HOME【Classic Cases】BerXXley & YXXe [2017] FCCA 1XX5
ORDERS
(1) Within 3 months the Husband shall pay to the wife the sum of $18,625 (“the sum”).
(2) Simultaneously with the payment of the sum by the husband to the wife:
(a) the wife shall forthwith do all acts and things necessary and sign all documents necessary to transfer to the husband all her right, title and interest in the property known as and located at Property S, with the Folio identifier (omitted) (“Property S property”),
(b) the husband shall do all acts and things and sign all documents necessary so as to discharge the mortgage secured over the Property S Property and re-finance the mortgage into his sole name and thereafter the husband shall indemnify and keep indemnified the wife in relation to the mortgage and outgoings associated with the Property S property,
(c) the husband shall forthwith do all acts and things necessary and sign all documents necessary to transfer to the wife all his right, title and interest in the property known as and located at Property B with the Folio identifier (omitted) (“Property B property”),
(d) the Wife shall do all acts and things and sign all documents necessary so as to discharge the mortgage secured over the Property B and re-finance the mortgage into her sole name and thereafter the Wife shall indemnify and keep indemnified the Husband in relation to the mortgage and outgoings associated with the Property B property.
(3) Should the husband fail to pay the sum to the wife within the stated period referred to in order (1) above, then, within 1 further month, the wife shall pay the husband the sum of $118,278, and simultaneously:
(a) The Husband shall forthwith do all acts and things necessary and sign all documents necessary to transfer to the Wife all his right, title and interest in the Property B property,
(b) The Wife shall do all acts and things and sign all documents necessary so as to discharge the mortgage secured over the Property B and re-finance the mortgage into her sole name and thereafter the Wife shall indemnify and keep indemnified the Husband in relation to the mortgage and outgoings associated with the Property B property,
(c) The Husband shall forthwith do all acts and things necessary and sign all documents necessary to cause the Husband to transfer to the Wife his right, title and interest in the Property S property,
(d) The Wife shall do all acts and things and sign all documents necessary so as to discharge the mortgage secured over the Property S property and re-finance the mortgage into her sole name and thereafter the Wife shall indemnify and keep indemnified the Husband in relation to the mortgage and outgoings associated with the Property S property,
(4) That except as otherwise provided for by these orders:
(i) The Husband shall indemnify the Wife from and in respect of all liabilities, actions, claims, suits and demands as may be made against the Wife in relation to all liabilities in the name of the Husband; and
(ii) The Wife shall indemnify the Husband from and in respect of all liabilities, actions, claims, suits and demands as may be made against the Husband in relation to all liabilities of the Wife.
(5) That except as otherwise provided for by these Orders, each of the Husband and the Wife shall otherwise retain and shall be the sole legal and beneficial owner (as against the other) of:
(i) Any motor vehicle otherwise in their possession and registered in their sole names;
(ii) All items of furniture and contents in their possession;
(iii) All items of personalty, chattels, and collectibles in their possession;
(iv) All funds held by them whether in cash or on deposit with any bank, building society, credit union or other financial institution in their sole names;
(v) All shares and managed funds interests in their sole names; and
(vi) All contributions to or benefits or entitlements arising from membership of any policy of insurance or superannuation.
(6) Property B to the parties to relist the proceedings on seven days’ notice in relation to any difficulty in implementing the above orders.
IT IS NOTED that publication of this judgment under the pseudonym BerXXley & YXXe is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA
PAC 2XX6 of 2015
MR BERXXLEY
Applicant
And
MS YXXE
Respondent
REASONS FOR JUDGMENT
Introduction
This was the Final Hearing of property proceedings between the de facto husband (hereafter “the husband”) born (omitted) 1982, now aged 35 years, and the de facto wife (hereafter “the wife”) born (omitted) 1983, now aged 33 years.
The husband was not represented by counsel at the final hearing. He initially appeared represented by Ms A KhXXil, solicitor. However at 2:30 PM, on the first day of the final hearing, Mr El-HaXXnia, solicitor and principal of Saba El-HaXXnia lawyers replaced Ms A KhXXil as solicitor advocate.
Both parties are (occupations omitted). They met each other when they were studying in (omitted) Sydney.
