Acerra & Calvi
[2024] FedCFamC2F 110
•2 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Acerra & Calvi [2024] FedCFamC2F 110
File number(s): HBC 478 of 2022 Judgment of: JUDGE TAGLIERI Date of judgment: 2 February 2024 Catchwords: FAMILY LAW – property – almost 30 year de facto relationship – s 90SM property adjustment sought – if and when testamentary trust vested – whether testamentary trust contribution of both parties or of husband – whether post-separation financial contribution to be added back to pool – superannuation splitting order made – orders made adjusting net non-superannuation assets to 54 per cent to the husband and 46 per cent to the wife Legislation: Family Law Act 1975 (Cth) ss 90SF(3), 90SM, 90XT(1)(a)
Family Law (Superannuation) Regulations 2001 (Cth)
Cases cited: Kessey & Kessey [1994] FamCA 162; (1994) FLC 92-495
In the Marriage of Bonnici [1991] FamCA 86; (1991) 105 FLR 102
Robertson & Wells [2022] FedCFamC1F 1046
Ward & Ward [2004] FMCAfam 193
Division: Division 2 Family Law Number of paragraphs: 76 Date of last submission/s: 11 January 2024 Date of hearing: 4 and 9 October 2023 Place: Hobart Counsel for the Applicant: Mr Trezise Solicitor for the Applicant: Crotty Legal Solicitor for the Respondent: Mr Mead, Mead Family Law ORDERS
HBC 478 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ACERRA
Applicant
AND: MR CALVI
Respondent
ORDER MADE BY:
JUDGE TAGLIERI
DATE OF ORDER:
2 FEBRUARY 2024
THE COURT ORDERS THAT:
Non-Superannuation Assets and Liabilities
1.The properties situated at B Street, Suburb C, Tasmania and D Street, Town E, Tasmania (“the Properties”) be sold and for this purpose the following terms will apply:
(a)The sales will be by private treaty with such agent as the Husband and Wife agree to appoint and failing agreement as to the agent to be appointed within fourteen (14) days, the Properties be listed for sale with such agent as the President of the Real Estate Institute of Tasmania (“the President”) shall nominate (“the Agent”) and the costs of and incidental to the request of the President and such appointment be paid by the parties in equal shares as and when they fall due.
(b)The appointment of the Agent shall be on a sole agency basis for a period of not less than six (6) months.
(c)Both parties must co-operate in every way with the Agent during the sale of the Properties, including signing documents required to market the Properties and allowing inspection of the Properties at times reasonably requested by the Agent.
2.At the completion of the sales referred to in Order 1 of these Orders, the proceeds of sale be paid in disbursement of the following:
(a)All costs (including legal costs), commissions and expenses of the sales;
(b)Any council and water rates, land tax and other outgoings outstanding in respect of the Properties; and
(c)Thereafter to achieve a 54/46 per cent adjustment of the net non-superannuation assets in favour of the Husband, to be calculated in accordance with the findings and determination at [68]-[70] of these reasons for judgment and each party retaining the assets and liabilities in their names.
Superannuation Split
3.The base amount allocated to the Wife out of the superannuation interest held by the Husband with Super Fund 1 (“the Fund”), account number …29 is $121,484.
4.Pursuant to s 90XT(1)(a) of the Family Law Act 1975 (Cth), whenever the Trustee of the Fund makes a splittable payment, the Trustee shall pay to the Wife or her legal personal representatives an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the base amount specified in Order 3 of these Orders, and there shall be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this Order.
5.The previous Order has effect from the operative time.
6.The operative time is four (4) business days from the date this Order is served upon the Trustee of the Fund.
7.Each party and the Trustee of the Fund have liberty to apply in relation to the implementation of this superannuation splitting Order.
8.The Trustee of the Fund, in accordance with the obligations set out under the Family Law Act 1975 (Cth) and Family Law (Superannuation) Regulations 2001 (Cth), shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of the Wife, and make payment in accordance with Orders 3 and 4 of these Orders.
