85/15 Split of Matrimonial Property Found to be Just and Equitable

In Wicks and Millington [2016] FCCA 2107, the proceedings regarded the alteration of interests in property that was borne out of a lottery win. The Applicant Mr Wicks was aged 59 and the Respondent, Ms Millington, 49 years old (the “Parties”). The Parties commenced cohabitation in 1994 and married later in 2001. The relationship lasted approximately eight (8) years, with the Parties separating on 10 September 2002.

The exact separation date was not clear in this case with the Parties separating on at least two occasions between 1994 and 2002, with the Respondent giving evidence that the Parties only lived together for under 18 months across the relationship.

The Parties had two children together, X born in 1995 and Y, born in 2002 (the “Children”). The Respondent wife had a child from a previous relationship, Ms L, born in 1991. Ms L, following care proceedings, initially lived with the Respondent.

Property Contributions

In 1993, the Respondent received the share of a lottery prize totaling $423,741.65  with her friend, Mr H. Mr H and the Respondent bought a property in 1993 (“Property R”), for which she later paid out Mr H, and sold to receive net proceeds totaling $207,913.00.

In April 1996, the Applicant husband purchased a property (“Property G”) for $124,500.00 leaving a balance of $82,413.00. Property G was the one asset shared between the Parties.

The Applicant’s Proposal

The Applicant sought the following Orders:

  1. That the Applicant pay to the Respondent the sum of $200,000.00 within 42 days;
  2. That contemporaneously with the above payment, the Respondent transfer her right, title and interest in Property G to the Applicant;
  3. That the Applicant indemnify from transfer and into the future, the Respondent in relation to Property G; and
  4. That unless otherwise specified in the Orders:

4.1 Each of the Parties be solely entitled to those chattels and property in the possession of that respective Party whose name appears on the bank records or other policies thereof, to the exclusion of the other Party with superannuation deemed in the possession of the person named as the worker entitled to that said superannuation.

4.2 That each Party be solely liable for and indemnify the other Party against any liability encumbering any property for which that party is entitled under the Orders.

The Respondent, rather, sought that the Application be dismissed, submitting that the Applicant had claim to no more than ten (10) per cent of the net value of the asset pool. The Respondent submitted that the Applicant, rather, should receive fifteen (15) per cent of interest in the property.

Evidence

In evidence, the Respondent wife did not undergo cross examination as she was under the care of the Adult Guardian from 4 July 2013 pursuant to Section 16(1)(s) of the NSW Trustee and Guardian Act 2009.

Judge Middleton placed some weight, however, on the affidavit proffered by the Respondent after some consideration of Rule 15,29A of the Federal Circuit Court Rules.

In cross examination, the Applicant’s evidence was confused and contradictory regarding dates in which he resided with the Respondent and his contributions to Property G.

Property G was purchased on 16 April 1996. The Applicant’s affidavit evinced that he was asked to leave the property in that same year. The Respondent’s evidence was that the Applicant lived in Property G for approximately six (6) months.

His Honour found the evidence of the Respondent’s affidavit material was more reliable than the contradictory evidence of the Applicant father in relation to the length of time the Applicant lived in the property, accepting that he may have lived with the Respondent for only a period of four (4) years on and off throughout the eight (8) year relationship.

Analysis of Legal Issues

In his determination of the division of property, his Honour expressed his obligation, pursuant to section 79(2) of the Family Law Act 1975 (Cth) (the “Act”), to ensure a just and equitable outcome for the Parties.

  1. First, the judge examined the existing legal and equitable interests of the parties in the property. Here, he found one identifiable asset of the relationship—Property G that was under the Respondent’s sole name at an agreed value of $370,000.00.
  1. Second, the judge considered whether it would be just and equitable to make an alteration to the interests. Ultimately, given the period of between three and four years where the Applicant made some contributions of a financial and non-financial nature to the relationship, the Court was satisfied that it was just and equitable to make such an Order.
  1. Third, his Honour considered the Applicant’s contributions to the asset pool pursuant to Section 79(4) of the Act. He found that while the Applicant did undertake work on Property R, that he was reimbursed for his expenses and paid for his labour to some extent and further, was not in a “marriage like relationship” with the Respondent at the time. Justice Middleton understood the initial contribution in the matter rested in the equity vested in Property R. This contribution increased before the beginning of the Parties’ relationship and increased again after she bought the share from her friend Mr H. And that it was, in fact, the proceeds of the sale of Property R that were used to purchase Property G. His Honour, therefore, accepted that “significant weight” be given to this initial contribution of the Respondent and that the Respondent had made far greater initial financial contributions.
  1. Fourth, Justice Middleton considered the financial contributions and welfare provided during the relationship. At best, his Honour found that the Applicant paid three monthly mortgage payments in or about 1995. The Federal Circuit Court (“the Court”) accepted that the Applicant supported the Respondent in regaining care of Ms L and providing care to the Children including Ms L following separation.

 

  1. Fifth, the post-separation contributions were considered. Namely, that the Applicant made modest payments regarding Property G rates between January 2012 and March 2013. However, his Honour also noted that the Applicant’s evidence sought to exaggerate his own contributions and diminish those of the Respondent.

 

X began residing with the Applicant in 2007 and Y in 2009. It was uncontested that the Applicant continued to make contributions for the welfare of the Children as the Respondent did not have capacity as she was under the care of the Adult Guardian. The judge considered the Applicant’s drug addiction to marijuana and his cultivation of marijuana plants in the late 2000’s as problematic for the Applicant’s case. The Court accepted that pursuant to Section 79(4)(c) of the Act he would not give significant weight to the Applicant’s contributions and thus discounted them. The Court determined that an overall contribution of 95/5 in favour of the Respondent was found.

 

  1. Finally, Justice Middleton outlined the Parties current earning and future earning potential alongside the Parties health and the requirements  that these health issues would financially have. His Honour determined that the Applicant could work at times to supplement his government benefits while the Respondent could not due to her health nor care for the Children. It was necessary to consider protecting the Applicant who was to continue with parenting duties. Therefore, it was deemed appropriate to make some adjustment under Section 75(2) of the Act to support him in the care of Y until Y was to reach 18 (with Y and Ms L both over 18 at present).

Orders and Conclusion

Justice Middleton, therefore found that the overall ratio was to be adjusted in the Applicant’s favour with a division of assets as at 85/15 in favour of the Respondent.

The judge ordered that:

  1. The Applicant receive $55,500.00 .
  2. The Respondent retain Property G, or 85 per cent of the net proceeds should she be unable to retain the property.

Leave a Reply