objectivity, regarding the parties’ circumstances, including, in a fundamental sense, their financial history together.
I accept that Ms Zimin did strongly identify with Mr Nickson’s farming activities, including those conducted on the [M] land. However, her background is completely different to that of Mr Nickson, who grew up farming in the rural areas to the north of Adelaide.
In this context, the wife’s claims of being integrally involved, in the practical operation of the farming enterprise, appear exaggerated. On any objective view, she simply does not have the knowledge to have been so involved.
In this case, the marital relationship between the parties was brief. As a result of a mutual aspiration, during their marriage, the parties pursued a rural lifestyle. Without the husband’s ownership of the [T] unit, it would not have been possible for the [A] land to have been purchased, debt free.
On any view, the husband’s direct financial contributions, made at the outset of the parties’ relationship, still represent the far larger portion of the parties’ accumulated assets, as presently calculated. They are the bedrock on which the parties’ current wealth is based. As previously indicated, these assets were acquired independently of any contribution from the wife, direct or indirect. These contributions must be given special recognition in the court’s deliberations.
From the time the parties moved to [A], there can be no doubting that they pooled their wages, which were broadly similar in quantum, and utilised them for joint purposes. They had shared aims and wanted to get ahead financially. Their respective financial contributions must be assessed as being equal to all intents and purposes, during the period of their marital relationship.
The manner in which the parties allocated their funds was idiosyncratic, but not sinister. He husband allocated the funds required to pay the mortgage on [G], as his first priority. Other expenses were shared. As previously indicated, the end consequence of this arrangement was that savings accumulated in the wife’s bank account. This occurred with the husband’s acquiescence.
With the benefit of hindsight, the purchase of the [B] property was, perhaps, not a shrewd financial move. Although the property is registered in the wife’s name and she alone has had the taxation benefits accruing from its negative gearing, the husband has not shirked his responsibilities for the property. He has continued to contribute to the debt secured against the property and the debt relating to it, secured against [A].
Although the sum of $28,000.00 has not been added back into the parties’ pool of assets, on the basis that the sum has been spent, largely in respect of Ms Zimin’s re-establishment expenses, I accept that the husband has provided some financial support for the wife in the post separation period.
This period of post separation is some years in duration and during it, the parties have largely led independent financial lives. During the period, the husband has continued to operate the farming business, at both [A] and [M], and has retained both the profits and the taxation benefits of any losses.
Given that I have found that he was the force behind the business both, during and after the parties’ relationship, I do not believe that any significant allowance should be made, in the wife’s favour, by virtue of the husband’s larger income, in the post separation period, as a consequence of the farming enterprise.
I accept that the wife’s parents contributed a significant amount of money to fund the parties’ second wedding in China. I also accept that it was important for them to do so. However, this action, on their part, has not added to the parties’ joint wealth. As such, it cannot be regarded as a significant issue in these proceedings.
Section 79(4)(b) – other non-financial contributions
The section speaks of non-financial contributions made directly or indirectly …to acquisition, conservation or improvement of any property. I accept that the husband was constantly at work, in a variety of ways, on and around the [M] and [A] properties, to make sure they remained productive. For him, given his rural origins, I suspect that these activities were labours of love.
However, in the context of this case, they must be regarded as being significant contributions, which, at the least, ensured the maintenance of the two properties concerned. Due to the husband’s expertise, other sources of labour did not have to be co-opted, at the parties’ expense.
I also accept that the husband was the guiding genius behind the two farms, deciding what to plant and over-seeing the involvement of share farmers and other contractors from time to time. He had this expertise, the wife did not.
The wife contends that she too was involvement in the farming enterprise, both at [M] and [A] and this involvement was of assistance to the husband and added to the parties’ greater good, in material terms. I accept that Ms Zimin was interested in these matters and supported Mr Nickson in his various agricultural activities.
I also accept that she helped around the properties, as well as providing Mr Nickson with moral support and encouragement, both before and after mid-2006. However, given her lack of expertise, her capacity to provide useful assistance was limited.
I accept she completed the taxation returns for the farming partnership. This was of assistance to Mr Nickson. It also assisted her, as losses generated by it, were distributed to her reducing her taxable income.
Mr Nickson cannot be regarded as a financial naïf. He has tertiary qualifications in [omitted] and has had a career in [omitted]. In this sense, I do not accept that he was dependent on Ms Zimin for financial advice, during the currency of their marriage. Accordingly, in my assessment, indirect contributions favour the husband to a marked degree.
