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  • Unreported Judgment

MAD v HTM

 

[2011] QSC 159

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO:

Trial Division

PROCEEDING:

Originating Application

DELIVERED ON:

10 June 2011

DELIVERED AT:

Brisbane

HEARING DATE:

28 and 29 March 2011

JUDGE:

Mullins J

ORDER:

Adjourn the proceeding to a date to be fixed for submissions on the form of the orders and the costs of the proceeding

CATCHWORDS:

FAMILY LAW – DE FACTO RELATIONSHIPS – ADJUSTMENT OF PROPERTY INTERESTS – GENERALLY – where parties in a de facto relationship for 27 months with no children in the household – where both parties were in paid employment and capable of continuing in paid employment – where compensation payment paid to husband during the relationship for pre-existing army injury quarantined from adjustment of property interests – where parties purchased a house and car using bank loans – where husband’s financial contributions were greater prior to separation – where on separation wife remained in possession of the house and car – where wife’s contributions to the post-separation loan repayments were greater – where husband should be credited for notional rent for the wife’s use of his share of the house property – whether just and equitable to make property adjustment order

Property Law Act 1974, s 286, s 334, s 341

In Marriage of Aleksovski (1996) 135 FLR 131, considered

FO v HAF [2006] QCA 555; [2007] 2 Qd R 138, followed

COUNSEL:

SD Anderson for the applicant
The respondent in person

SOLICITORS:

Hall Payne Lawyers for the applicant

[1] The parties were de facto partners for 27 months between June 2006 and September 2008.  There were no children of the relationship.  When they separated, the respondent remained living in the home that they had purchased in joint names at the commencement of the relationship and kept possession of the 2006 Calais Holden that had also been purchased in joint names.  The parties have not resolved their property issues. The applicant applies for a property adjustment order pursuant to s 286 of the Property Law Act 1974 (PLA).  It is unfortunate that the period between the breakdown of the relationship and the hearing of the application was longer than the duration of the parties’ relationship.

History of the relationship

[2] The applicant met the respondent when he relocated to Queensland in March 2006.  He had two teenage children from his former relationship who did not relocate with him.  The respondent had two adult children from her former relationship.  When they met, the applicant was 38 years old and the respondent was 44 years old.

[3] The parties bought a house at Regents Park for $275,000.  The deposit of $55,000 was paid by the applicant from his savings that were in a term deposit.  The applicant also paid the fees associated with the purchase.  They obtained two housing loans and a personal loan from the National Australia Bank to enable the purchase of the home and the motor vehicle to be completed.  The car was chosen for its suitability for the respondent’s employment. They opened joint account ### 7892 into which the applicant paid the balance of his term deposit and other funds held by him in his Commonwealth bank account and to which they both deposited their incomes during their relationship.  They furnished the home largely from funds contributed to their joint account.  Both parties had chattels they brought to the relationship.  The applicant has retained his coin collection and otherwise the chattels brought to the relationship are of no significance in this proceeding.

[4] The applicant had been in the army between 1992 and 1994.  He left following a work related injury he suffered in December 1993.  He received a compensation payment in 1996 relating to the impairment of his back.  As a result of encouragement by the respondent during their relationship and her seeking legal advice for him, he pursued a further compensation payment in respect of impairment in the functioning of his legs, as a result of the same incident.  He received a net compensation payment of $21,684.54 which was deposited to the parties’ joint account.  The applicant withdrew $20,000 from the joint account and deposited it into the parties’ variable housing loan account number ### 2778 that had a redraw facility that permitted the borrowers to “redraw” funds to the amount stipulated as available for redraw against the security of mortgage of their house property.

[5] The respondent asserted that the applicant made a gift to her of the amount of this compensation payment.  That assertion was rejected by the applicant in his evidence.  I have no doubt that at the time of obtaining the compensation the respondent was grateful to the applicant for her support of him.  Having regard to the purpose of the compensation and the applicant’s dealings with it, I accept the applicant’s evidence that he did not give this compensation away to the respondent. That is supported by the failure of the respondent to assert that a gift of $20,000 had been made to her, when the opportunity arose soon after separation of the parties to raise such a claim.  The applicant’s solicitors noted in their letter to the respondent dated 1 October 2008 that approximately $20,000 of the possible redraw amount was funds the applicant had deposited as a result of receiving compensation relating to an injury he sustained before the relationship began.  The respondent’s then solicitors in their letter dated 3 October 2008 replied that they considered that sum to be an asset of the relationship, with no mention of the moneys being paid to the respondent as a gift.

