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Lake & Platt [2011] FMCAfam  1186  (11 November 2011)

Federal Magistrates Court of Australia - Family Law

Lake & Platt [2011] FMCAfam  1186  (11 November 2011)

Last Updated: 13 December 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LAKE & PLATT

[2011] FMCAfam 1186

REPRESENTATION

THE COURT ORDERS THAT:

(1) After payment out of the sums required pursuant to the orders of the Court of 30 August 2011 and 28 September 2011 there be a payment out of all monies remaining in the de facto wife’s solicitors trust account an apportionment of 55% to the de facto husband and 45% to the de facto wife and shall be in accordance with paragraphs 26 to 27 inclusive of the reasons published in these proceedings and appearing as a notation in these orders.
(2) Any application filed in this Court by either party in the 24-month period from the date of the making of these orders be listed in the docket of Hartnett FM if possible.
(3) Otherwise all extant applications are dismissed.

AND THE COURT NOTES THAT:

Paragraphs 26 and 27 as referred to in order 1 herein are as follows:

26. The orders of 30 August 2011 and 28 September 2011 are to be read in conjunction and should remain operative. They set out the application of the proceeds of sale of the real property. They provide for the payment of costs to the de facto wife. However for present purposes the sums of $25,000 and $15,000 together with the costs payable to the de facto wife ($4,320) should be notionally added back to the asset pool available for distribution.
27. Following the add-back referred to in the preceding paragraph the remaining property pool after payment out of the liabilities referred to in paragraph 12(2) of these reasons together with the payment out of the de facto wife’s credit card which should first occur, is in the sum of approximately $120,695 subject to whether a total sum of $5,000 was spent on repairs for sale. It may have been a lesser sum which marginally increases the pool. From this pool should also prior to distribution come the payment of the de facto wife’s costs earlier ordered.
    

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

MLC 6403 of 2010

Applicant

And

Respondent

REASONS FOR JUDGMENT

1. These proceedings commenced upon the applicant mother making application for property orders by application filed 15 July 2010. Thereafter, the father filed a response on 10 September 2010 in which he sought not only property orders but parenting orders with respect to the parties’ daughter, [X] born [in] 2006 who is now aged five years.
2. The matter was listed for final hearing 2 November 2011 and the parties resolved their differences with respect to their competing applications for parenting orders and entered into orders by consent with respect to their daughter, [X]. Those orders provide that each of the mother and father have equal shared parental responsibility for the child, that [X] live with her mother and spend time with her father in a graduated regime of increased time spent with between father and child. Because of the nature of the orders and particular facts of this case, I propose to make an order at the conclusion of these proceedings that any further applications initiated by either the mother or father for parenting and/or consequential property orders be listed into my docket in the next 24-month period.
3. The outstanding matter now requiring judicial determination is the parties’ competing property applications.
4. Statements of fact contained in these reasons are findings of fact on the balance of probabilities.
5. The de facto husband and wife commenced to reside together in March 2005 and separated on 17 June 2009. Each of them had been previously married, the de facto wife having two children from her previous marriage, namely [A] born [in] 1993 and [B] born [in] 1994 and the de facto husband having four children from his previous marriage namely [C] born [in] 1994, [D] born [in] 1996 and [E] and [F], born [in] 2000.
6. Throughout the parties’ period of cohabitation, the de facto wife’s two children resided with the parties on a week about basis. Their biological father, with whom they resided in the alternating weeks, made no payments of child support to the mother for their support. He nonetheless paid private school fees and other expenses for the children, [A] and [B], as and when necessary. The balance of their daily support was met by the income, in the main, earnt by the de facto husband in these proceedings.
7. Likewise during the period of cohabitation of the parties, the de facto husband’s children spent time residing with the parties initially on a week about arrangement, but subsequently in a less regular way as the relationship between the father (the de facto husband) and his children encountered difficulties. Throughout the period of cohabitation, the de facto husband paid child support as assessed in respect of his four children from his previous marriage in addition to his contribution for the support of the de facto wife’s children. Since separation, he has also paid child support as assessed for the parties’ daughter [X] and continues to do so.
8. The de facto wife did not make a direct financial contribution to the support of the de facto husband’s children, but she made an indirect contribution to their support in her provision of a home in which they could spend time, the provision of meals and other requirements of their daily lives whilst the children were in the parties’ care. She also obviously forewent the income expended by the husband on the child support obligations that he had in respect of his four biological children.
9. The father filed a financial statement in the proceedings sworn 28 October 2011. He relied on the evidence contained therein. He is in receipt of a total average weekly income of $1,292 per week as a [occupation omitted]. He is currently in receipt of WorkCover payments in that sum and performs, therefore, no extra hours. His employer makes a contribution to his superannuation, and in addition, he salary sacrifices to the [1] Super Fund in the sum of $107 each week. He commenced to make such salary sacrifice at around, or shortly prior or just after, the cessation of the relationship between the parties. He continues to make such voluntary weekly payment.
10. Since separation in June 2009, the de facto husband has resided with his mother, Ms P, and he currently pays her the sum of $200 each week toward his expenses. Earlier this year, he leased a vehicle, being a [omitted], and the cost of such lease is in the sum of $305 each week, which includes all the running expenses of the said vehicle. The child support paid by him for his five children is in the sum of $230 each week and his total expenditure is said by him in his financial statement to exceed his income.
11. The de facto wife filed, likewise, a financial statement in the proceedings and she relies on the contents of that document as evidence she puts before the Court. That financial statement was filed 21 July 2011. It was sworn the same date. Her total average weekly income is $826 gross in her employment as a [omitted]. She is now employed full-time, having been employed in a part-time capacity throughout 2010. Her average weekly income also includes a family tax benefit paid to her of $90 each week and child support of $45 paid by the de facto husband to her for support of the parties’ daughter, [X]. Her income is considerably less than that of the de facto husband.