It was common ground between the parties that their relationship constituted a de facto relationship to which the Family Law Act 1975 (the Act). It is common ground that the jurisdictional bases as to a “ de facto relationship” in this matter are present in terms of the length of the relationship and the geographical requirement.
Their de facto relationship commenced in about March 2009, and, as discussed later in these Reasons, it came to an end in about March 2014. The evidence indicates the parties did not cohabit for any significant period but had a sexual relationship. There was no child of the relationship.
Both parties worked as (occupations omitted) during the relationship.
The evidence could have been produced in a more logical and cogent manner by both parties. For example, the parties’ individual and joint bank account statements tendered in evidence were incomplete in that they did not span the entire period of the relationship. Further, cross examination by both parties in relation to numerous contested issues was often sparse, leaving the court to resolve such issues without such assistance.
Parties’ Proposals
The husband sought orders as set out in his amended case outline, Exhibit C. He sought orders, inter alia, that he be declared the sole legal owner, and have exclusive occupation of the property situated at Property S (the Property S property); that the wife be declared the sole legal owner, and have exclusive occupation of the property situated at Property B (the Property B property). He sought orders that each party would retain the debt associated with the property that they would own.
In closing submissions, the husband contended that a finding should be made that his contributions, together with a s90SF(3) adjustment in his favour, should be assessed at 65% to the wife, 35% to the husband.
The wife sought orders as set out in her case outline, Exhibit A. She sought orders, inter alia, that the husband transfer to her his interest in the Property S property and the Property B property, with the wife to discharge the mortgage secured over those properties, and then refinance the mortgages into her sole name, and that the wife pay to the husband $60,000.
In closing submissions, the wife contended that a finding should be made that her contributions should be assessed at 85% to the wife, 15% to the husband, with no adjustment under s90SF(3).
Both parties did not seek to include their respective superannuation entitlements in the property division and merely sought orders that each party retain for their own benefit their respective superannuation entitlement.
As referred to later in these Reasons, the court ultimately found the net property pool of the parties, relating to non-superannuation assets, to be $394,263.
Material Relied Upon
The husband relied upon the following documents:
Affidavit of the husband filed 2 September 2016, which affidavit exhibited exhibits B-1 (husband’s bank statements from his (omitted) bank account (omitted)) and B-2 (parties’ bank statements from (omitted) bank account (omitted) for the period May 2011 to 31 October 2013);
Financial Statement of the husband filed 2 September 2016.
The wife relied upon the following documents:
Affidavit of the wife filed 15 August 2016, which exhibited:
exhibit Y-1 (the parties bank statements from (omitted) Bank account (omitted) from 1 April 2015 to 30 June 2016);
exhibit Y-2 being:
the wife’s bank statements from her (omitted) Bank account (omitted) from 27 July 2011 to 24 July 2015;
the parties’ bank statements from joint (omitted) Bank account (omitted) from 24 June 2011 to 18 July 2014;
bank statements from (omitted) account (omitted) from 25 December 2010 to 26 February 2014 (then a joint account), and bank statements from 27 February 2014 to 26 June 2015, when the account was in the name of the wife;
exhibit Y-3 being:
joint investment loan account with (omitted) Bank Account (omitted) from 7 November 2013 to 10 July 2016
joint offset account with (omitted) Bank account (omitted) from 18 October 2013 to 18 January 2016
sub account in the wife’s name with (omitted) Bank account (omitted) from 7 August 2014 to 14 July 2015
b) Financial Statement of the wife filed 15 August 2016
There were certain documents tendered in evidence; Exhibits A to G.
Both parties were cross-examined.
Evidence
The parties were in dispute as to the date of separation. The husband’s affidavit evidence was that the parties separated in late February or early March 2014. The wife’s affidavit evidence was that they separated in around June 2012 (however there was a lack of clarity from the wife as to why she contended such date of separation). However the wife also stated, in her affidavit, in relation to a sum of $25,000 she advanced to the husband for his purchase of a property at Property M in January 2013, that, “I would not have agreed to loan him the money if we were not in a relationship”; the court does not accept the wife’s oral evidence seeking to explain this latter statement.
The court finds that the parties separated in about March 2014; accordingly the parties’ relationship was for some 5 years, having commenced their relationship in March 2009.
After the wife’s graduation in (omitted) at the end of 2008, during the relationship, and to August 2016, she was employed as a (occupation omitted) and her employment income ranged from about $73,000 to about $93,000 gross per annum.