[6] This compensation payment was made in respect of a permanent disability which had affected the applicant for almost 13 years before he commenced his relationship with the respondent and will continue to affect him into the future.  In view of the short period of the parties’ relationship, and despite the respondent’s assistance to the applicant in encouraging him to pursue the compensation claim, I consider the receipt of this sum of approximately $20,000 should be quarantined for the applicant’s benefit:  cf In Marriage of Aleksovski (1996) 135 FLR 131, 139, 147-148.  

[7] The applicant received a further compensation payment in December 2008 for the pain disorder that he suffered from his injuries in the army. The amount received of $16,279.49 has been used by him for joint expenses for himself and his new partner.  Even though this further compensation was obtained after steps taken during the parties’ relationship, for the same reasons I applied to the sum of $20,000, this further compensation should not figure in the adjustment of the parties’ property interests.

[8] Prior to their cohabitation, the applicant had been in receipt of a pension, because of his army injuries.  In June 2006 he commenced work as a traffic controller earning about $33,000 per annum.  From May 2007 until February 2009 he worked for Southern Regional Pipeline Alliance as a traffic controller/supervisor earning about $106,150 per annum. 

[9] The respondent was employed as an account manager when the parties commenced their relationship, but that employment ended in October 2006.  The respondent obtained work for three to four weeks in February 2007, but otherwise remained unemployed until July 2007.  The respondent’s taxable income in 2006 was $22,595 and $21,865 in 2007.  From July 2007 until the date of separation the respondent was employed as a sales representative earning about $52,000 per annum plus a car allowance of $15,000.  The respondent was retrenched from that position in November 2008.  It is common ground that during their relationship the applicant contributed income of $130,658 to the joint account and the respondent contributed income of $85,500 to the joint account.

[10] The applicant by his solicitors’ letter sent in September 2008 proposed making a weekly contribution to the joint account of $350 to assist in meeting the loan repayments and insurances after separation.  That was initially implemented.  At the time of separation the personal loan that was used for the purchase of the car had a balance of $36,166 which I infer was then greater than the value of the car, in view of the agreed value of the car at the date of the hearing.  When the parties separated, they were usually making weekly payments of $210 in respect of this personal loan.  The respondent was keen, however, to keep the car for her own use, particularly in relation to her employment. 

[11] In October 2008 each of the parties took $8,000 from the joint account.  It is not clear that the parties were agreed on the basis of these withdrawals at the time they were made. The respondent disputes the applicant’s claim for inclusion of this sum of $16,000 in the pool of assets for distribution on this application.  I infer, however, from the timing of the withdrawals and that the parties were endeavouring to sort out their financial affairs with the benefit of legal advice, that the distribution to each of them of the sum of $8,000 was an interim arrangement, pending settlement of their property matters.  That total sum of $16,000 must therefore be added back to work out the pool of assets available for final distribution.

[12] The applicant was made redundant on 10 February 2009.  He received a lump sum payment of $11,202 which included payment for accumulated RDO and sick leave, holiday pay and a bonus of $5,266.48.  The bonus was calculated on the basis of $1,500 for each period of six months worked on the pipeline.  In addition, the applicant was a member of the Australian Construction Industry Redundancy Trust and the balance in his account on the basis of contributions received whilst employed by the Pipeline Alliance was $6,424.80.  The applicant’s plan is to transfer the balance into superannuation, as that would mean no tax would apply if withdrawn after retirement.  If the balance is withdrawn before retirement, it attracts tax of 30% plus the Medicare levy.  The issue arises whether any part of the lump sum payment and the Redundancy Trust amount should be treated as assets of the relationship.  Because of the short period of the parties’ relationship, the modest proportion of these payments that can be attributed to the period of the relationship and their receipt after separation, I do not specifically treat any part of these amounts as assets of the relationship.  Similarly, the redundancy payment of $5,000 that was received by the respondent after separation and the tax refund received by each party after separation should not be treated as assets of the relationship.         

