Abrams & Falconi
[2021] FCCA 692
•27 January 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Abrams & Falconi [2021] FCCA 692
| File number(s): | MLC 5351 of 2019 |
| Judgment of: | JUDGE BENDER |
| Date of judgment: | 27 January 2021 |
| Catchwords: | FAMILY LAW – property – where the Wife seeks a superannuation splitting order of 50 per cent – where there are no other assets in the property pool – where the Husband has not participated in these proceedings since December 2019 HELD – superannuation splitting order made for a transfer of $66,047.63 to the Wife’s superannuation fund – no adjustments for contributions or 75(2) factors |
| Legislation: | Family Law Act 1975 (Cth) |
| Cases cited: | Bevan and Bevan [2013] FamCAFC 116 Hickey and Attorney General for the Commonwealth of Australia [2003] FamCA 395 Stanford v Stanford [2012] HCA 52 |
| Number of paragraphs: | 56 |
| Date of hearing: | 27 January 2021 |
| Place: | Melbourne |
| Counsel for the Applicant: | The Applicant appeared in person |
| Counsel for the Respondent: | The Respondent did not appear |
ORDERS
| MLC 5351 of 2019 | ||
| BETWEEN: | MS ABRAMS Applicant | |
| AND: | MR FALCONI Respondent | |
ORDER MADE BY: | JUDGE BENDER |
DATE OF ORDER: | 27 JANUARY 2021 |
THE COURT ORDERS THAT:
The base amount of $66,047.63 of the interest held by the Husband, MR FALCONI (MEMBER SPOUSE) in Super Fund B is allocated, as required b s. 90XT(1)(a) of the Family Law Act 1975 (Cth), to the Wife, MS ABRAMS (NON-MEMBER SPOUSE) out of the interest held by the Husband, MR FALCONI (MEMBER SPOUSE) in Super Fund B.
Whenever the Trustee of Super Fund B makes a splittable payment to the Husband, MR FALCONI (MEMBER SPOUSE), the Trustee shall pay the Wife, MS ABRAMS (NON-MEMBER SPOUSE) the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth), and make a corresponding reduction in the entitlement of the Husband, MR FALCONI (MEMBER SPOUSE) would have had but for these orders.
Order (2) has effect from the operative time.
The operative time being the fourth business day after the date of service of these Orders on the Trustee.
Orders (1) to (4) inclusive bind the Trustee of Super Fund B.
IT IS NOTED that publication of this judgment under the pseudonym Abrams & Falconi is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
(Revised from Transcript)
Introduction
This is an Application filed by the Applicant Wife on 17 May 2019 (“the Application”) in which she seeks property orders under the Family Law Act 1975 (Cth) (“the Family Law Act”).
The Applicant is seeking a superannuation splitting order in relation to the Respondent Husband’s superannuation entitlements with Super Fund B on the basis that the current balance be divided such that 50 per cent is transferred to the Applicant’s superannuation fund.
The position of the Respondent as at today is unknown as he has failed to participate in these proceedings since December 2019, despite having been given the opportunity to do so.
When the Respondent was participating in these proceedings he was legally represented. Those lawyers filed a notice of withdrawal on 18 June 2020.
At the time he was represented, the position of the Respondent was that the Application filed by the Applicant be dismissed.
The matter first came before the Court on 23 July 2019 at which time the matter was adjourned for the filing of answering material by the Respondent, which he did on 27 August 2019.
The matter came back before the Court on 10 September 2019 and was listed for a conciliation conference on 30 October 2019 and a further mention on 12 December 2019.
The matter did not settle at the conciliation conference and when it came back before me on 12 December 2019, I listed the matter for final hearing on 18 September 2020 and made orders and directions for the filing of trial material.
On 18 September 2020 the Respondent had not filed any answering material and he did not appear.
On that date I adjourned the matter to 24 November 2020 and made orders for the Applicant to file an Amended Initiating Application. Further orders were made for the service of that material on the Respondent to be by way of post. Orders were also made that in the event the Respondent failed to file answering material or appear on the adjourned date, the Applicant would have leave to seek orders on an undefended basis in the terms set out in her Amended Initiating Application.
The matter came before the Court on 24 November 2020. The Applicant had filed her Amended Initiating Application and complied with the requirements for service on the Respondent as ordered.
The Respondent did not appear on 24 November 2020 or file any answering material.