The husband, from 2009 to 2014, was earning at least $3,000 gross per week, or $156,000 gross per annum. He was working at least 83 hours per week during this period.
Since January 2013, the husband paid on average paid about $517 per week for his mother’s medical expenses, and in total, he estimates that he has paid at least $107,000 for such expenses.
The husband, at the commencement of the relationship, had modest savings and a car.
At the commencement of the relationship, the wife had modest savings. She also purchased a car in about 2009 for $32,000. The husband had given the wife the sum of $1,250 towards the deposit for the purchase of this car.
The husband paid for certain living expenses on behalf of the wife which payments assisted the wife, to a not insignificant extent, in saving funds, through her employment income, to make contributions towards the purchase and outgoings of the jointly owned properties.
For example, during the relationship the husband assisted the wife with rental payments for a granny flat in (omitted), some car related expenses, and shopping expenses.
Further, from shortly after the commencement of the relationship, the husband occasionally gave the wife money in relation to the wife’s financial assistance provided to her mother.
Further, the husband, during the relationship, often paid for the parties’ restaurant meals (including Chinese restaurant meals which occurred at least once a fortnight during the relationship), hotel accommodation which occurred often, social activities, shopping trips during which the husband would purchase items for the wife (such as shoes, bags, and clothes), and a Queensland trip in March 2010 which cost the husband about $20,000.
The court is unable to precisely quantify such payments made by the husband for the wife on the evidence before it.
The husband alleged that he made payments to the wife from April 2009 to January 2014 in the total sum of $56,800, referred to in paragraph 49 of his affidavit. The husband alleged that the payments were revealed in bank statements of his (omitted) bank account. The wife denied this allegation.
The Court is not satisfied that the husband has reliably proven that he paid the various asserted sums totalling $56,800 to the wife during the alleged period. Following cross-examination, it became apparent that the husband had printed out the (omitted) bank statements in November 2014 and then highlighted which transactions he asserted related to cash payments were made to the wife during the period from April 2009 to January 2014. The husband conceded that he did not have a clear recollection of the transactions referred to in the bank statements. Further, he sought to vary his affidavit evidence in this context by stating, in cross examinations, that the alleged payments to the wife from his bank account comprised not only cash withdrawals for the wife’s benefit but also transactions made by him on the wife’s behalf.
However, despite the husband’s inability to prove that he paid the various asserted sums totalling $56,800 to the wife during the alleged period, as discussed previously in these Reasons, the court is satisfied that the husband, throughout the relationship, paid for various expenses on behalf of the wife, as discussed above, although, again, the court is unable to precisely quantify such payments.
Property B property
In May 2011 the parties exchanged contracts for the Property B property in the sum of $457,500. The wife personally paid the deposit of $45,750 from her (omitted) savings account. In May 2011 she also paid about $636 for the legal fees of the purchase of that property.
In June 2011 the Property B property settled and the parties took out a mortgage of $417,640 with the (omitted) Bank (joint home loan account number (omitted)). The parties also established an offset account with the (omitted) Bank in respect to the mortgage with it.
At this time the parties received a first home buyer grant and from this grant they paid the sum of about $7,005 for the solicitor’s fees and disbursements in respect to the purchase of the Property B property.
Soon after the settlement, the parties leased the Property B property for $480 per week. They each contributed about $300 per month for the outgoings on this property, including mortgage repayments, to cover the shortfall from the rental income.
In about May 2012 the parties renovated the Property B property and they contributed approximately equally to the renovation costs of $6,000.
In about July 2012, the wife moved into the Property B property and she has been residing there since that time. The husband continued to rent premises paying $490 per week and moved into the Property S property in July 2016. After the wife moved into the Property B property, and up until about February 2015, she made financial contributions towards the outgoings on that property, including mortgage repayments, substantially in excess of the husband’s financial contributions, and after about February 2015, she solely met such outgoings, however the court takes into account that the wife had the benefit of sole residence in that property from July 2012 to date.
Property S property
In about August 2011, the parties purchased the Property S property “off the plan” for $575,000.
In August 2011 and January 2012, the wife contributed a total of $30,000 towards the deposit of the Property S property. The husband contributed about $25,000 towards this deposit.
In November 2013, the wife paid about $10,117 for the legal fees and stamp duty of the purchase of the Property S property.