[13] On 10 February 2009 the applicant withdrew $31,000 from the redraw account ### 2778 and deposited that sum into an account with NAB in his name solely.  The applicant’s explanation for doing that was that his new partner was not employed and he was concerned to access enough money to contribute to the loan repayments for which he was liable with the respondent and for his current rental and other living expenses, despite his redundancy.  I can understand the applicant’s concern to quarantine the sum of $20,000 from the compensation payment that he had paid into the redraw account.  It did not make any sense for him, however, to withdraw the additional joint funds of $11,000 as a lump sum for making contributions to the loan payments for which he was liable with the respondent.

[14] Of that sum $31,000, the applicant used $12,432.82 for contributions to the mortgages and joint bank account between February and August 2009, he continues to hold the sum of $10,000 on term deposit, he used $2,000 to buy a car in July 2009 and $1,622.05 to purchase a truck driver’s licence to improve his employment prospects.  The balance was used by him for living expenses.

[15] Immediately prior to the withdrawal of the sum of $31,000, the balance of account ### 2778 was $12,201.65.  The applicant’s withdrawal of $31,000 from that account increased the balance of the loan to $43,201.65.     The respondent communicated her concern to the applicant’s solicitors on 23 February 2009 that the applicant’s withdrawal of the sum of $31,000 from the redraw account had the effect of increasing the interest that was charged on the variable home loan. The respondent asserted that she would not be responsible for the added interest that would be incurred on the home loan from 10 February 2009.  In view of the conclusion that I have reached about quarantining $20,000 of that sum of $31,000 as representing the applicant’s compensation payment, I am not persuaded by the respondent’s claim that there should be an adjustment in her favour for all the interest that accrued, as a result of the withdrawal of the sum of $31,000.  I will take into account in the respondent’s favour in determining the adjustment order that at least $11,000 should have remained in that redraw account to be set off against interest on the loan whilst that sum of $11,000 was notionally used to meet the loan repayments.  It will not be a matter of precise calculation, as the sum of $11,000 would have reduced progressively as contributions for payments were deducted from it.  The withdrawal of $11,000 made an immediate difference of $38 in interest per month on the redraw account. As the sum of $11,000 was notionally used up in making payments within four months, the interest prejudice to the respondent was relatively slight.   

History of the proceeding

[16] The originating application was filed on 16 April 2009.  The applicant has been legally represented.  The respondent commenced without legal representation, then had a solicitor between September 2009 and May 2010.  She then represented herself.

[17] The applicant’s solicitors sent a letter to the respondent dated 19 May 2009 informing her that the NAB had not acted on the applicant’s instructions to reduce the amount he contributed to the joint account. Since February 2009 he had been paying $700 per week instead of $357 per week. The applicant had advised NAB to reduce the amount of his weekly contribution to $357. The applicant’s solicitors put the respondent on notice that the car loan and insurances for both the car and house would have to be covered by her.  That was confirmed by the dishonour notices issued by the NAB and addressed to the respondent for account ### 7892 in relation to direct debits that were not honoured to Allianz Insure in May, June and July 2009. 

[18] By letter dated 18 August 2009 the applicant’s solicitors advised the respondent that the applicant had instructed them that the last payment he would be making in respect of the loans secured on the Regents Park home was 21 August 2009 and wished to urgently list the property for sale.  The letter also reminded the respondent that neither the house nor the car were insured.

[19] By application filed on 11 September 2009 that was returnable on 5 October 2009, the applicant sought an order for the sale of the Regents Park property and for directions to facilitate the sale.  The respondent filed an application returnable the same date seeking an order that the applicant repay the sum of $31,000 into the redraw account and that thereafter both parties be restrained from withdrawing any funds from that account, except for repayment of the loans over the house property. 

[20] When the parties were before the court on 5 October 2009, they managed to resolve the application for final relief on terms reflected in their consent to an order made by White J on 5 October 2009.  The proposed arrangement that underpinned the order was that the respondent could remain in the house and keep the motor vehicle, but she had to purchase the respondent’s interest and otherwise resolve the property issues between them by making a payment of $63,500 to the applicant.  That order expressly provided that the respondent was responsible from the date of the order for all rates, mortgage payments, insurance and other costs related to the house property.  This suited the respondent, as she wanted to retain the property as her home and she was using the car as her work vehicle for which she obtained a generous car allowance.