Other Property and Financial Resources
9.Unless otherwise specified in these Orders, and except for the purposes of enforcing payment of any money due under these or any subsequent Orders, each party is solely entitled to all property and financial resources (and choses in action) in their possession on the date of these Orders to the exclusion of the other. For the purposes of this Order:
(a)Banking and other accounts are deemed to be in the possession of the person whose name appears on the records of the relevant financial institution;
(b)Insurance policies are deemed to be in the possession of the beneficiary or beneficiaries named in the policy;
(c)Superannuation entitlements are deemed to be in the possession of the person named as the worker whose age or working future provides the conditions for payment out of such entitlements; and
(d)Each party is solely liable for and indemnifies the other against any liability encumbering any item of property of financial resource to which that party is entitled under these Orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE TAGLIERI
These property proceedings are brought pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) and were heard on 4 and 9 October 2023.
The Applicant Ms Acerra (“the Wife”) and the Respondent Mr Calvi (“the Husband”) cohabited between approximately 1990 and June 2020. The parties were never married but it is agreed that they were in a de facto relationship for about 30 years, invoking the jurisdiction of the Court.
The ultimate issues for determination relate to what orders should be made by way of alteration of the parties’ property interests. The parties agree that orders are to be made but there is dispute as to their terms.
Counsel for the parties agreed that the contentious issues for determination by the Court were:
(a)How post-separation contributions made by the Wife towards support of the youngest child should be treated;
(b)How the 2011 testamentary trust should be treated, and whether it was a contribution by both parties or should be treated as a contribution by the Husband alone;
(c)What adjustment should be made for disparity in earning capacity between the parties; and
(d)Whether a post-separation payment to the Wife of $37,461 was to be treated as a partial property settlement and added back for the purpose of findings about the value of the net asset pool.
MATERIALS RELIED UPON
The Wife relied on:
·Her affidavit filed 5 September 2023; and
·Her Financial Statement filed 27 May 2022.
The Husband relied on:
·His affidavit filed 12 September 2023; and
·His Financial Statement filed 29 September 2022.
The parties tendered a common balance sheet reflecting their assets, liabilities and superannuation interests.[1] The parties both filed written outlines of submissions and minutes of orders sought, which have been considered.[2]
[1] Exhibit A-1.
[2] See the Wife’s Proposed Minute of Orders filed 5 September 2023 and Written Submissions filed 26 September 2023; and Husband’s Proposed Minute of Orders filed 20 September 2023 and Written Submissions filed 2 October 2023.
AGREED FACTS
The following facts were not in contention or were agreed in a statement of agreed facts.[3] I make findings accordingly:
[3] Exhibit A-2.
(a)The Wife is 58 years of age and employed variously in part-time work. She is also self-employed as an allied health worker conducting business under the name F Company;
(b)The Husband is 61 years of age and employed part-time as a professional with the Public Service
(c)The parties cohabited for approximately 30 years from 1990. Neither party made initial contributions;[4]
(d)There are two adult children of the relationship, for whom the Wife was the primary caregiver;[5]
(e)The Husband was the primary income earner during the relationship;[6]
(f)The youngest child is 19 years of age and has, post-separation, lived with the Wife. The Wife says she is “high needs”;
(g)Following the death of the Husband’s father, the sum of $600,000 was received pursuant to a testamentary trust in 2011 and this led to the establishment of the Calvi Family Trust (“the testamentary trust”);[7]
(h)The Husband is the sole trustee of the testamentary trust;[8] and
(i)In 2018, the Husband received an inheritance following his stepmother’s death and there is no dispute that the intent of the inheritance was to benefit the Husband alone.[9]
[4] Exhibit A-2 at [1].
[5] Exhibit A-2 at [2].
[6] Exhibit A-2 at [3].
[7] Exhibit A-2 at [4].
[8] Affidavit of the Husband filed 12 September 2023 at [19]; affidavit of the Wife filed 5 September 2023 at [20]; and Statement of Agreed Facts Re: Calvi Family Trust filed 10 January 2024 at [2].
[9] Exhibit A-2 at [6].
Although [7] of Exhibit A-2 stated “all other contribution factors are considered to be equal”, I consider this statement ambiguous as it fails to identify what other relevant contributions were agreed. For this reason, little weight can be attributed to the statement.