Section 79(4)(c) – contributions to the welfare of the family
One of the essential tasks for the court, arising under section 79(4) of the Family Law Act 1975 is to weigh and assess contributions, which are essentially different in nature and, as such, are not always amenable to ready comparison. In this context, I must be careful not to undervalue the homemaker role, which does not always provide a clear economic output, such as that generated by a wage earner.[58]
[58] See Ferraro & Ferraro (1992) 16 FamLR 1 at 38 and Mallett & Mallett (1984) 156 CLR 605
Ms Zimin contends that, during the parties’ relationship, she performed the vast preponderance of domestic duties. Such assertions are frequently made, in proceedings such as these. They are invariably difficult to verify, in the absence of independent or corroborating sources of evidence. There is no such evidence available in this case.
I must be careful not to fall into stereotypical error and assume that women invariably have higher standards in regards to domestic life and therefore necessarily do more around the home. But at the same, experience does indicate and social science studies do show this to be the case, more often than not, and that such work, by virtue of its nature, has a tendency to be under rather than over-valued, in these types of proceeding, to the detriment of women, in the main.
In this case, neither party characterises the other as a domestic slob. On balance, it seems to me to be more likely than not that both parties contributed, in an active way, to the well-being of their small family group.
Theirs was not a long marriage, nor was it one which produced children. During it, the main focus of both Mr Nickson and
Ms Zimin was on activities outside of the home, principally the pursuit of career. I accept that the husband contributed in his likely sphere of influence, in their shared domestic setting, and the wife contributed fully in her preferred fields, which both added to their mutual comfort.
The section speaks of the welfare of the family. As is clear, from the section, a couple can constitute a family for its purposes. Ms Zimin would contend that she and Mr Nickson were such a family from a date soon after they had met and begun to socialise together.
I accept that the wife did provide emotional support for Mr Nickson, in this period which, in a generic sense, added to his welfare or well-being. So indeed, did he for Ms Zimin. The parties enjoyed being together. In my view, this benefit is close to intangible, within the context of section 79(4)(c).
In all these circumstances, I do not consider that significant emphasis needs to be placed on this area of contribution. It will however have some weight in the proceedings, particularly when I make the leap from words to figures. Given the length of the marriage in question, I do not believe, in so doing, that I am unwittingly undervaluing the wife’s non-economic contributions.
Conclusions on contributions
Given the length of the marriage and the need to give significant recognition to the items of property which the husband brought into it, bearing in mind these items were the product of economic activities which occurred independently of the wife, it is difficult to attribute a percentage figure on the parties’ respective contributions and so their entitlements to that property.
In Kane & Kane[59] Faulkes DCJ said as follows:
“Nothing in s 79 requires a Trial Judge (or for that matter the parties) to allocate a percentage entitlement of the property to each party in applying the criteria and requirements of s 79. (And because of s 79(4)(e) s 75(2)). The articulation of such percentages is a practical tool whereby the parties and ultimately the Trial Judge indicate the weight and evaluation given to any contribution (or contributions in combination) or to any factor under s 75(2) (or all factors in combination). While the allocation of percentages is a sensible and valuable tool, (particularly to promote consistency and predictability) it cannot be an objective in its self. Section 79 imposes no obligation on a Court to divide property or interests in property in accordance with some determined percentage.
That having been said the evaluation and comparison of contributions (and also factors pursuant to s 75(2)) is necessarily a difficult task because contributions of one sort, in one “sphere” of contribution, may be significantly different in kind from contributions in another.”
[59]See Kane & Kane [2013] FamCAFC 205
His honour also approved the following passage of Coleman J from Steinbrenner & Steinbrenner, [60] whilst remarking no answers were provided in it to the dilemma created by the need to leap from words to figures in a property case:
“Given the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case…”
[60] See Steinbrenner & Steinbrenner [2008] Fam CAFC 193 at [234]
One of the consequences of a long marriage, with a significant focus on family and the raising of children, is that, over time, disparate contributions have a tendency to even out, with the result that considerations of justice and fairness lead easily to the conclusion that a percentage assessment of contribution of 50/50 should be made. In these types of cases, such an assessment does not have an air of artificiality or artifice about it.
That is not the case in this matter. In my view, there is a significant level of artificiality necessarily arising, in this case, if the court moves too blithely to an assessment of percentages, given the innate complexities of the matter, particularly the circumstance arising from the fact that the parties have been emotionally involved with one another for a period close to a decade.
The [M] land ($262,500.00) represents approximately 36% of the net property pool; the equity in the [A] land ($375,000.00) a further approximately 28%. Both these properties are clearly referrable to prior contributions emanating from the husband.
