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MAP v AK [2014] FJMC 192; File No 10-SUV-0166 (8 August 2014)

IN THE FAMILY DIVISION OF THE MAGISTRATE’S COURT AT SUVA


FILE NO.: ACTION NO. 10/SUV/0166


BETWEEN:

MAP

Applicant


AND

AK

Respondent


APPEARANCES/REPRESENTATIONS

The Applicant: Mr. Fesaitu M. (Legal Aid Commission)
Respondent: Ms. Naidu R. (Shoran & Co.)
___________________________________________________________________________


JUDGMENT


Introduction


  1. This is a matter where the Applicant lady filed an application for final orders for distribution of the property (of the parties to a marriage).
  2. The application was filed by the applicant lady on the 31st December 2010. The respondent man filed Form 10. Both have filed Form 19- financial statements. Thereafter the parties were referred to the Deputy Registrar for completion of preliminaries, which required under the Family Law Act 2003. Case record indicates both have filed bundle of documents as well. Both parties filed their respective evidence in chief by a way of affidavits.

The Background


  1. The parties were married on the 15th March 1997. The conditional dissolution of marriage was granted on the 12th of April 2010.
  2. The property was bought on 3rd September 2008 and parties separated in October 2009.
  3. The parties have 02 children namely; SSK a female born on 14th December 1999 and TAK a female born on 14th July 2002.
  4. The respondent was ordered to pay child maintenance at $150.00 per fortnight by the court order (by consent) on the 25th October 2012.

The Issues


  1. The following issues to be determined by the Court:-

The Evidence


  1. The evidence of the applicant and respondent were derived from their respective applications, affidavits and documents. Both the parties were opted and consented to rely on their affidavits evidence in chief and documents.
  2. The applicant wife submits that she was married to AK, the Respondent, but divorced on the 12th day of April, 2010.
  3. Further, the applicant submits that, she played a primary role of a supporting wife, spending much of her hours in cooking, cleaning, ironing, washing clothes and keeping of the home to make it a conducive environment for the family. After their marriage; they lived at lot 00 Pritam Singh Road, Narere for a period of 3 months, she stayed home as a housewife whilst the Respondent man worked.
  4. When she and the Respondent moved to live in Nadi, she continued her role as a supporting wife and a mother to their two children. She stayed home taking full responsibility in caring for their children and devoted much of her time to the wellbeing of the children looking after the children whist the Respondent man worked.
  5. She further stated that; there was never any assistance in the form of a house maid or a baby sitter to care for the children or to assist with house chores during their stay in Nadi. She played both roles as “caring for the children and doing the house chores duties.” If I quote her own words.
  6. Furthermore, wife submitted that at the time of separation the Applicant continued to “play the role of caring for their children” whilst the Respondent who did not live with them. She contributed to the welfare of the family as a homemaker and a parent during the time of marriage.
  7. The Respondent filed Form 10 seeking that the application by the Applicant be dismissed. The Respondent submits that the parties were married on the 15th March 1997 and divorced on 12th April 2010.
  8. The Respondents evidence can be summarized as follows;
  9. The Respond further submits that in April 1999, he was transferred to Nadi, and they stayed there in the Government Quarters (FRCA). They stayed there until the separation on 12th October 2009.
  10. The Respond further submits that the Applicant after marriage stayed home to look after their two young children. She was not forced to do this. The respondent always took care of their expenses. The applicant on the other hand never showed any desire to work and continued to stay home even till to date.
  11. He did not own any property prior to his marriage.
  12. The said Property (Sub Lease No. 227808) was bought by his father in 1985.
  13. In 2008 applicant husband’s father started experiencing financial constraints as he (husband’s father) was no longer working. Their family house situated on Lot 00 DP 5667 Housing Authority Sub Lease No. 227808 was on the brink of being sold in a Mortgagee Sale by the Housing Authority.
  14. In order to avoid the Mortgagee sale husband purchased the property for $55,000.00 in 2008, though the real value was $93,000.00 as per the valuation done by Housing Authority.
  15. That in 2010 he took a personal loan from Housing Authority to give his father to extend the house and to be rented out to derive income to support his family. After receiving the money husband’s father built another flat (Flat No. 4) which consists of 2 bedrooms, sitting room, kitchen, toilet/bathroom and laundry. From this income he was taking care of his everyday needs and also educating husband’s younger sister who was in high school.
  16. The Respondent submits that that after the demise of husband’s father, the property is still rented out. The property was bought on 3rd September 2008 and parties separated in October 2009. The Applicant has not contributed in any way towards the said house.
  17. The husband confirms that he has re-married on the 29th of August 2011 and now living in Australia with his second wife who is supporting him financially. The rental monies derived from the home goes towards the mortgage payments of the house. Since he is in Australia now, he has a caretaker who looks after the said property, makes all repayments, including rates, his current child maintenance payments and all other incidentals.
  18. The Court ordered valuation for the house and as of 15th May 2013 is in the sum of $170,000.00.
  19. The total monthly rental derived from the property is in the sum of $1,170.00 while husband’s monthly repayment with Housing Authority is in the sum of $430.00. As at 13th August 2013 he owes $38,654.03 to Housing Authority for the purchase that he did earlier on with an interest rate of 7.5%. That he further took an additional loan on the house in 2010 and there was a variation to the mortgage and he is currently paying $150.00 per month towards that mortgage to Housing Authority and as at 13th August 2013 he owes $9,827.67 to Housing Authority with an interest rate of 7.99%.
  20. He also submits that after 12 months of purchasing the house the Applicant and he separated and further submits that there was no form of contribution by the Applicant in any manner towards the purchase of the property because she was still living with him and he was maintaining her and their two children.
  21. Respondent also submits that the property was occupied by his father and his younger sister and he did not had any financial gain from the said house, but since the demise of his father all rental monies collected are used towards paying off for the mortgage as well as paying for the child maintenance.
  22. Furthermore, the Respondent submits and seeks that there be no distribution orders for the said property as the Applicant has not contributed anything towards it and neither has he made any financial gain from the same. And it is being used to maintain their two children as well.