In November 2013, the purchase of the Property S property settled, and the parties took out another mortgage of $489,057 with the (omitted) Bank. From about settlement date, the parties leased the Property S property. The monthly mortgage repayment was about $2,664. The rental income from the Property S property was about $2,100 per month. That rental income was supplemented by money that each party was contributing, similar to what they were doing with the Property B property.
In about late May 2014 the tenant at the Property S property vacated the unit. Between that time and February 2015, the parties’ contributions to the outgoings on the Property S property, including mortgage repayments, were approximately equal.
After February 2015 and up until July 2016, the wife was solely responsible for outgoings, including mortgage repayments, on the Property S property. There were consent orders on 20 June 2016 that the husband would return to live in the property at Property S on the basis that he met the outgoings on the property from July 2016. The wife made the August 2016 repayment to the bank in respect of the property.
At trial, an issue arose as to occupancy of the Property S property after the tenant vacated it in late May 2014. The husband had contended that he had unsuccessfully sought permission from the wife to take up occupation. The wife disputed this contention.
The wife contacted the real estate agent on 8 July 2014 and was informed that the keys to the Property S property were returned to the husband and the agent was no longer instructed to rent out the property. Since the agent had returned the keys of the Property S property to the husband, the wife had no access to the property, and could not rent it out.
The wife filed an Application in a Case on 13 April 2016 because she was struggling to repay the mortgage for both properties. Despite her previous requests for the husband’s consent to rent out the Property S property, or for him to resume his contribution to the mortgage repayment (see Exhibit E), the husband did not respond to her application until the return date on 20 June 2016 when consent orders were made.
Exhibit G was the husband’s Response to the wife’s Application in a Case filed 13 April 2016 in which she sought orders relating to the renting out of the Property S property. The Response sought an initial order that the husband have occupation of the Property B property (in the alternate he sought occupation of the Property S property) which, as submitted by the wife, is somewhat inconsistent with the husband’s contention that he had previously sought permission from the wife to occupy the Property S property which she would not accept. The court does not accept the husband’s contention, as referred to above.
Husband’s purchase and later sale of Property M property
The wife advanced $25,000 to the husband in about January 2013 to assist the husband in the purchase of a property at Property M for $249,000. The husband had borrowed about $224,000 to assist in its purchase. In January 2014 the husband sold this property for $308,000. After all expenses, the husband made a net profit of about $6,073 no part of which was paid to the wife.
Husband’s alleged payment of work bonuses to wife
The husband alleged that $69,500 worth of work bonus payments arising from his employment from June 2009 to February 2014 were not received by him. He said, “I believe that they were deposited into (the wife’s) mother’s Australian bank account”.
The husband was cross-examined about his alleged payment of work bonuses to the wife to assist her and her mother. He stated that he had no recollection as to what he did with bonuses. Later in cross-examination the husband was cross-examined about paragraph 134 of his Affidavit, and his opening of a cash investment trading account with (omitted) bank. He stated that it was sometime after the end of the relationship that this account was opened. He stated that he established this account with funds from his employer bonuses and $3,000-$4,000 worth of savings.
In cross-examination the wife denied that the alleged work bonuses were paid to her by the husband.
The Court does not accept the husband’s evidence that he gave his cash bonuses, set out in annexure A to his Affidavit, to either the wife or her mother.
Property Adjustment
Pursuant to section 90SM(1)(a) of the Act, in property settlement proceedings, the Court may make such order as it considers appropriate, in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them, altering the interests of the parties to the de facto relationship in the property. Such order may include an order requiring either or both of the parties to the de facto relationship to make, for the benefit of either or both of the parties to the de facto relationship, such transfer of property as the Court determines.
The Court, in determining property proceedings, should firstly identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property that is available for distribution between them. The Court should then determine whether it is just and equitable to make an order altering the parties’ interests in such property. If the Court is satisfied that it is so just and equitable, the Court should then consider the contributions made by each of the parties pursuant to section 90SM(4) of the Act before looking at their future needs by reference to the factors set out under section 90SF(3) of the Act.
Balance Sheet
A joint balance sheet was annexed to the wife’s case outline (Exhibit A) which provided:
Ownership
Description
Wife/de facto partner’s value
Husband/ de facto partner’s value
ASSETS
1.