[21] At the time the parties agreed to the making of the consent order, they were unaware that on 29 September 2009 the variable housing loan had a balance of $42,409.68 which was in excess of the account limit of $42,358.25 and all their loans were treated by the NAB as being in default and had been passed to the collections section of the NAB.  This presented difficulties for the respondent when she applied for a loan to refinance the joint borrowings, so that she could pay out the applicant under the terms of the consent order.  The respondent provided the NAB all the information required to make an application for a housing loan by 12 November 2009.  That application was declined on 27 November 2009.  A further application was made which was conditionally approved on 15 December 2009.  The respondent continued making regular payments in relation to the existing loans and received notification from the NAB on 9 February 2010 that the loan application that had been made in the names of the respondent and her new partner, Mr Mills, had been conditionally approved, subject to further requirements.   

[22] Despite numerous extensions of time for the respondent to perform the obligations under the order that were agreed to by the applicant, the respondent did not settle the purchase of the applicant’s interest in the home and the motor vehicle.

[23] Mr Mills moved into the Regents Park home in about February/March 2010.

[24] On 16 March 2010 the applicant filed an application to the court, intending it to be heard by a registrar, seeking an enforcement warrant in respect of paragraph 8 of the order dated 5 October 2009 that would result in a sale of the property on the basis there had been default in the carrying out of the terms of the order.  The applicant was required by the registrar to apply to a judge and filed an application for that purpose on 13 April 2010.

[25] The respondent was unemployed between December 2009 and April 2010.  She was cross-examined on the basis that it was her unemployment that prevented her obtaining unconditional finance to enable her to comply with the terms of the consent order.  The respondent’s explanation for the delay in securing unconditional finance was the need to prove to the NAB that payments under the existing loans could be made without default.  The history of the loans with the NAB prior to the consent order of 5 October 2009 supports that explanation and was the responsibility of both parties.

[26] The applicant’s application came before the court on 29 April 2010.  Directions were given and it was adjourned until 7 May 2010.  On 6 May 2010 the respondent and Mr Mills obtained preliminary approval from Suncorp-Metway Ltd for a standard variable rate loan in the sum of $300,000 for refinancing the loans over the Regents Park property.  The respondent considered that her problems were due to some $5,000 worth of arrears, as at 5 October 2009, which she calculated by reference to being informed by the NAB that the home loan payments were in arrears as at 5 October 2009 by $1,217.75 relating to the months of August and September 2009 and no payments for the personal loan had been made between May and 5 October 2009 which the respondent calculated as 21 payments at $210 per week, being $4,410.  The respondent requested a variation to the order dated 5 October 2009 which extended the time to enable her to purchase the house property and to recover from the applicant what the respondent characterised as the arrears on the loans to 5 October 2009.       

[27] On 8 June 2010 the applicant filed an application to have the order dated 5 October 2009 set aside pursuant to s 334 of the PLA.  That application and the respondent’s application for a variation of the order eventually came before Boddice J who made an order on 22 July 2010 noted as a “consent order,” set aside the orders made on 5 October 2009 and gave directions to enable the application by the applicant for a property adjustment order to proceed to a hearing.

[28] The parties returned to court on 23 August 2010 to obtain extensions of time in respect of the timetable that had been set for disclosure and the filing of further affidavits and for directions to facilitate the joint appointment of a valuer to value the chattels in the house.  The valuation was done by valuer Mr Ian Byron on 24 September 2010 and is accepted by both parties for the purpose of this proceeding.     

[29] The hearing of the applicant’s application for a property adjustment order took place on 28 and 29 March 2011.  Most of the evidence was in the form of affidavits.  Both the applicant and the respondent gave oral evidence.  Subsequent to the hearing the parties provided an agreed statement of their post separation contributions to the joint accounts and liabilities held by them which I will make exhibit 9.  As from 16 September 2008, the applicant had paid on account of the mortgages and personal loan (excluding redraw funds) the sum of $10,526.  As I have quarantined $20,000 of the withdrawal of $31,000 from the redraw account as the applicant’s compensation payment, the amount of redraw funds in excess of $11,000 that the applicant contributed to the loan repayments should be treated as his personal contribution.  I will therefore add $1,432 to his contribution, making a total of $11,958.  The total amount that was either paid into the joint account or used to make payments on account of the mortgages and personal loan by the respondent since 16 September 2008 has been $51,609.  Since October 2009 the total weekly amount spent by the respondent on loan repayments, house and car insurance and rates has been at the rate of $600 per week.      