THE PARTIES’ EVIDENCE
The Wife
The salient aspects of the Wife’s evidence when cross-examined were as follows:
(a)She attained her tertiary qualifications and subsequently enrolled in post tertiary qulaifications;
(b)In addition to conducting her work through her business and part-time work at H Company, she was previously employed part-time at J Organisation as a professional;
(c)The youngest child is “high needs”, which the Wife explained was a term used by the child’s psychologist when referring to her mental health;
(d)When it was suggested to the Wife that the youngest child had demonstrated a degree of independence and wanted to move to Melbourne, implying that this was inconsistent with “high needs”, the Wife said that the youngest child was no longer intending to move to Melbourne; and
(e)She agreed that the Husband pays the sum of $650 per fortnight to the youngest child to assist in her support.
The Wife was cross-examined about the contents of the report dated 4 August 2023 and authored by her treating doctor, Dr K.[10] It was put to her that it was “a positive report”, implying it did not support her claims that her health impacted on her work capacity and earnings. The Wife stated that she did not disagree with what Dr K said in the report but that counsel’s description of the report as “positive” was a matter of opinion for him.
[10] Affidavit of the Wife filed 5 September 2023 at Annexure C.
The Wife agreed that she is a beneficiary of her late mother’s will, however she is uncertain as to when she will receive distribution as her sister has commenced court proceedings against the estate.[11] Although the assets of the estate have not been valued, the Wife stated that she expected to receive approximately $200,000.
[11] Affidavit of the Wife filed 5 September 2023 at [32].
The Wife conceded that she and the family had benefited from receiving distributions from the testamentary trust after the death of the Husband’s father in 2011. In particular, she agreed that those funds were applied to the repayment of mortgages, for renovations and improvements on the land at Town E, and a family holiday to Europe.
The Wife confirmed that she has a HECS/HELP debt in relation to her tertiary studies from 2013. She was in paid employment while she undertook the studies.
The Wife also agreed that the Husband received $100,000 as an inheritance in 2018 from his stepmother’s estate. She further agreed that this money funded renovations and a family holiday.
The Wife confirmed she still owned the Motor Vehicle 1 referred to in the agreed balance sheet tendered as Exhibit A-1, and also that she had received $25,000 from the Husband in late 2022.[12] She did not concede that communications exchanged at the time confirmed that this payment was by way of partial property settlement.
[12] The Wife was not cross-examined about her evidence at [27]-[28] of her affidavit filed 5 September 2023.
Regarding her health, the Wife stated that she had experienced:
(a)Symptoms of a medical condition, though not diagnosed at the time, since her twenties;
(b)Symptoms of another medical condition, which commenced after the youngest child was born;
(c)ADHD, which was diagnosed in 2022; and
(d)High blood pressure, which was diagnosed a number of years ago and is managed with medication.
The Husband
In cross examination, the Husband conceded that his income was approximately $80,000 per annum and that he generally worked the same hours, but also added they varied year to year. He stated that in 2024 he would be undertaking a different position but would still work similar hours.
When asked about the use of the income in the testamentary trust, the Husband stated that it was generally not used at present but then agreed it was used to fund the youngest child by paying her about $375 per week. When it was suggested that he could use the money as he liked, he agreed. However, he added that any expenditure was subject to meeting with the accountant.
The Husband agreed that he is solely responsible for distributing income from the testamentary trust and that in the financial year ending 30 June 2022, the tax return showed that the sum of $38,900 had been distributed. He stated this was distributed to the youngest child. When challenged that $375 per week did not equate to $38,900, only about $19,000, the Husband agreed. However, he could not explain the figures in the tax return.[13]
[13] Exhibit A-3.
The Husband stated that he meets with his accountant and that minutes are prepared about the distributions. He agreed that he had distributed income to the Wife in the past and said that was done due to her having lower income and to minimise tax. He added that this was no longer possible due to changes in tax laws.
The Husband agreed that he had no debts or liabilities, and his only expenses were day-to-day living, rates and taxes.