J
Property B (subject to joint valuation being obtained by the parties)
675,000
675,000
2.
J
Property S
637,500
637,500
3.
W
(omitted) Bank account (omitted)
1,842
1,842
4.
W
(omitted) bank ((omitted))
7,636
7,636
5.
W
Honda (omitted) motor vehicle(Registration:(omitted))
20,000
20,000
6.
H
(omitted) bank account ((omitted))
13,750
2,339
7.
H
(omitted) Bank Investment account ((omitted))
52,000
0
8.
H
Holden (omitted) motor vehicle
20,000
7,000
9.
J
Household contents
10,000
10,000
TOTAL
NK
NK
LIABILITIES
10.
J
Mortgage in relation to property situated at Property B
417,640
417,640
11.
J
Mortgage in relation to property situated at Property S,
500,597
500,597
12.
H
(omitted) Credit Card (#(omitted))
18,959
13.
H
(omitted) Credit Card (#(omitted))
7,000
14.
H
(omitted) bank Mastercard (#(omitted))
16,630
15.
H
(omitted) Credit Card (#(omitted))
20,093
16.
H
(omitted) Credit Card (#(omitted))
56,370
17.
H
(omitted) Credit Card
8,497
TOTAL
918,237
1,045,786
SUPERANNUATION
Member
Name of fund
Type of interest
Wife / de facto partner’s value
Husband / de facto partner’s value
18
H
(omitted)
94,277
94,277
19
W
(omitted) Super
69,000
69,000
Total
$163,277
$163,277
As to the assets listed in items 3-9 above, item 5, the wife’s car will not be listed in the balance sheet as the wife largely funded its purchase in 2009, but the court will take into account the sum of $1,250 paid by the husband to the wife for the wife’s deposit to purchase this car. Items 3, 4, 6, 7, being bank account monies, appear to have arisen post separation and did not relate to the parties’ relationship, and will not go into the balance sheet. As to item 8, the husband’s car, there is no evidence to suggest that the wife made any relevant contribution towards its purchase; this item will not go into the balance sheet. Neither party sought to make a contribution submission in relation to item 9, household contents and this item will not go into the balance sheet.
The liabilities listed in items 12 to 17 were incurred by the husband for his own private purposes post separation (in particular, the Court notes the husband’s oral evidence, and his Affidavit evidence at paragraphs 127 to 133, 142-143); they did not relate to the jointly purchased properties or any expense that the husband met for the benefit of the wife. Accordingly, those liabilities will not go into the balance sheet.
As to the superannuation interests of the parties in items 18 and 19, neither party sought to include superannuation entitlements in the assessment of their respective contributions under the Act. There is no evidence as to the superannuation funds at commencement of cohabitation or as at separation. The parties have not sought a splitting order in relation to superannuation. Accordingly, it is a case where the court can adopt a 2 pool approach, one pool for non-superannuation assets and another for superannuation assets, and the court will make no order in relation to superannuation.
At trial date, the Court finds the parties had net assets, not including superannuation, of $394,263, represented by the final balance sheet below.
Ownership
Description
Wife/de facto partner’s value
Husband/ de facto partner’s value
ASSETS
1.
J
Property B (subject to joint valuation being obtained by the parties)
675,000
675,000
2.
J
Property S
637,500
637,500
TOTAL
1,312,500
LIABILITIES
10.
J
Mortgage in relation to property situated at Property B
417,640
417,640
11.
J
Mortgage in relation to property situated at Property S
500,597
500,597
TOTAL
918,237
SUPERANNUATION
Member
Name of fund
Type of interest
Wife / de facto partner’s value
Husband / de facto partner’s value
18
H
(omitted)
94,277
94,277
19
W
(omitted) Super
69,000
69,000
Total
$163,277
$163,277
Section 90SM (3) of the Act
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of the property, and that the continuance of the current legal ownership of the property would not afford them justice and equity. The parties join in seeking orders for property adjustment.
Contributions
The court refers to the case-law dicta below, relating to s79 property proceedings, and which are relevant to the within de facto property proceedings.
In In the Marriage of Harris (1991) 104 FLR 458 the Full Court said in assessing contributions:
“The task of the court in proceedings under section 79 is not akin to an accounting exercise. To borrow a phrase used by McClelland J in Davey v Lee (1990) DFC 95-084; (1990) 13 Fam LR 688 at 689 in relation to section 20 of the De Facto Relationships Act 1984 (NSW):
...the Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind.”