Identification of the property pool

[30] The description of the parties’ property and its current values for the purpose of this application are:

Assets

Value

Regents Park house property

$360,000

Calais Holden

16,900

Furniture and contents

8,329

Coins bought during relationship

679

Jewellery purchased during relationship

1,005

Add backs

16,000

Total

$402,913

[31] From the value of the assets needs to be deducted the current balance of the two housing loans secured over the house property (which at the date of the hearing was $200,442) and the current balance of the loan for the purchase of the motor vehicle (which at the date of the hearing was $25,473).

What is a just and equitable adjustment of the parties’ property interests?

[32] Under s 286(1) of the PLA the court may make any order it considers just and equitable about the property of the parties, in order to adjust their interests.  Under s 286(2) of the PLA the court must, in deciding what is just and equitable, consider the matters mentioned in ss 291 to 295 of the PLA and, to the extent they are relevant, the matters mentioned in ss 297 to 309 of the PLA.

[33] The approach the court must take to the exercise of the discretion under s 286(1) of the PLA explained by Keane JA in FO v HAF [2007] 2 Qd R 138 at [51]-[52]:

“[51]It has frequently been emphasised that the judicial discretion conferred by s 286(1) of the PLA and its analogues in other statutes should not be constrained by pre-determined guidelines. It is essential, however, that the matters referred to in the provisions set out above be taken into account, and that they are ‘seen, in the reasons for judgment, to have been taken into account’. To this end, the four step approach explained by the Full Court of the Family Court in Hickey v Hickey provides a useful discipline to ensure clarity of thought and transparency of judicial reasons.

[52]The Full Court of the Family Court explained in Hickey v Hickey, in relation to the Family Law Act analogue of pt 19 of the PLA, that the first step in making a property adjustment order is the identification and valuation of the property, resources and liabilities of the parties. The second step is the identification and assessment of the contributions of the parties to their pool of assets and the determination of their contribution-based entitlements in accordance with s 291 to s 295 of the PLA. The third step is the identification and assessment of the factors in s 297 to s 309 of the PLA to determine the adjustment to the contribution-based entitlement. The fourth step in the process is consideration of the result of these earlier steps to determine whether that result is just and equitable in accordance with s 286 of the PLA.”

(footnotes omitted)

[34] In dealing with the second step, the assessment of the contributions of the parties to this pool of assets as at the date of separation can be summarised as follows:

Applicant

 

Term deposit and cash in bank

$85,181

Income contributed to the joint account during the relationship

130,658

Total

$215,839

Respondent

 

Income contributed to the joint account during the relationship

$85,500

[35] This is not a matter in which the parties made non-financial contributions to the property or their financial resources of a type which warrant being taken into account in the proceeding.  Both parties claim to have been primarily responsible for homemaker duties.  The reality of their situation was that during their short relationship both parties were in paid employment for substantial periods and made some contribution to the running of the household.  I am not satisfied that I can distinguish their contributions in a way that affects any adjustment of their property interests.  None of the matters referred to in ss 293 to 295 of the PLA are relevant. 

[36] The parties are of comparable age.  Although the applicant has residual disabilities from his army injury, because of his age and the short duration of his relationship with the respondent, this is not a matter that is relevant in deciding the adjustment of the parties’ property interests.  Despite the applicant’s disability, he has shown that he is able to obtain and remain in employment.  The respondent also has shown that she is able to obtain good paid employment.  The matters referred to in ss 299 to 304, 307 and 308 of the PLA are not relevant to determining this application. 

[37] The relatively short period of the parties’ relationship justifies giving  full weight to the respective financial contributions made by each party to the acquisition of their assets.  I accept that the respondent’s motivation and support assisted the applicant to obtain employment during the course of their relationship, after a lengthy period of unemployment before the relationship commenced. Their financial position benefited from the financial contribution that was made as a result of the applicant’s employment.  In the circumstances, however, I do not consider that the respondent’s emotional support makes any tangible difference to the adjustment of the property interests in the respondent’s favour. 

[38] The post-separation contributions of the parties to the loan repayments and expenses of the joint assets and the benefit obtained by the respondent in remaining in the home and using the car must be analysed to determine the extent they should affect the adjustment of the property interests.