The matter could not proceed on 24 November 2020 on an undefended basis as the Applicant had not complied with the requirements for procedural fairness in relation to the Respondent’s superannuation fund pursuant to rule 10.16 of the Family Law Rules 2004.
The matter was adjourned to today with directions given for the Applicant to do all things necessary to afford the Respondent’s superannuation fund procedural fairness.
There is correspondence before the Court today from Super Fund B confirming that the Applicant has complied with all requirements in relation to procedural fairness and that they have no objection to orders being made for a superannuation splitting order in the terms proposed by the Applicant.
Background
The Applicant was born in 1984 and is currently 36 years old. She is currently engaged in part-time employment.
The Applicant has two children from previous relationships; an adult son who is 20 years old and an 11 year old son who is currently in her care as a result of orders that were made by the Department of Health and Human Services because of abuse that he was receiving at the hands of his Father. She receives no assistance from her youngest son’s Father, financially or practically, in relation to his care.
The Respondent was born in 1978 and is currently 41 years old.
It is the understanding of the Applicant that the Respondent is possibly currently being held in jail pending the hearing of assault and drug charges as a result of him consistently breaching his bail. It is noted that the assault charges relate to abuse and assault that was occasioned on the Applicant.
The parties commenced their relationship in 2011 and commenced cohabitation in 2012. There were periods of separation during the relationship but the parties married on 18 March 2017 and separated for the final time in November 2017.
At the commencement of the relationship the Respondent owned property at C Street, Suburb D (“the C Street, Suburb D property”). This property was retained by him after the property settlement with his former Wife.
In March 2016, the parties jointly purchased a property at E Street, Suburb F (“the E Street, Suburb F property”).
The C Street, Suburb D property sold in April 2016 and the proceeds were used to repay the loan from the Respondent’s Mother that had been made to enable the purchase of the E Street, Suburb F property and to discharge the debts of the Respondent.
In 2016 the Applicant was charged with fraud and theft by deception and was incarcerated in 2017 as a result of those charges. The Police pursued restitution orders that were made by the Court and as a result, after the sale of the E Street, Suburb F property, 50 per cent of the net proceeds of sale, as well as 50 per cent of the parties’ joint savings, were taken in satisfaction of that restitution order. The remaining 50 per cent was retained by the Respondent.
At the time of incarceration, the Applicant had a motor vehicle subject to finance. The Applicant had an arrangement with the Respondent for that vehicle to be given to the Applicant’s Mother who was to attend to the payment of finance and enable her to have the benefit of the vehicle as she was caring for the Applicant’s children.
The Respondent did not return the vehicle or make any payments. The Respondent ultimately dumped the vehicle, which resulted in the Applicant’s loan being defaulted and she being liable to the finance company.
Shortly prior to the Applicant’s incarceration the Respondent withdrew $35,000 on the Applicant’s credit card. Those funds were to be repaid to the Applicant when she was incarcerated, but instead they were retained by the Respondent. It is the evidence of the Applicant that she remains liable for that credit card debt.
As a result of interventions by organisations who assisted the Applicant whilst she was incarcerated, the car finance company and the bank have placed a moratorium on repayment pending the outcome of these proceedings before the Court.
The Law
Section 79 of the Family Law Act defines the Court’s powers in determining applications for property settlement. Section 79(2) of the Family Law Act provides that:
The Court shall 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.
Section 79(4) of the Family Law Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The High Court in the matter of Stanfordv Stanford [2012] HCA 52 held that, prior to making orders for the division of the property in which the parties have an equitable interest, in accordance with the provisions of section 79 of the Act, the court must first determine that it is just and equitable that the court make such orders. The High Court in Stanford held that in the majority of matters, the decision as to whether it is just and equitable for the court to make property orders of these were resolved by the breakdown of the marital relationship and the mutual desire of both parties for orders altering their respective property interests.
Whilst there is not a mutual application for the parties to alter their respective property interests, it is quite apparent that this is a matter where it is just and equitable for there to be a determination of property matters between these parties to enable them to move on with their lives. I am therefore satisfied that this court should proceed to deal with the matter.
Prior to the decision in Stanford, a trial judge would, in most cases follow the four-step approach in determining how to alter property interests between the parties, as articulated in the Full Court decision of Hickey & Hickey [2003] FamCA 442. That four-step process in Hickey is as follows:
a)Firstly, the court will determine the nature of the property pool and attribute valuations;
b)Secondly, the court will consider the contributions of the parties to the property pool, including direct and indirect financial contributions, and non-financial contributions, often in the form of homemaker and parent;
c)Thirdly, after considering entitlements based on contributions, the court determines whether any further adjustments to either party’s entitlement is proper given the considerations under section 75(2) of the Act;
d)Finally, the court stands back and considers whether the proposed division of property is just an equitable pursuant to section 75(2) of the Act.