When asked about the establishment of the testamentary trust, he said that there was no separate trust deed and Mr M, a solicitor at N Law Firm, had advised him that the will itself is the trust document.
The Husband agreed that he had not seen the youngest child face-to-face for two years but disputed that there was no communication between them. He stated that they exchange letters and text messages, and that he is being educated by her in relation to neurodivergence.
The Husband also agreed that the Wife had most dealings concerning the younger child and her psychologist, but said he was informed about them.
The Husband stated that he had received confirmation of his employment transfer to O Company and that he would be employed from 0.6 to 0.8 of full-time equivalent. He agreed that he had stable employment and then added, “realistically, I'm 62 years old”.
The Husband stated that from 2024 he would live at the property owned with his sister at Town P and that he would not be required to pay rent.
WIFE’S CONTENTIONS
In summary, the Wife says that:
(a)Although the Husband brought in financial contributions of $600,000 from the testamentary trust and $100,000 by way of inheritance from his stepmother, her non-financial contributions, including post-separation non-financial contributions in providing for and supporting the youngest child, equalise the parties’ contributions;[14]
(b)The add-back for what the Husband says was a “partial property settlement” is misconceived; and
(c)The Wife’s poor health, instability of employment and income, and her need to support the youngest child warrants an overall adjustment from equality in her favour of seven and a half per cent.[15]
[14] Wife’s written submissions filed 26 September 2023 at [1.5].
[15] Wife’s written submissions filed 26 September 2023 at [3]-[14] and [18].
In oral submissions, counsel for the Wife expanded on these contentions and amplified them by reference to the authorities referred to in his written submissions. Concerning the testamentary trust, he submitted that it should be treated as an equal contribution by the parties and relied on the Full Court’s reasons In the Marriage of Bonnici [1991] FamCA 86 (“Bonnici”) which were applied in Kessey & Kessey (1994) FLC 92-495.
For reasons addressed at [39] and [40] of these reasons, the authorities did not appear supportive of the submissions as they address when a testamentary trust is to be treated as an asset for the purpose of property adjustment orders, a matter that did not appear to be disputed based on the common balance sheet. In addition, because of gaps in evidence in this case, the application of the authorities was not readily apparent.
HUSBAND’S CONTENTIONS
As to the testamentary trust, the Husband submits that it is to be treated as a contribution by him alone. He acknowledges that income distributions from the trust could now be made to any person falling within the meaning of “family” in the will that created the trust but submits that since the parties’ separation and divorce, the Wife is not “family”.[16]
[16] Husband’s written submissions filed 2 October 2023 at [2(a)].
The Husband also argued that because the payment of $37,461 to the Wife was clearly agreed to be “by way of partial property settlement” in correspondence at the time of payment, it needs to be added back for the purpose of identifying the net value of assets subject to adjustment orders.[17]
[17] Husband’s written submissions filed 2 October 2023 at [2(c)].
The Husband also submits that he has financially assisted the youngest child post-separation, and post-separation financial contributions favour an adjustment to him.[18]
[18] Husband’s written submissions filed 2 October 2023 at [2(b)].
While acknowledging that the Wife suffers several medical conditions, the Husband disputes the need for an adjustment in her favour as they do not impair her capacity to work. He further points to his own work stress and need to transfer position of employment as indicative of the parties being in essentially similar positions about their health.[19]
[19] Husband’s written submissions filed 2 October 2023, p 2 under the heading “Future needs”.
The Husband says that the Wife could have made contributions to superannuation as a self-employed person and her failure to do so is a matter for her. Consequently, there should be no adjustment in her favour for future needs.
The Husband admits that he has had rent-free accommodation as he continued residence in the former matrimonial home, but in rebuttal submitted that he has met all expenses and outgoings and maintenance in relation to the real property of the parties.
The Husband also contends that he has contributed to the Wife’s capacity to earn by supporting her ability to study and attain qualifications,[20] and highlighted concessions by the Wife in cross-examination which supported the submission.
[20] Husband’s written submissions filed 2 October 2023 on page 3 at (q) and (r).
Ultimately, it was submitted for the Husband that in all the circumstances the appropriate adjustment from equality was 7.5 per cent in his favour.