The Determinations and Law;


  1. The Pool of Assets of asset need to be decided first. Following were identified as pool of assets.
    1. Residential property at Lot 00 DP 5667 Housing Authority Sub Lease No. 227808.
  2. The outcomes must only have been able to be predicted by reference to case law. The new Act provides much more guidance – in particular this can be found in section 162 of the Act.
  3. In KN v. MYH – Fiji Family High Court Case No. 08/Ba/0043, in which Her ladyship Justice Anjala Wati had held the following:- I wish to quote;

“In Australia, the Courts have identified a four-step process in working through every property case. Although this four-step process is not mandated by the words of the Act, the process is entirely consistent with the scheme of the Act and it provides a very useful structure for the Magistrate hearing the case.


I will begin by very briefly running these four steps. I will then discuss them in a little more detail.


(i). identify and value the assets and liabilities of the parties;
(ii). assess the parties’ contributions to the assets;
(iii). assess a range of factors set out mainly in s 162(3) of the Act; and
(iv). Consider whether the order proposed after consideration of all those factors is – to use the word employed in the Act – “appropriate”.

Although the four-step provides a framework in which to work through a disputed property case – the four steps do not actually provide an entirely predictable answer to the way in which the property is to be divided.


Each step is not done as a separate little Court hearing and the Magistrate does not announce his or her decision at the end of each of the four steps along the way. The four steps are all happening together in the one trial – and it is only when the Magistrate makes the final decision that you will see the four steps laid out and findings made in relation to each step.


Step One: Identify and value the assets and liabilities of the parties:


The first step of the four-step process is to identify all the assets. This information about the assets and liabilities is then included in the statement of financial circumstances – which is the Form 19 in the Fiji Family Law Rules. Each party includes in the Form 19 the assets they own or in which they have an interest – no the assets of the other party.