In Pierce & Pierce [1998] FamCA 74 the Full Court at 85,881:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.”
More recently in Dickons & Dickons [2012] FamCAFC 154, the Full Court said:
“23. We wish also to refer to the approach of the Federal Magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
24. There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
25. Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
26. The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.”
The court refers to its discussion of the evidence above, relating to the parties’ contributions.
The husband contended that a finding should be made that his contributions, together with a s90SF(3) adjustment in his favour, should be assessed at 65% to the wife, 35% to the husband.
The wife submits that a finding of 85% contribution by the wife to the husband’s 15% should be made by the Court. In final submissions, the wife extrapolated such assessment figures from the wife’s monetary schedules, relating to her contended financial contributions for both jointly owned properties, and referred to in paragraphs 40 and 49 of her trial affidavit.
The husband, in paragraph 68 of his own trial affidavit, conceded the wife’s superior financial contributions towards the Property B mortgage loan but to a lesser figure than that contended by the wife.
The court is unable to determine with complete accuracy the parties’ respective mortgage contributions towards the Property B property. The parties declined to conduct significant cross-examination on this issue, particularly by reference to the parties’ competing monetary schedules in relation to this property and the bank statements in evidence. Nevertheless, the court is satisfied that overall the wife’s mortgage repayment contributions for this property substantially exceeded the husband’s contributions.
The parties commenced their relationship with very modest assets.
As discussed previously, the husband, throughout the relationship, paid for various expenses, on behalf of the wife. Whilst the court is unable to accurately determine monetarily the extent of such payments by the husband, the court infers that such payments assisted the wife, to a not insignificant extent, in saving funds through her employment income, and thereby to make contributions towards the purchase and outgoings of the jointly owned properties.
In this context, the court notes the husband’s income, at all relevant times during the relationship, was superior to the wife’s income, even taking into account the husband’s financial assistance to his mother from January 2013. The wife, having very modest assets at the commencement of the relationship in March 2009, managed to save, inter alia, in excess of $45,000 to pay for the deposit and legal fees on the Property B property’s purchase in May 2011, and $30,000 in total for the deposit of the Property S property between August 2011 and January 2012.
In summary, the contributions of the parties which have been taken into account are:
The wife’s contributions to the deposit and legal fees for the Property B property of $48,386. These were very significant contributions by her, being offset to some extent by the husband’s indirect contributions to certain of the wife’s expenses during the relationship.
The parties’ payment of about $7,005 for legals in respect to the purchase of Property B.
The parties’ approximately equal contributions to the renovation costs of Property B of $6,000.
The parties’ direct financial contributions to the outgoings and mortgage repayments on Property B from its purchase until about May 2012, in the sum of about $300 each per month (being the differential between the rental income and the mortgage repayment).
The wife’s direct financial contributions to the outgoings and mortgage repayments on Property B, being substantially in excess of the husband’s contributions in this regard, from July 2012 to February 2015, and her sole contributions in this regard after February 2015. These contributions of substance of the wife are offset to a not insignificant extent by her occupation of that property since July 2012.
The wife’s direct financial contributions to the deposit, legals and stamp duty on Property S, totalling some $40,117, being very significant contributions, but offset to some extent by the husband’s indirect contributions to certain of the wife’s expenses during the relationship.
The husband’s payment of $1,250 to the wife relating to the purchase of her car.
The husband’s direct financial contribution to the deposit of Property S in the sum of around $25,000, which was a significant contribution.
The parties’ approximately equal contributions to the outgoings including mortgage repayments on Property S between December 2013 to February 2015.
The wife’s sole direct financial contributions to the outgoings and mortgage repayments on Property S from February 2015 up to July 2016, including August 2016, being very significant contributions.
The wife’s advance of $25,000 to the husband in January 2013 to assist with his purchase of the Property M property, following which the wife obtained no benefit, which should be regarded as a very significant contribution.
In all the circumstances, and doing the best it can, the court assesses the wife’s contributions at 70% and 30% to the husband.
Section 90SF(3)
The wife is aged about 33 years and the husband 35 years.
The parties are in good health. Both parties are in full-time gainful employment, and they are each able to support themselves from their own income.