POST-HEARING DEVELOPMENTS
After reserving the judgment in these proceedings and considering the evidence before the Court and the parties’ submissions, there appeared to be an evidentiary void as to whether the trust had vested and if so, on what terms. The date and terms of vesting being in my view relevant to the question of how the value of the testamentary trust should be treated when assessing financial contributions.
As there was no probative evidence about the matters referred to at [39] of these reasons and because there seemed to be agreement that the testamentary trust had vested,[21] I invited submission from the parties as to whether they sought to adduce additional evidence and make further submissions.
[21] As the parties agreed that it be included in the common balance sheet.
Counsel for the parties appeared before the Court on 20 December 2023 and submitted that they were agreed about the issues and facts I had raised, and which are referred to at [39] and [40] of these reasons. I therefore made Orders giving leave to the parties to re-open their cases and file a further statement of agreed facts/issues. The Court received a signed and agreed statement of facts concerning the testamentary trust dated 10 January 2024, which was marked as Exhibit J-1.
I make the following findings on the basis of the agreed facts concerning the testamentary trust, now valued at either $700,055.41[22] or $700,055.00,[23] which difference is not explained by the evidence and is immaterial:
[22] Exhibit A-1.
[23] Exhibit J-1.
1.The Trust has not formally vested under the terms of the Last Will and Testament of [Mr Q].
2.However, the parties agree that the Court may treat the Trust as a vested asset, under the sole control of the [Husband] and available to him for distribution at his sole discretion.
3.For these purposes, the [Husband] became Trustee of the Trust on or about 1 February 2012.
4.The assets of the Trust are therefore the property of the parties for adjustment between them under section 905M of the Family Law Act 1975, with an agreed value in their joint balance sheet (Exhibit A-1) of $700,055.00.
5.The agreed value referred to in paragraph 4 above is a gross value and does not include any Capital Gains Tax (CGT) liability which may accrue upon sale of any asset held by the Trust.
6.No estimate of CGT has been prepared as the [Husband]’s case did not seek division and sale of Trust property.
7.It is agreed that the [Husband] will retain the assets of the Trust within the adjustment.
8.The parties otherwise rely upon their respective submissions concerning the weight to be attributed to the acquisition of the Trust and in the particular circumstances surrounding the creation of the Trust.
FINDINGS BASED ON UNCHALLENGED AFFIDAVIT EVIDENCE
The Wife is to receive funds from her late mother’s estate.[24] There is no accurate information about how much she will receive and when, as her sister has brought proceedings against the estate, which I infer is some kind of application for benefit beyond the terms of the late mother’s will.[25] The potential is that the Wife may receive approximately $200,000, but it will likely be less because the estate will incur legal costs in the proceedings and even if the sister’s application fails not all of the estate’s costs are usually recovered.[26]
[24] Affidavit of the Wife filed 5 September 2023 at [32]. See also [12] of these reasons.
[25] Affidavit of the Wife filed 5 September 2023 at [29]-[32].
[26] For example, solicitor-client costs.
Furthermore, I find based on the Wife’s evidence, that the Husband contributed to a degree to her support and well-being post separation.[27]
[27] Affidavit of the Wife filed 5 September 2023 at [26]
Based on the Husband’s affidavit evidence that was not challenged, I find that:
(a)He received a gift of $10,000 early in the relationship, which assisted in the purchase of the former matrimonial home;[28]
(b)The current balance of the testamentary trust includes the shareholdings of $240,000 which the Husband received from his stepmother’s estate;[29] and
(c)The Husband’s one third interest in the property at Town P was acquired as part of the inheritance from his late stepmother in 2018.[30]
EVALUATION AND FINDINGS ABOUT DISPUTED ISSUES
[28] Affidavit of the Husband filed 12 September 2023 at [14].
[29] Affidavit of the Husband filed 12 September 2023 at [31].
[30] Affidavit of the Husband filed 12 September 2023 at [28].