There are two other very important things to note about property in Fiji.


Section 166 goes on to state expressly that the Family Law Act does not authorize a Court to make an order alienating native land or any interest in it.


So at Step One of the four-step process, the Court would not include inalienable property in the pool of assets available for division or transfer. This does not mean, however, that an interest in property that is inalienable in irrelevant. On the contrary it is highly relevant, for reasons I will mention in a moment.


Because inalienable property is relevant, the lawyer preparing an application for property settlement would ascertain from the client whether either party to the marriage has any interest in such property. In fact, the client must disclose such interests in their statement of financial circumstances.


Interestingly, the client who has an interest in an item of property that is inalienable must give an estimate of the value of such an interest. This is a difficult concept. If the interest in the property is inalienable, how do you put a value on it?


Step Two: Assess the parties’ contribution to the assets:


The second step is to identify the contributions each party made during the marriage.


For convenience, I will refer to contributions to the acquisition of assets. However, it is important to note that the Act says the Court must not only assess contributions towards the acquisition of assets but also contributions made towards the conservation and improvement of the assets.


It is also important to keep in mind that the Act says the Court has to consider contributions not only to the property the couple own at the time of the hearing, but also any property they previously owned. Thus contributions made to property owned earlier in the marriage, but since sold, are just as important as contributions to the assets they have now.


S. 162 give a good idea of the evidence that is needed to be adduced. The court must ask the lawyers to break the evidence into the categories identified in s 162 – not only does that help the Court, but it makes sure lawyers do not overlook important contributions.


Subparagraph (a) of s 162(1)


The first category of contributions is financial contributions – this is clearly a very important type of contribution, but by no means the most important.


Often especially in a short marriage, the most important financial contributions is the contribution of assets one party makes at the commencement of the relationship.


These assets should all be identified carefully and some estimate placed on their value at the time of the marriage.


Another type of financial contribution is income earned during the marriage. Some of this income will have been used to acquire, maintain or improve assets.


One will note from the words of s 162(1) itself that the financial contribution can either be direct or indirect:-


- a direct contribution would be paying for the asset in question;

- an indirect financial contribution could, for example, be paying for day-to-day living expenses, thereby freeing up the income of the other party to pay for the asset.


Another category of financial contribution would be financial assistance provided by relatives, which is usually considered as having been a contribution made by the party to the marriage whose relative provided the help.


Subparagraph (b) of s 162(1)


The second category of contribution identified by the Act is direct or indirect contributions other than financial contributions. This could include building the house with one’s own hands, making a garden, painting walls, making curtains and likewise.


Subparagraph (c) of s 162(1)


The third category of contributions is a very important one and that is the contribution made to the welfare of the family, which includes contributions as homemaker and parent. These contributions are not directed towards any specific item of property. These contributions are referred to in the Act to ensure the Court places appropriate weight on domestic work, so that the focus of the exercise is not just on financial contributions.


So just to recap, there are three sorts of contributions that must be assessed at Step Two of the Four Step process:-


• financial contributions to property;

• non-financial contributions to property; and

• contributions to the welfare of the family.


The Act does not suggest that one of these types of contributions is any more important than any other contribution. It is up to the Court to assess the respective value of each type of contribution. For what it is worth, Australian courts usually treat domestic contributions as being of similar value to contributions of income – so a wife who stays home and looks after the family is considered to be making an equivalent contribution to the husband who is earning the wages.


This brings me to one section of our Act which is of immense significance. This is a 162(2) and it is a provision on presumption. It reads as follows:-


“For the purpose of subsection (1) the contribution of the parties to a marriage is presumed to be equal, but the presumption may be rebutted if a court considers a finding of equal contribution is on the facts of the case repugnant to justice, (for example as a marriage of short duration).”