Assets and Liabilities
The only assets now available to the parties for separation is the parties’ respective superannuation entitlements.
At separation there was a jointly owned property, cash assets, engagement and wedding rings, a car and furniture. Property was sold and the net proceeds of sale and cash were frozen by the state Courts because of an application by the police following the Applicant’s arrest.
As a result of the Applicant’s illegal behaviour, 50 per cent of frozen assets were seized by the police in satisfaction of the restitution order. The Respondent received the remaining 50 per cent. The Respondent has spent the whole of the monies received by him.
The Applicant has in her possession her engagement and wedding rings.
The car’s history has been outlined in paragraph [25] – [26] of this judgment.
Therefore, when considering what the parties’ assets for division are, there is the Respondent’s current superannuation with Super Fund B which as at 6 January 2021 was $138,592.60 and the Applicant’s superannuation which as at 27 January 2021 is $6,497.34.
Contributions
The contributions of the parties is somewhat a vexed issue given the history relevant to this matter.
The Respondent had the benefit of the proceeds of sale of C Street, Suburb D property in that the majority of the equity in that property was utilised to discharge the debts of the Respondent. $65,000 of the proceeds of sale were used towards the purchase of the E Street, Suburb F property.
After separation the Wife’s share of the proceeds of sale of the E Street, Suburb F property was seized by the police. The Respondent has spent the entirety of his share of the proceeds of sale.
It is arguable that both parties have made negative contributions to their asset position as a result of their behaviours and that what is available now to the parties reflect this.
When considering the circumstances of these parties I am of the view there should be no adjustment in either party’s favour for contribution factors.
s75(2) Factors
In relation to 75(2) factors, the Applicant does have the responsibility for the care of her youngest son. He is not a child of the relationship.
It would appear that both parties have issues in relation to responsibilities and income-earning capacity. Both parties are of a similar age and have a capacity to earn income.
I am therefore of the view there should not be any adjustment for 75(2) factors.
Conclusion
As noted in paragraph [2] of this judgment, the Applicant’s proposal is for there to be a splitting order in relation to the Respondent’s superannuation entitlements such that she receives 50 per cent of the current balance.
The balance of the Respondent’s superannuation earlier in 2020 was close to $150,000. However, the Respondent was able to withdraw $25,000 of that. It is not known whether the basis for the withdrawal was his own personal hardship or because of the COVID-19 concessions allowing parties to withdraw monies from their superannuation funds. In either circumstance, the Respondent has had the benefit of those monies.
It is apparent from the documents the Court has received that there is contributions to the Respondent’s superannuation fund prior to the commencement of cohabitation and some contributions post-cohabitation. It is unknown how long those contributions post-cohabitation continued as it is unknown when the Respondent left his employment.
It seems reasonable to me that the $25,000 already taken by the Respondent is an appropriate adjustment in his favour to reflect the periods when he was contributing to his superannuation post-cohabitation.
I am therefore satisfied that there should be a splitting order in relation to the Respondent’s superannuation in favour of the Applicant.
The Applicant is seeking 50 per cent of the Respondent’s current superannuation. Whilst I am of the view that a 50 per cent division is appropriate, I do need to take into account the superannuation owned by the Applicant when I look at the totality of the superannuation.
The total superannuation when combining the Applicant’s superannuation ($6,497.34) and the Respondent’s superannuation ($138,592.60) is $145,089.94. I will divide that figure by 2 to represent each receiving a 50 per cent share and subtract from the Applicant’s half share the amount she already has in her own superannuation. That comes to $66,047.63.
I will therefore make a superannuation splitting order in favour of the Applicant in the amount of $66,047.63.
Given my findings that this is a matter where I am of the view that there be no adjustment with respect to contributions and 75(2) factors, I am satisfied that such an outcome is just and equitable as it reflects a fair division of the parties remaining assets.
| I certify that the preceding fifty-six (56) numbered paragraph are a true copy of the Reasons for Judgment of Judge Bender. |
Associate:
Dated: 9 April 2021
Key Legal Topics
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Family Law
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Statutory Interpretation
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Statutory Construction
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