However, in the case of the [A] land, the equity has been reduced by virtue of its encumbrance by the mortgage, which enabled the purchase of the [B] property. In addition, I accept that the wife has made both direct and indirect contributions to the [A] property during the period of the parties’ marriage.
The parties’ actual equity in [G] and [B] is slight and in combination, these properties represent about 26.5% of the parties’ net equity. The wife has, in my assessment made indirect financial contributions towards the [G] property, during the period of the parties’ marriage.
However, as a consequence of the parties’ separation, it must be the case that the husband’s contributions towards this property, in financial terms, are greater than those of the wife, in total.
In terms of [B], both before and after separation, both parties have made significant direct financial contributions towards the acquisition and maintenance of this property. However the wife has derived the greater benefits as a consequence of its negative gearing.
The parties’ non real assets represent a further 9% or so of the asset pool. Again, some of these items are directly referable to contributions which predate the parties meeting, in particular the plant and farming equipment referable to [M].
The danger in approaching the matter in this way is that it risks reducing an exercise in equity to one of mere accounting or arithmetic. On the one hand, I must give special recognition to the husband’s obviously important financial contributions made at the outset of the parties’ relationship.
On the other hand, I must recognise that the task I must undertake is one to be informed fundamentally by considerations of equity and fairness, in the context of relationship between the two parties concerned, which though not of many years in duration, in terms of its financial noteworthiness, was still a significant step for them both and one to which both were committed, following a period of long standing intimacy between them.
In this context, I must be careful not to unwittingly under-estimate or dismiss the wife’s contributions, which have not necessarily added to the parties’ store of total wealth in dollar terms, but which remain significant within the context of the marriage between the parties. However, it would be unfair to Mr Nickson to unduly discount his significant financial contributions, which dwarf those of the wife.
Accordingly, at the end of the exercise arising pursuant to sections 79(4) (a) – (c) of the Act, and having synthesised the various factors, which go one way and the other, but mostly in Mr Nickson’s favour, I assess the parties’ various and disparate contributions arising, during their marriage, as favouring the husband by a degree of 80%/20%.
In reaching this assessment, I have given some regard to what I have characterised as the slight or close to intangible contributions made by the wife in the early years of the parties’ relationship, when they were dating to use the husband’s terminology. In this period, the wife made contributions which benefitted the husband but only to an extremely modest degree.
Conclusions on contributions to superannuation
I acknowledge that there is some degree of artificiality, in approaching the issue of superannuation in purely arithmetical terms, for a number of reasons. Firstly, Mr Nickson’s superannuation will have accumulated faster, during the period of the parties’ relationship, because of his superior financial position at the relationship’s commencement. Secondly, both parties have accumulated superannuation after their separation.
In total, the parties’ entitlements to superannuation amount to $322,751.00. Of this sum, around 16% is attributable to the efforts of the wife alone; around 38%, in the form of the [A] and [H] superannuation, is attributable to the sole efforts of the husband, prior to the relevant period of the relationship.
The husband added just under a $100,000.00 to his superannuation holdings, during the period of the parties’ relationship, which represents around about 30% of the current holdings. This increase was a product of his contributions to the [S] fund and the consequences of interest and capital growth on his other holdings, reflecting his superior superannuation position at the commencement of the parties’ relationship. Some of his [S] superannuation was also acquired prior to mid-2006.
In my view, any indirect contribution to this growth in funds, by the wife, must be regarded as largely tangential, but she has some connection to them, as the underpinning of the parties’ marital relationship was that they would join their financial fortunes together with a view to providing long term support for each other, including in retirement. The remainder has been added in the period in the period since separation, as has a portion of the wife’s current holdings.
In general terms, 46% is referrable to the period of the parties’ relationship, when each party supported the other to go out into the workforce and provided emotional succour and other forms of support. Bearing in mind all these factors, I have come to the conclusion that it is appropriate to divide the parties’ total superannuation holdings in the same proportion as their other assets at the end of the contribution assessment phase.
Section 79(4)(d) – effect of any proposed order on the earning capacity of either party
The husband wishes to retain both the [A] and [M] properties and the plant associated with them, in order to enable him to continue farming. The wife does not explicitly seek the sale of either party. Accordingly, it seems unlikely that any potential order will effect
Mr Nickson’s capacity to earn income as a farmer.
Section 75(2) – the prospective needs of the parties
I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of either party. The section 75(2) factors are mainly, but not only, prospective in nature. Specifically, they are as follows:
(a) the age and state of health of each of the parties;
(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;
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(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;
(e) the responsibilities of either party to support any other person;
(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;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(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;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any other fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
I will address the section 75(2) factors as relevant.