[39] If the house property had been rented after separation, the applicant estimates that it was able to be rented at $330 per week.  The respondent’s estimate is similar at $320 per week.

[40] At the conclusion of the hearing, I asked for a summary of the post-separation financial contributions of the parties.  These had been described in various affidavits, but neither party had presented gross sums that assist in making a better comparison of actual contributions.  The applicant’s reason for not providing the breakdown of the post-separation contributions was explained by Ms Anderson of counsel (at Transcript 2-67):

“But your Honour there is an additional reason why in this case post separation contributions weren't analysed, and the reason is that with [the respondent] living in the home and paying solely for the expenses of them, that appears to be and (sic) equalisation - so she's making a contribution and she should get credit for that, but the credit that [the applicant] would get for not getting the rent would equal out.”  

[41] On any analysis the applicant’s financial contributions to the net asset pool, as at the date of separation, was greater than the respondent’s contribution.  That meant  notionally he should have been contributing at a greater rate to the outgoings in relation to the house property, subject to a compensating credit for the notional benefit that the respondent obtained in living in the house property rent-free.  With the home loan repayments being in the vicinity of $300 weekly and with the respondent meeting the amount of the rates and insurances on the house property of $75 weekly, that was in excess of a notional rent of $320 per week for the  property.  There was not equality between actual expenses and notional income or the applicant’s notional share of the actual expenses and the corresponding share of the notional income.  In contrast, it was fair that the respondent was largely responsible for the personal loan repayments that related to the car, because she had determined to keep and use it, although making those loan repayments also did preserve the applicant’s interest in the car. 

[42] The value of the net assets have remained relatively static since separation. There would have been a slight reduction in the balances of the loans, because of the respondent’s continued contributions to repaying those loans, since the hearing of this application.  In round terms, I will proceed on a basis that the net asset pool is $175,000. 

[43] Simply apportioning the net assets on the basis of financial contributions up to the date of separation would result in an apportionment around 70% in favour of the applicant and around 30% in favour of the respondent.  On the basis that the respondent kept the house and car (and without the complication of the parties’ post-separation conduct and uneven contributions), she would have to pay $122,500 to the applicant.  That made the applicant’s willingness to settle the proceeding on 5 October 2009 for a payment in his favour of $63,500 very generous.  That was acknowledged by the applicant in paragraph 83 of his affidavit filed on 30 August 2010 in which he stated:

“I agreed to the consent orders which would have amounted to my receiving a much smaller percentage of the asset pool than I have applied for originally because I wanted to resolve this matter and to disentangle myself from [the respondent].” 

[44] It is unfortunate that the respondent did not appreciate that the consent order made on 5 October 2009 was beneficial for her.  Instead she became overly focused on the very modest arrears into which the loans had fallen, as a result of the applicant’s failure to make further contributions to the loan payments and insurances as of 21 August 2009, even though the respondent had prior notice that the house and car were uninsured and the applicant was no longer contributing to the loan repayments. 

[45] Consistent with the obligations the respondent assumed under the consent order of meeting all loan repayments and outgoings on the property and car from 5 October 2009 which was also consistent with the respondent’s desire to retain both the house and the car, the respondent has made those payments since 5 October 2009 at a cost of about $600 per week, despite the setting aside of the consent order and the delay before the proceeding was heard.   The effect of that has been that the respondent has struggled financially in order to preserve the assets of which the applicant is claiming the major proportion.  That has resulted in frustration on the part of the respondent which no doubt can be said to be matched by the frustration on the part of the applicant in trying to achieve the resolution of this proceeding.                

[46] When the applicant filed his application that commenced this proceeding on 16 April 2009, he sought an adjustment of the parties’ property interests, so that he received 85% of their property.  The respondent in her affidavit filed on 13 July 2009 suggested that their contributions to their relationship were equal, which at the date of separation was an overstatement of the position.  I have already indicated that for the purpose of this proceeding the respondent has overvalued her encouragement and support of the applicant in relation to his army injury and his resumption of paid employment.  When the order made on 5 October 2009 was set aside and the matter was proceeding to a hearing, the applicant maintained his claim for 85% of the net assets on the basis of legal advice that was his entitlement.  In the submissions made at the hearing the applicant continued to seek 85% of the net assets, despite the fact that he has not been contributing to the loan repayments and rates and insurance for the house since 21 August 2009.  The applicant also seeks the sale of the house property to facilitate the payment to him of his share of the net assets.