Asset pool

12. The asset pool of the parties is agreed between them and is as follows:

Contribution

13. Throughout the parties’ cohabitation they resided in the former matrimonial home. The de facto husband purchased the property at Property H in late 2004. He is the sole registered proprietor of the property and solely liable for the mortgage encumbrance with respect to it. He purchased the property for $325,000 together with costs, applying funds received by him from the settlement of his previous matrimonial proceedings. He completed the purchase through a loan secured by a mortgage over the property and in the sum of $190,000 borrowed from the Victorian Mortgage Management Group. He was unable to complete the purchase without financial assistance from his mother, who gave him the stamp duty amount necessary and paid solicitors’ fees in the sum of $8,100. The de facto wife was, at the time, residing in rental accommodation and she and her two children moved into the home of the de facto husband upon cohabitation commencing.
14. In March 2005, the de facto wife received the sum of $40,000 by way of cheque deposited into a bank account in her name and being the proceeds of an informal property settlement with her previous husband. She gave evidence in the proceedings that she had brought into the relationship a sum of $55,000 together with a further cash amount of $6,000. This evidence, deposed to by her in her most recent affidavit sworn 26 October 2011, was slightly contradictory to that contained in an earlier affidavit sworn by her on 28 September 2010. I am satisfied from the evidence tendered (exhibit SL1) and the totality of the evidence that the de facto wife received an amount of $40,000 at around the commencement of cohabitation and no further sums. She applied such funds to the daily household expenses of the family unit and in doing so, supplemented the income receipt into the household which derived from the de facto husband’s employment as a [omitted].
15. The de facto husband argued that at the commencement of cohabitation the de facto wife had numerous outstanding bills. I cannot be satisfied on the balance of probabilities that, save for one amount of $1,140 owing to TRUenergy, that was in fact the case. The application of the de facto wife’s funds from the time of her receipt of the sum of $40,000 was to initially deposit the sum of $30,000 in an investment account and thereafter to apply the total sum of $40,000 toward the ongoing expenses of the family (which often exceeded income) including a holiday in Hawaii. The de facto husband’s evidence as to the application of the de facto wife’s funds was to the effect that he was unaware of the manner of the de facto wife’s expenditure and thus could not properly challenge her account. He agreed that money in the household was an issue and that at times there was simply not enough, requiring him to borrow sums from his mother.
16. Thus, at the outset the husband made a significantly greater direct financial contribution than the wife in his acquisition of the former matrimonial home with the application of the sum of $135,000, together with the payment of costs and stamp duty of a total sum of approximately $148,000. In addition at the commencement of cohabitation, the de facto husband had accrued superannuation benefits, he having commenced to contribute to a fund in 1996, some nine years earlier. The de facto husband held an accumulation benefit in the [1] fund of $43,000 at the commencement of cohabitation and a defined benefit interest of $23,818. At separation he held an accumulation interest of $44,177 and a defined benefit interest of $55,191. A total increase in benefits of $32,550. They have continued to increase post separation and his superannuation benefits are now in the sum of $126,695.
17. Life in the parties’ household was often hectic and the care arrangements for the children from previous relationships often changing. Earlier in the cohabitation period and for some extensive time, the parties would have no children in one week and six or seven children in their care in the following. [X] was born in 2006 and one of the de facto husband’s daughters [C], ceased to attend at the parties’ home in late 2008. The de facto husband was responsible for financially supporting the parties and their children and as noted earlier he occasionally borrowed funds from his mother to assist with living expenses. By 2009 the parties’ relationship was breaking down. In addition, the de facto husband incurring substantial legal bills paid for, in the most part, by his mother in relation to proceedings for parenting orders in respect of the child [C]. The relationship between each parties’ respective children to their previous partners was presenting difficulties and the relationship could not survive.