The husband has superannuation entitlements of some $94,277 and the wife’s superannuation entitlement is $69,000. Again, the parties have not sought a splitting order. The Court does not propose to disturb those entitlements. The parties will not have access to the superannuation funds for some time.
Both parties have a motor vehicle. They have very modest cash assets. The husband has personal liabilities of some $127,549 which arose post separation and did not relate. The husband’s income is superior to that of the wife’s income. His superannuation interests are worth more than the wife’s. The husband is likely to be able to make greater contributions to his superannuation interests compared to the wife by reason of his superior income.
The husband submitted, inter alia, that his financial assistance towards his ill mother, resulting in him paying about $517 per week from January 2013 for the mother’s medical expenses, is a relevant matter to take into account; in this context, he estimates that he has paid at least $107,000. He refers to his mother’s diagnosis of end stage pulmonary fibrosis in 2011. Her condition has been deteriorating. The husband’s mother does not have any source of income. He refers to his mother’s “terminal illness”. The husband’s assumption of some financial responsibility towards his ill mother is not relevant under section 90 SF(3)(e). Section 90SF(3)(e) of the Act is in similar terms to s75(2)(e) of the Act. In the Marriage of W [1980] FamCA 63; (1980) 6 Fam LR 538 at 550, Nygh J stated,
Nor is there any support for a contention that the wife has a moral responsibility to maintain her parents which might be relevant under para (e) of s 75(2). Such an obligation may exist in some cases where a parent has donated funds or property to a child in the expectation of being financially maintained by the child: see Aroney.
The husband submitted that if he is not able to retain the Property S property, then he will be required to pay stamp duty on any other property that he is to purchase, and in calculating the stamp duty on the Property S property as valued ($637,500), the husband would be required to pay some $24,450 in stamp duty. The Court rejects this submission in the context of section 90SF(3).
In the circumstances, the Court is not satisfied that there should be any adjustment in favour of either party pursuant to section 90SF(3).
Justice and Equity
The husband seeks to retain the Property S property with its associated debt, with the Property B property and associated debt to be retained by the wife. The mortgage debt on the Property S property is $500,597. The husband’s Financial Statement indicates his total average weekly income is about $3,077, and his weekly total personal expenditure is about $3,146. Accordingly, the husband’s financial ability to retain the Property S property, including making a capital payment to the wife of $18,625, may be in doubt. Nevertheless, in the view of the Court, the husband should be given an opportunity of 3 months to seek to obtain funds with a view to retaining this property, consistent with the Court’s contribution assessment.
Pursuant to the Court’s contribution assessment (Wife 70%, husband 30%), the wife is entitled to $275,984 (70% of the net property pool of $394,263).
Pursuant to the Court’s contribution assessment, the husband is entitled to $118,278 (30% of the net property pool of $394,263).
Should the husband be in a financial position to retain the Property S property, then his payment to the wife will be as follows:
Husband retains Property S property: $637,500, less mortgage debt $500,597; net balance $136,903
Wife retains Property B property: $675,000, less mortgage debt $417,640; net balance $257,360.
Therefore, with the husband retaining the Property S property and associated debt, and the wife retaining the Property B property and associated debt, he should pay the wife $18,625 ($136,903 less $118,278).
Neither party sought a superannuation splitting order, noting the husband’s entitlement of $94,277 and the wife’s at $69,000.
The court refers to its above contribution assessment. The disparity of some $157,706 resulting from such assessment recognizes appropriately the parties’ respective contributions as found by the court.
Summary
Consistent with the Court’s contribution assessment, should the husband retain the Property S property and associated debt, then he will be required to transfer his interest in the Property B property to the wife (with the wife to carry the associated debt of that property), together with payment to her of $18,625, with the wife transferring to the husband her interest in the Property S property.
Should the husband, within 3 months, not be in a position to make the above payment to the wife, then he will be required to transfer his interests in both properties to the wife (with the wife to discharge the associated debts and re-finance the mortgages), and the wife, within a further month, will be required to pay him the sum of $118,278 (30% of the net property pool of $394,263).
In the circumstances of this case, and for all the reasons set out above, the Court considers that the orders proposed to be made will produce a just and equitable result as between the parties and are appropriate.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Judge Newbrun
Date: 23 June 2017
