11. Property PDF

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Property THE SCENARIO Lleyton and Bec married in 2001 and did not live together prior to marriage. When they married, Lleyton was 30 years old and Bec was 24 years old. The couple separated on 4 August 2018 and their divorce became final on 30 August 2020. Lleyton is now 49 years old and Bec is 43 years old. There are 3 children of the marriage Jack (15), Jenny (12) and Jane (7). Bec has remained living in the home with Jenny and Jane and Lleyton and Jack have moved to a rented unit. When Lleyton and Bec commenced their relationship Lleyton already owned a house in Paddington registered in his sole name valued at that time at $250,000 (with a mortgage registered in his sole name of $200,000), a motor vehicle valued at $8,000 and some furniture of little value. Lleyton is an only child and his parents had contributed the $50,000 deposit for this house. Bec had no assets of any value. This house at Paddington became Bec and Lleyton’s family home. Lleyton has worked full-time during the marriage as an electrician and usually finished work early in the afternoon so he could collect the children from school. During the week he would help the children with their homework, take them to after school activities and cook dinner. Lleyton is now on an annual salary of $100,000 and is a member of the company’s accumulation fund superannuation scheme. His latest member statement values his interest at $300,000. Bec has worked full-time during the marriage as an architect. She had 6 months maternity leave after the birth of each child. She would drop the children to school in the mornings but would often work long hours. She helped more with the children in the early mornings during the week and on weekends. Bec would cook family meals on weekends and she attended to the washing. The family hired a cleaner. Bec now earns $150,000 a year. Bec has superannuation in an accumulation fund and her latest member statement values her interest at $400,000. In 2015 Bec won $150,000 by purchasing a Lotto ticket in her sole name. The money was placed in the couple’s joint account and all of it was used as a deposit to purchase a new family home in Bardon for $550,000. This home was registered in joint names. The couple had to take out a substantial mortgage of $400,000, also in joint names. They rented out the house at Paddington that Lleyton had brought into the marriage. This rental money went into the couple’s joint bank account. Over the years the couple have improved the new home in Bardon, sometimes increasing the mortgage over the house for this purpose. Lleyton organised the installation of a swimming pool and landscaping. Although he engaged contractors from time to time, he also did much of the physical landscaping and work himself. Bec has concentrated on the interior, arranging for the house to be repainted, selecting the fittings and furniture, and designing and overseeing the building of an extension which was built in 2018. A recent market appraisal of the home at Bardon has come in at $1,100,000. There is still $200,000 owing on the mortgage. The house at Paddington has remained registered in Lleyton’s sole name. It is now valued at $1,500,000 and has a mortgage in his name of $400,000. It is rented for $950 a week and this rent goes into a bank account in joint names. Lleyton has a Ute motor vehicle valued at $30,000 and Bec has a Hyundai van valued at $10,000. The couple have a joint account with $50,000 and a credit card debt of $6,500. The couple also have shares held in joint names valued at $100,000. Bec and Lleyton have agreed that neither needs any child support from the other. Lleyton’s mother passed away two years ago and left her estate to Lleyton’s father. Lleyton’s father Tom is 75, and slowing down physically, but is very healthy. Bec tells you that he is quite wealthy, and she thinks that Lleyton will inherit everything from his father when he dies. Bec has come to your office for an initial appointment today. QUESTION: Advise Bec:

What preliminary steps she would need to take to attempt to finalise her financial relationship with Lleyton prior to commencing any court proceedings; 2. What the property pool would be and how you would set this out in the form of a schedule of assets and liabilities; 3. How a court may approach the determination of a property dispute between Bec and Lleyton. You will need to include the steps the court will follow, including the parties’ percentage entitlements and what court order may be appropriate. 1.

1. (WILL BE HEARD IN FEDERAL CIRCUIT COURT) a. s12E Marriage, Families and Separation brochure

b. S44 (3) FLA - Time limits (need to file prior to 12 months after divorce is finalised) Leave of the Court is required to make an application after the limitation period expires s44(4). c. Pre-filing dispute resolution – need to attempt resolution before filing in court (look at L3 – property section) – REMEMBER S60(I) IS NOT RELEVANT FOR FINANCIAL – HOWEVER BEST PRACTICE FOR FEDERAL CIRCUIT COURT – JUST NEGOTIATING SATISFIES THE REQUIREMENTS d. Duty of full and frank disclosure – in court? 2. Refer to excel spreadsheet 3. Slides 8-10 tute a. 5 step process (T11 s14) i. Step 1 - Section 79(1) - court may make such order as it considers appropriate; 1. (refer to assets/liabilities table) a. (types of property on T11 s16) b. Future inheritance (s75 (2) (o) – White & Tulloch v White ii. Step 2 – Section 79(2) - court not to make an order unless just and equitable to do so; 1. looking at what the parties have at the moment; make a property determination – yes – it is just equitable to make an order (JUST SAY THIS IN THE EXAM) iii. Step 3 – Section 79(4)(a)-(c) - court to assess both financial, non-financial contributions and homemaker/ parent contributions of the parties retrospective; 1. contributions (financial/non-financial/home-maker parent) - looking back at the past & what happened during the relationship when the parties were living together – s79(4)(a-c) a. financial – earning income (putting towards mortgage), feeding children, paying bills i. both parties have been working most of the time 1. No starting point of equal sharing (Mallet v Mallet) 2. LLyton bought property into the marriage – long-term marriage means that the weight attached diminishes as both have contributed to the property (Pierce 1998); they lived in the property for a period of time & Bec could argue that her income assisted in costs of property maintenance 3. Note: if it was a shorter relationship – apply the Bremner 1994 which enlivens the erosion principle 4. Gift - $50,000 from Llyeton’s parents (marriage of Gosper 1987) – was a long time ago

5. Given prior to marriage 6. Lottery win – since the winnings were placed into a joint account & used towards a house purchase, it will be considered a joint financial contribution (Zyk 1997; Eufrosin 2014; Elford 2016) b. non-financial – Lleyton did landscaping, Bec did decorating & designed an extension c. home-maker parent – both made contributions: i. Llyton: picked children up from school; helped with homework during the week ii. Bec: taking children to school; providing care in mornings & weekends 2. Likely a 50/50 contribution iv. Step 4 – Section 79(4)(d)-(g) - mainly prospective factors; 1. in regards to future needs s75(2) & s79(4)(d-g) 2. Age, state of health, earning capacity, parenting orders (caring for young children) etc. s75(2) below: a. Age – Llyeton is 6 years older but on the facts appears in good health b. Both are gainfully employed; however, Llyton has less income c. Consider the costs of the division of which child is living with which parent – Bec would need longer support as she has younger children & has both; however has Lleyton has earns less – d. No commitments to other parties (new partners) e. ** there could be a slight % adjustment either way (look at adjustments on t11 s41) – make sure I give a % adjustment i. CHECK OUT SLIDE 45!!!!!! v. Step 5 - Section 79(4)(e) – imports s75(2) future needs factors. 1. different to step 2 (still just/equitable) – once division of property has been established (i.e. 50/50 or 60/40 etc.) – look at how that can be divided in (i.e. property sold etc.) in a way that is just/equitable – is the proposed order fair to the parties 2. . b. SuPER i. SUPER TO BE LISTED SEPARATELY FROM OTHER PROPERTY (T11 S50) ii. DO 5 STEP PROCESS iii. KEEP IN MIND AGES OF WHEN MARRIED ETC. – ONE PARTY MAY HAVE BEEN CONTRIBUTING TO SUPER FOR YEARS PRIOR TO MARRIAGE – THIS MAY BE TAKEN INTO ACCOUNT...