What does this mean? What it clearly means is that in Fiji on is going to be able to avoid most of the time consuming and costly legal arguments about the value of domestic work compared with the value of income earning activity. I doubt that anyone could reasonably suggest it is “repugnant to justice” to treat the contributions of the woman who stays at home and looks after the house and children as being of equal value to the contributions of the husband who works.


Not only does section 162(2) help avoid such arguments, but it will also avoid arguments about the assessment of contributions in cases where one party might think they have made slightly greater contribution than the other party, but the difference is not worth litigating about. So, for example, it might not be seen as “repugnant to justice” to say that after a marriage of some years, contributions should be assessed as equal, even if one party brought in say $5,000 or $10,000 more than the other party many years ago.


However, a finding of equality of contribution would almost certainly “repugnant to justice” if, say, the wife brought into the marriage a house worth $250,000 and two weeks, or even two years later the marriage collapsed. It would not in any way be just to suggest the value of the husband’s contribution was equivalent to the value of the wife’s.


Where is the Court going to draw the line on the “repugnant to justice” issue. The only guidance in the Act is the one specific example mentioned in the section itself – i.e. the short marriage. But this is only an example – there will probably be other circumstances in which a presumption of equality of contribution could be repugnant to justice.


As an example, in one case a Magistrate decided a finding of equality of contributions would be repugnant to justice and instead found the contributions should have been assessed as made 80% by the wife and 20% by the husband. This might have been warranted, for example, because the wife brought in the house worth $250,000 at the start of what ended up being a 2-year marriage.


If the property settlement process stopped there, the assets would be divided 80% to the wife and 20% to the husband.


Step Three: Assess a range of factors set out mainly in s 162(3) of the Act:


Under the Fiji Family Law Act the process does not stop after the assessment of contributions. The reason for this is the Act says there are other things that need to be taken into account as well as contributions. These factors are all to be found in s 162.


The first place to look is in subparagraph 162(1) (d). This relates to pensions and superannuation.


The rest of the matters to be taken into account at this third step of the process are set out in s 162(3), which provides that the Court must also take into account:-


(a) the age and state of health of the parties;
(b) the income, property and financial resources, including any interest in inalienable property, of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c) whether either party has the care and control of a child of the marriage who has not attained the age of 18 years;
(d) the commitments of each of the parties that are necessary enable the party to support –
(e) a standard of living that in all the circumstances is reasonable;
(f) the financial resources available to a person if cohabiting with another person;
(g) the duration of the marriage;
(h) the terms of any order for spousal or child maintenance made in favour of or against a party;
(i) any other fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.”

S. 162(3) factors are not looking at things that have happened in the past in the way we do when assessing contributions. Instead we are looking to the future. I like referring these factors as “future needs” factors.


Once again, although the Act lays down in section 162(3) the matters the Court has to take into account, it does not say how the Court is to take them into account.


The size of the adjustment is entirely discretionary, but the Magistrate must exercise the discretion by reference to the section 162(3) factors.


Third Step to take into account adequately all those things mentioned above, especially the need to accommodate children.


Having an interest in inalienable property such as native land might make a big difference to the outcome if that interest, for example, provides accommodation for one party to the marriage.


Step Four: Consider whether the order proposed order is “appropriate”:


What is left to do? The Fourth Step concentrates on the overriding requirement of s 161, which says the Court can make such property settlement order as it considers appropriate.


Although there is not much meant in this Fourth Step, it is always a good thing to stand back and look at the overall result after the court has assessed the contributions at Step Two and made any adjustment called for at Step Three. Really, the Fourth Step is just a last check to make sure the court has not lost sight of the wood for the trees as it goes along the three earlier steps of the process.”


Alteration of property interests


  1. 161.-(1) In proceedings with respect to the property of the parties to a marriage or either of them, the court may make such order as it considers appropriate altering the interests of the parties in the property, including-
  2. (6) The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

Factors to be taken into account


  1. 162.-(1) In considering what order (if any) should be made under section 161 in proceedings with respect to any property of the parties to a marriage or either of them, the court must take into account-

(2) For the purposes of subsection (1) the contribution of the parties to a marriage is presumed to be equal, but the presumption may be rebutted if a court considers a finding of equal contribution is on the facts of the case repugnant to justice, (for example as a marriage of short duration.)