Paragraph (a) – the husband is in his late forties. He enjoys robust good health. Accordingly he is likely to have many years in the paid workforce before him. The wife is fifteen years younger. She has some issues relating to her health, but no evidence has been provided that these issues have impacted upon her ability to pursue employment in accountancy.
I accept however that she is considered a more risky proposition for life and income protection insurance than the mean of the Australian population. However, this of itself, does not enable me conclude that her working life is likely to be cut short by ill health. Accordingly, it seems probable that the wife will be able to provide for herself for the foreseeable future and to make provision for her retirement.
Paragraph (b) – both parties have tertiary qualifications in [omitted] and [omitted] respectively. The wife commenced studies to obtain a higher degree but has deferred her studies. She has been able to obtain employment in a number of [workplaces] and in other spheres of endeavour both before and after the parties separated.
The husband chooses to pursue employment as a [omitted], which at first blush seems unrelated to the subject matter of his tertiary qualifications. He earns a comparable wage to that of the wife. No evidence has been provided to me regarding the retirement age of [occupation omitted] or whether Mr Nickson plans to utilise his degree in some formal way in future.
It is however clear that Mr Nickson’s current employment is secure and suits him and his lifestyle. The wife’s recent career path has not been without it vicissitudes of late. She has been made redundant and has had to pursue forms of employment not palatable to her. She put aside her [qualification omitted] plans.
I accept that she cannot be regarded as a highly experienced [omitted] but nor is she a complete neophyte. Ms Zimin, although she speaks English very well, is not a native English speaker. In a contracting labour market, she may experience difficulties with employment, although this has not happened to date. Her best assets are likely to be her obvious work ethic and desire to get ahead, both of which I assess her to have.
It has been said by the Full Court that the most valuable “asset” a party can take out of a marriage is “a substantial, reliable income-earning capacity”.[61] It seems to me that both parties are likely to have such an asset and to be able to support themselves financially for the foreseeable future through the receipt of income from employment.
[61] See Clauson & Clauson (1995) FLC 92-595 at 81,911
In addition, Mr Nickson has the benefit of income derived from his farming. This is likely to mean, over time, balancing the good years with the bad, he will earn more income than will Ms Zimin. On balance, although older, Mr Nickson seems to be in a more secure income earning situation than Ms Zimin.
He also has significantly better asset backing than she does, by dint of his earlier entry to the workforce and his prudent investment of funds. In my view the factors arising under this criterion favour the wife to a slight degree.
Paragraphs (c) – there are no children of the marriage under the age of eighteen years.
Paragraph (d) – neither party currently has a legal obligation to support any other person. In addition, neither party seems to have any exceptional commitments in respect of personal support.
Paragraph (e) – this is not a relevant consideration in the present case.
Paragraphs (f) – the parties each have accumulated interests in their respective superannuation funds. The husband joined [A] soon after leaving school. He is now in his late forties and has been in the paid workforce for the larger proportion of his life. He is a careful and prudent person, particularly with money. As such he has made regular provision for his retirement and has a significant sum put by in this regard.
The wife is significantly younger. She has also been in the paid workforce, in this country, for a comparatively short period of time. Necessarily her preparations for retirement are not as well advanced as those of the husband, but she has many years before her to rectify this situation. In my assessment, the considerations arising under this criterion favour the wife to a slight degree.
Paragraph (g) – One inevitable consequence of the end of the majority of marriages, is a drop in the standard of living of one or sometimes both the parties concerned. It is trite, but true nonetheless, that two households cannot usually live as comfortably as one. What is important, in respect of this paragraph, is that any drop in living standards should not be borne disproportionately by one party.
There is no evidence available to me to indicate that one of the parties is doing it significantly tougher than the other at present. In particular, the wife had access to marital funds to re-establish herself in rented accommodation in Adelaide following the end of the parties’ marriage.
Paragraphs (h), (ha), (j), (k), (l), (m), (n), (naa), (na), (p) & (q) – These paragraphs are not relevant to the present case.
Paragraph (o) – in Ferguson & Ferguson[62] the Full Court of the Family Court held that section 75(2)(o) was to be read ejusdem generis with the other matters listed in the section 75(2) which enabled the court to bring into account “conduct which has an economic significance in the parties’ dealing with each other or the property in dispute.”
[62] See Ferguson & Ferguson (1978) FLC 90-500 at 77,607
The parties in this case have been separated for a significant period of time. As such, it was necessary for each of them to move on, in financial terms, from the relationship with one another. It was neither possible nor reasonable for them to keep their financial affairs in some form of stasis indefinitely.