18. The de facto husband commenced to live with his mother in June 2009 but he continued to pay the mortgage on the former matrimonial home in the sum of $680 each fortnight, as well as child support for [X] and each of his other children. Until March 2010, he paid in addition all outgoings, being gas, electricity and water costs of the former matrimonial home. Thereafter, he continued to meet all insurances, rates and mortgage repayments due with respect to the former matrimonial home until he became sporadic in those payments in the first half of 2011 and ceased to meet such payments in July 2011, contrary to then existing court orders.
19. The de facto husband’s mother, Ms P, swore an affidavit in the proceedings on 31 October 2011. She assisted the household of the de facto husband and wife by providing them with essential food items from time to time, by providing the de facto wife with a motor vehicle in 2008 at a less than market value and by providing other financial assistance to her son over the years. Her contribution, outside of solicitors’ fees and until the point of separation, was in the sum of $11,640. This was a contribution on behalf of the de facto husband.
20. The de facto husband concedes that an adjustment should be made in the de facto wife’s favour when looking to the s.90SF(3) of the Family Law Act 1975 (Cth) (“the Act”) matters in relation to the de facto wife’s primary care of the parties’ daughter [X] and the differential in their respective incomes. He puts to the Court that he is unsure as to his earning capacity in future years given that he is presently in receipt of WorkCover payments and has been since earlier in this year. He provides, however, no medical evidence as to his future prospects of employment and whilst being in receipt of WorkCover payments or returning to employment with [omitted], he is in receipt of an income into the future which exceeds that of the de facto wife. He has been a [occupation omitted] for a number of years and is so qualified. The de facto wife has no qualifications and has returned to full-time employment out of necessity in the course of 2011. I find the earning capacity of the de facto husband to exceed that of the de facto wife. The de facto wife argues that the s.90SF(3) matters should provide her with a substantial percentage adjustment of the asset pool in her favour. She concedes the initial contribution of the de facto husband to be one significantly in excess of her own and puts the case that these competing factors should equalise each other to result in an equal distribution of the asset pool as between the parties.
21. The de facto husband’s argument is that he should receive a significant percentage adjustment for his contribution to the asset pool which should be adjusted downwards slightly in favour of the de facto wife for the s.90SF(3) matters resulting in a property pool distribution excluding superannuation of 60 per cent to him and 40 per cent to the de facto wife. Thereafter, out of his 60 per cent share should come the payment of $4,320 earlier ordered against him to be paid to the de facto wife in costs and which remains outstanding.
22. Neither party has sought a splitting order in the proceeding and both parties are content to leave their superannuation entitlements where they are. The de facto wife however asks the Court when considering the justice of the case (s.90SF(3)(r) of the Act) and the justice and equity of the orders proposed by each party to take into account that the de facto husband has significant superannuation entitlements relative to her own and to note the relatively small size of the asset pool and argues that both factors are supportive of her argument. Indeed the Court observes there to have been a diminution of the parties’ joint asset pool during cohabitation. In addition, the de facto wife claims the de facto husband’s non-compliance with early orders of the Court made 2 August 2011 have led to 10 per cent of the asset pool being damaged. I reject this argument. The de facto husband could have made some partial payment toward the mortgage but not the total sum. He should have sought a discharge of the ex parte order based upon his financial circumstances and in accordance with the liberty to apply order but failed to do so. He has been diagnosed with post traumatic stress disorder and does not know when he will return to work. He said as to the mortgage payments in paragraph 34 of his affidavit sworn 28 October 2011:
    • “Notwithstanding that I did not have occupation of the property, up until April 2011 I maintained payment of all due mortgage repayments, subject to a couple of defaults, in the sum of at least $340 per week (increased to $345 per week in early 2011). I made a couple of further payments in May 2011, however since June 2011 it has been impossible for me to maintain due payments, as I had ceased working and my income had reduced.”
23. And paragraph 35:
    • “I have similarly endeavoured to maintain payment of rates and water rates. I have not been able to pay these expenses since in or about April 2011. I have maintained insurance for the property at all times.”