(3) The court must also take into account-


(a) the age and state of health of the parties;

(b) the income, property and financial resources, including any interest in inalienable property, of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

(c) whether either party has the care and control of a child of the marriage who has not attained the age of 18 years;

(d) the commitments of each of the parties that are necessary to enable the party to support-

(e) a standard of living that in all circumstances is reasonable;

(f) the financial resources available to a person if cohabiting with another person;

(g) the duration of the marriage;

(h) the terms of any order for spousal or child maintenance made in favor of or against a party;

(i) any other fact or circumstances which, in the opinion of the court, the justice of the case requires to be taken into account.
  1. As discuss above, section 162(1) set out in sub-sections (a), (b), (c) and (d) the fourfold contributions the court must take into account, in making an order with respect to "any property of the parties to a marriage". Sub-section (a) provides that a financial contribution made directly or indirectly to the acquisition, conservation or improvement of the property is to be taken in into account. Sub-section (b), the non-financial contribution to the improvement of the property. The contribution made to the welfare of the family has to be considered by sub-section (c). This is an elusive concept with wide import. Finally, sub-sections (d) require the eligibility of either party for a pension, allowance or benefit under any superannuation fund to be considered.
  2. Her ladyship Justice Anjala Wati's elucidation on section 162(1) is instructive. In KN v MYH, (08/BA 0043), her ladyship stated that it "is not suggest (ed) that one of these types of contributions is any more important than any other contribution. It is up to the Court to assess the respective value of each type of contribution."
  3. The court is mindful about the fact that the property was bought on 3rd September 2008 and after one year of the acquisition parties separated in October 2009. The dissolution of marriage was granted on the 12th of April 2010. Therefore, it is clear that the applicant has not contributed in any way towards the said house after the separation. In other words, non-financial contributions to property; and contributions to the welfare of the family by the applicant was limited to almost one year after the acquiring the matrimonial property. The husband submitted that he has re-married on the 29th of August 2011.
  4. The court also noted that the said Property was bought by husband’s father in 1985. In 2008 the property was on the brink of being sold in a Mortgagee Sale by the Housing Authority. In order to avoid the Mortgagee sale husband purchased the property for $55,000.00 in 2008. The Respondent in 2010 he further obtained a personal loan from Housing Authority to extend the house and to be rented out to derive income to support his extended family.
  5. The provisions of section 162(2) make it clear that there is presumption that the interest shall be for equal shares unless such a finding is repugnant to justice as a marriage considering duration of the marriage.
  6. The wife did not make direct or indirect financial contributions but contributed for the welfare of the family as a homemaker parent and contribution as a homemaker parent during the marriage. She also admits the same in her F23 dated 01-08-14 (7th paragraph).
  7. Considering the above discussed facts and the existing fact of duration of the marriage (13 years) I am of the view that the presumption of equal contribution under s. 162(2) of the Family Law Act No. 18 of 2003 did not apply and rebutted itself. So a half share would not be in the interest of justice.
  8. The final stage under section 162(3) is to take into account the factors enumerated therein, which has been aptly termed "future needs" by Justice Wati in KN v MYH (supra). As so far as relevant to the present case, these are as follows:
  9. any other fact or circumstances which, in the opinion of the court, the justice of the case requires to be considered.(emphasis added)
  10. Accordingly, the wife is aged 37 years and the husband is aged 38 years. Neither party suffering from any major medical conditions. The wife submitted that she was unemployed throughout the marriage. It is not known to the court what her qualifications are.
  11. The husband submitted that he did not have a comfortable married life with the wife given her conduct. I wish to refer to paragraphs 5,-11 of affidavit dated 23-08-2013 by the husband which was not challenge by the wife.
  12. The court also wishes to highlight above paragraphs 38 and 39.They lived in matrimonial home for almost 01 year only.
  13. The court also notes that the property also derive income from rental money and the husband submitted that as he is a dependent of his current partner he uses that income for the maintenance payments of the children of the marriage between him and the applicant. The husband also has commitments to support himself, the children of the marriage and his current partner. The wife receives $150.00 a fortnight as child maintenance from the husband. It is appears that she does not has commitments other than support herself.
  14. Neither party adduced evidence in relation t their standard of living and weekly expenditure. And also about the financial resources of to a person if cohabiting with another person. As mentioned earlier the duration of the marriage was 13 years.
  15. In this case only pool of asset can be ascertained is matrimonial house. The Court ordered valuation for the house as of 15th May 2013 is in the sum of $170,000.00.