This was the background to the husband continuing to operate the farming partnership independently of the wife and determining how any profits generated by it should be allocated. It was also the period in which the wife utilised joint marital funds to re-establish herself. I take these matters into account at this stage.
After consideration of the totality of the evidence, I do not think that any of these matters greatly favour one party over the other.
Conclusions on section 75(2) factors
After considering the various factors arising under section 75(2) I have come to the conclusion that a modest adjustment, in favour of the wife, is warranted, chiefly as a consequence of the current imbalance in the parties’ superannuation holding and the husband’s more advantageous position as a consequence of the financial resource represented by the farming enterprise.
I propose a further 3% adjustment, being made in the wife’s favour, in respect of both the non-superannuation assets and superannuation in recognition of the competing factors arising under section 75(2).
Section 79(4) (f) & (g)
These provisions are not relevant to the court’s determination in this matter.
Conclusion and Form of Orders
I have determined that both the parties’ superannuation and non-superannuation assets should be divided 77/23 %, in the husband’s favour. Primarily this division recognises the shortness of the marriage; the very significant initial financial contributions made by the husband; and the equality of their contributions during their marriage.
Twenty three per cent of the parties’ pool of net non-superannuation assets is represented by the sum of $165,968.00. If the value of the wife’s motor vehicle ($23,800.00) is deducted, it leaves a sum of $142,168.00 to which she remains entitled.
In my view, it is appropriate that the wife retain the [B] property, which is registered in her sole name. She was the guiding force behind the acquisition of the property in the first place and she has received the taxation benefits relating to its tenancy.
Putting to one side the monies relating to its purchase, secured against the [A] land, the equity in the [B] property totals somewhere in the vicinity of $122,000.00. This equity represents a foothold, for Ms Zimin, in the property market.
She can elect either to continue to rent it out, in the hope it will appreciate in value or live in it herself. Either way, in my assessment, it represents a valuable asset for her and a base on which she can build her future financial security.
I propose that Mr Nickson pay her a further sum of $20,000.00 to finalise the outcome, which I envisage. This will provide Ms Zimin with a modest cash buffer to protect her from future exigencies, although I anticipate that there is a significant possibility the sum will be utilised in the payment of legal fees. In any event, in my assessment such an outcome will provide some form of financial security for Ms Zimin, on which she can build in the future.
I anticipate Mr Nickson will be able to raise the sum of $20,000.00 without undue difficulty. I appreciate that this outcome will leave him with a significant mortgage remaining secure against the [A] land, which may delay his long standing plans to build on it. However, given his other assets, particularly the [M] land, in my view, such a level of indebtedness is manageable by him.
As a corollary of this arrangement, it will be necessary for Ms Zimin to transfer her interest in the [A] land to Mr Nickson and for him to indemnify her in respect of the mortgage, in favour of Members Equity secured against it. I will confirm Mr Nickson’s proprietary interests in the [M] land and the other items of property currently in his possession.
From his perspective, the chief benefit of the outcome, which I envisage, is that the farming land and the equipment relating to it remain in his control and he will be free to pursue the lifestyle of his preference, particularly the income earning aspects of it.
The farming partnership between the parties will be severed but it will not be necessary for Mr Nickson to account, in any financial sense, for what has happened in the partnership in the period since the parties separated.
The parties’ total superannuation is represented by a sum of $322,751.00. Twenty three per cent of this figure is $74,232.73. The wife has superannuation, standing in her name to the value of $50,831.00. The difference is $23,401.73. I will round this sum down to $23,000.00.
I will order that the husband nominate which of his particular superannuation fund from which he wishes there to be a splitting order in this sum made in favour of the wife and will make orders consequential to this nomination.
The outcome leaves the wife with a modest level of superannuation, but she has many years in the workforce before her in which she will be able to add to her savings for retirement. The husband leaves the marriage in a broadly similar position to that which he had on separation. He too has a period approaching twenty years to add to his superannuation and to put behind him the financial implications of the parties’ martial failure.
In my view, the orders which I propose represent a just and equitable outcome of the parties’ competing applications. The major yardstick against which the parties’ respective contributions have been assessed is one which is broadly assessed to have commenced from mid-2006 but it has not occurred in a vacuum.
It has been informed, to some modest extent, by what occurred between the parties prior to that date, which was emotionally significant for each of them, but was before a large scale combination of the financial aspect of their lives together.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding five hundred and forty-five (545) paragraphs are a true copy of the reasons for judgment of Judge Brown
Associate:
Date: 26 February 2014
[13] Watson & Ling [2013] FamCA 57 at [13]
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