It is clear on the evidence at this final hearing that he made a further post separation contribution of significance.

24. On 2 August 2011, the de facto husband was ordered to forthwith pay all instalments pursuant to the mortgage and all rates as and when they fell due, including all arrears of payments with respect to the mortgage then outstanding in the sum of $1,879.50, so as to remedy the then mortgage default. The de facto wife’s costs of that application were fixed in the sum of $1,320 and were to be paid by the de facto husband upon settlement of the property proceedings between the parties, or upon a judicial determination of the matter.
25. Orders made 30 August 2011 provided for the sale of the former matrimonial home with the proceeds of sale of the real property, after payment out of expenses, to be placed in a trust account of the de facto wife’s solicitors to be held pending order of the Court or written agreement of the parties (the property has sold). Those orders also provided for the father to pay the de facto wife’s costs of and incidental to the application in a case fixed in the sum of $3,000. Settlement of the sale of the property is on 21 November 2011. From the proceeds of sale, amounts as set out in paragraph 38 of the de facto husband’s affidavit sworn 28 October 2011 are to be deducted, including an amount of $25,000 to the de facto wife and $4,320 in her costs, and an amount of $15,000 to the de facto husband, and an amount to his mother of $4,725. The Court is to take into account now that earlier distribution ordered of $25,000 to the de facto wife and $15,000 to the de facto husband and does so characterizing those payments as an advance on property settlement.
26. The orders of 30 August 2011 and 28 September 2011 are to be read in conjunction and should remain operative. They set out the application of the proceeds of sale of the real property. They provide for the payment of costs to the de facto wife. However for present purposes the sums of $25,000 and $15,000 together with the costs payable to the de facto wife ($4,320) should be notionally added back to the asset pool available for distribution.
27. Following the add-back referred to in the preceding paragraph the remaining property pool after payment out of the liabilities referred to in paragraph 12(2) of these reasons together with the payment out of the de facto wife’s credit card which should first occur, is in the sum of approximately $120,695 subject to whether a total sum of $5,000 was spent on repairs for sale. It may have been a lesser sum which marginally increases the pool. From this pool should also prior to distribution come the payment of the de facto wife’s costs earlier ordered.
28. Taking into account all of the above matters in the justice and equity of the case determine that such remaining asset pool should be divided as to 45% to the de facto wife and 55% to the de facto husband with each retaining their respective superannuation benefits. The justice and equity of the orders require the de facto husband’s significant contributions to be recognised, both parties’ ongoing needs in relation to the support of their children to be recognised as well as the husband’s greater resources in the form of his more substantial superannuation benefits.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Date: 11 November 2011