[47] The respondent wishes, in effect, to preserve the settlement that was reflected in the consent order made on 5 October 2009, subject to further adjustments in her favour.  She considers that the lump sum that she should pay to the respondent in order to obtain sole title to the house property and the car is between $50,000 and $55,000, on the basis that there were arrears that she had not taken into account when she agreed to the consent order and she has made the loan repayments since 5 October 2009.

[48] In determining what property adjustment order is just and equitable in this proceeding, it is necessary, in addition to the actual financial contributions to the date of separation, to accommodate: 

(a)the additional interest charged on the variable home loan, as a result of the withdrawal of the sum  of $11,000 from the redraw account by the applicant on 10 February 2009;

(b)the post-separation contribution of the applicant to the loan repayments and  joint expenses was $11,958;

(c)the post-separation contribution of the respondent to the loan repayments  and joint expenses was $51,609 together with contributions for an additional two months since the hearing;

(d)the personal loan obtained to purchase the car had a balance at the date of  separation that was greater than the value of the car, but the respondent elected to keep and use the car for her employment;

(e)the delays in complying with the consent order of 5 October 2009 and therefore in finalising this proceeding were attributable to the state of the loan accounts for which both parties must bear responsibility;

(f)the difficulty for the respondent in continuing to bear the full expenses of the house property after the consent order of 5 October 2009 was set aside; 

(g)the respondent has occupied the house property rent free since separation.

[49] A consideration of these matters supports the conclusion that the post-separation events means that the adjustment of the property interests has to result in a lesser proportion in favour of the applicant, that it would have done had the adjustment taken place closer to the date of separation.  The overriding consideration is what is just and equitable and that is not capable of precise mathematical calculation.  Taking a global approach, I have concluded that it is just and equitable to adjust the property interests of the parties, so that the applicant’s share is 60% of the net asset pool and the respondent’s share is 40%.    

Conclusion

[50] Because of the history of the dealings between the parties and the desire of the respondent to retain the ownership of the house property and the car which has affected the course of this proceeding, I am inclined to make orders that permit the transfer of the applicant’s interests in the assets identified in the asset pool to the respondent, if she were able to obtain the finance that would allow her to make the lump sum payment to the applicant of the sum of $105,000 (60% of the net assets valued at $175,000) within 30 days of the publication of these reasons.  I will therefore give the parties the opportunity to consider these reasons and make further submissions on whether I should give that opportunity.  If that is not feasible, I will order the sale of the house property forthwith to facilitate the repayment of the NAB loans and for the balance of the net sale proceeds and the other assets to be divided between the applicant and the respondent in the shares of 60% and 40% respectively.

[51] I also propose to direct that the loan repayments and rates and insurance for the house be paid by the applicant and respondent in the shares of 60% and 40% respectively from 10 June 2011 until the transfer of the applicant’s interest in the house to the respondent or the sale of the house, that the respondent be liable for the personal loan repayments until the transfer of the applicant’s interest in the car to the respondent or the sale of the car, and that the respondent pay rent to the applicant of $190 per week for the house from 10 June 2011 while she continues to reside in the house property until the transfer of the applicant’s interest in the house property to the respondent or the sale of the house property.           

[52] The applicant foreshadowed seeking an order pursuant to s 341 of the Act that the respondent pay his costs of the proceeding from 5 October 2009 on an indemnity basis.  It is not appropriate to deal with the issue of costs, in the absence of submissions from the parties made in the light of these reasons.  Some of the observations that I have made in the course of these reasons should assist in addressing the issue of costs.  The applicant’s maintaining a claim to 85% of the net assets, when he had not contributed to the expenses of the joint assets after 5 October 2009 is a factor that weighs against the exercise of the discretion to award costs in the applicant’s favour. 

[53] I will therefore adjourn the proceeding to a date to be fixed that is convenient to the parties to enable submissions to be made on the form of the orders and the costs of the proceeding.

Close

Editorial Notes

  • Published Case Name:

    MAD v HTM

  • Shortened Case Name:

    MAD v HTM

  • MNC:

    [2011] QSC 159

  • Court:

    QSC

  • Judge(s):

    Mullins J

  • Date:

    10 Jun 2011

Litigation History

No Litigation History

Appeal Status

No Status