NOW THEREFORE BE IT ORDERED BY THE COURT THAT:


  1. Now time to exercise court's discretion. This discretion must be done judicially within accepted property settlement norms.
  2. The facts and circumstances discussed in above paragraphs also considered and the court conclude the overall distribution would be in the proportion of 25% to the wife and 75% to the husband.
  3. I therefore make following final orders:
    1. That there be distribution (25:75) of the matrimonial property at Lot 00 DP 5667 Housing Authority Sub Lease No. 227808 ("the matrimonial property") subject to the following:
      1. From the value of the house as per the valuation report dated 15th May 2013.
      2. The court notes that the said property is subjected to two mortgages and as per the above mentioned valuation report the amount is $85.000.00 and FNPF charge and the latest outstanding payments of mortgage amount as to 24-07-14 shows that the mortgage is $ 37,576.69. Therefore, the latest amount of mortgage to be deducted from the valuation for the house as of 15th May 2013. (less liabilities)
    2. The husband may retain the residential property at Lot 00 DP 5667 Housing Authority Sub Lease No. 227808 subject to the payment equalling to 25% of the value of the property to the wife. The husband can make a lump sum payment or a periodic payment;
    1. In the event that the payment as mentioned in [b] above is made on the expiration of the 06 months from the date of this order, the property at Lot 00 DP 5667 Housing Authority Sub Lease No. 227808 can be sold and payment be made to the wife in the sum equalling to the value of 25% from the proceeds of the sale. Unless the parties agree to the contrary, they shall further to all acts and things to and sign all documents necessary to sell the property.
    1. Property shall be sold to the highest bidder but not less than the valuation amount of $$170,000.00 0r the forced sale amount as per the valuation for the house as of 15th May 2013.
    2. Realisation cost relating to the sale of the property to be paid from the proceeds of the sale [including the solicitor’s fees to prepare transfer documents].
    3. Wife is at liberty to apply to the court for appointment of an officer of the court to execute the transfer documents if the husband refuses to execute the transfer document.
    4. There shall be no costs against either party.
  4. I wish to conclude the decision with the below mentioned paragraph from White v. White (2000) 1 ALL ER 1.which was quoted in Koroiwaca v Bakoso [2004] FJHC 207; HBA0003.2004 (26 May 2004) by her ladyship Justice Anjala Wati.

“Divorce creates many problems. One question always arises. It concerns how the property of the husband and wife should be divided and whether one of them should continue to support the others. Stated in the most general terms the answer is obvious. Everyone would accept that the outcome on these matters, whether by agreement or court order, should be fair, more realistically, the outcome ought to be as fair as it possible in the circumstances. But every one’s life is different. Features which are important when discussing fairness differ in each case. And sometimes different minds can reach different conclusions on what fairness requires. Then fairness like beauty lies in the eyes of the beholder.”


Acknowledgement: I would like to extend my sincere gratitude to His Lordship Hon. Mr Justice Stephen Thackray for his Lordship’s paper on “The New Family Law Property System.”(Based on his Lordship’s Lecture (Fiji Law Society) in July 2006.)


30 days to appeal.


LAKSHIKA FERNANDO


RESIDENT MAGISTRATE

On this 08th day of August 2014

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