Treatment of post-separation contributions claimed by the Wife
As the agreed facts and findings at [8(f)], [10(e)] and [19] of these reasons establish, the youngest child has lived with the Wife post-separation, but the evidence also establishes that the Husband has contributed financially to her support. The non-financial contributions by the Wife and the financial contributions by the Husband, although different in character, should be treated as equal when assessed on a wholistic basis. Both emotional and financial support are important and necessary for the child.
I am not persuaded that an adjustment is to be made as claimed by the Wife. Parents can reasonably be expected to do what is within their capacity to support their adult children’s mental health. The Wife did so emotionally, which is not surprising given her qualifications and training, and the Husband did so financially, consistent with his role as the “breadwinner” in the relationship. Wholistically assessed, their respective contributions to the adult child is to be treated as equal.
Establishment of the testamentary trust in 2011
The point of controversy in Bonnici to which I was referred was whether the value of an inheritance should be treated as the parties’ property for adjustment under the Act. This is distinct from what is in dispute in this matter, namely how the contribution is to be treated.
The Wife’s counsel submitted that, when established, the testamentary trust was established for the family of the Husband and that included the Wife. I accept this is so, given the terms of the Will and Testament of Mr Q and the findings that there were distributions from the testamentary trust for the benefit of the Wife and the children.[31]
[31] At [13], [19], and [20] of these reasons.
Since about early 2012, the Husband has been sole trustee of the testamentary trust,[32] which, by the terms of the instrument creating it, was initially a discretionary trust. Although not formally vested under the terms of the Will and Testament of Mr Q, the parties agree that it has practically vested,[33] and that the Husband has sole control of the trust and distributions from it are at his sole discretion.[34]
[32] Exhibit J-1 at [3].
[33] Exhibit J-1 at [1] and [2]; and by inclusion in the common balance sheet.
[34] Exhibit J-1 at [2].
Accordingly, the Husband has had complete control and authority about how the capital and income from the testamentary trust can be distributed since early 2012. That is, he has complete discretion as to making distributions from the trust and is not lawfully bound to make them to the Wife or any other family member. In addition, I have no doubt that the benefit of the trust capital and income would not have existed but for the Husband being a child of Mr Q.
If the parties had not separated and the Husband chose not to make distributions to the Wife, she would have no basis to demand distribution from the testamentary trust by the Husband. Further, I infer that there is no term in the Will and Testament of Mr Q or in any instrument governing the testamentary trust once it practically vested to the Husband, enabling an appointer to now remove the Husband as sole trustee.
It is not surprising that the parties agreed that a separate discretionary trust was established which is in the sole control of the Husband and vested in around early 2012. If it were otherwise, there would not be a basis for including the value of the trust in the pool of assets subject to adjustment of property interests.[35]
[35] Ward & Ward [2004] FMCAfam 193 at [31]-[32].
At no time did the trust vest for the benefit of the Wife and any distributions to her were always solely discretionary. For the reasons given at [50]-[52] of these reasons, I find that the value of the testamentary trust should be treated as a contribution by the Husband alone.
Disparity in earnings/earning capacity
I accept that there has been and will be disparity between the parties’ income and likely future earning capacity. That is entirely consistent with the parties’ evidence, including that in their Financial Statements.
The Husband suggested that the Wife could earn more, but her age and history as a primary caregiver, student and limited part-time worker demonstrates that this is unrealistic. I accept that these factors demonstrate that she will only have part-time earning capacity and her income reasonably will not equate to that of the Husband in the future. The Husband has not persuaded me that the Wife has failed to exercise reasonable earning capacity in all the circumstances.
However, I am not persuaded that the Wife’s health particularly impairs her work capacity. The report of her general practitioner does not support a finding that she has a specific incapacity for the type of work she is qualified and suited to doing. Further, as she is self-employed it enables her to manage her work while supporting her adult daughter.
Treatment of the payment of $37,461 to the Wife
I am not persuaded that the sum of $37,461 should be added back to the non-superannuation assets as the Husband concedes in his evidence that the Wife and their daughter required financial support post-separation. The money was apparently used for reasonable and necessary expenses incurred by the Wife. Despite it being labelled in a letter from the Husband’s solicitors as a “partial property settlement”, the true character of the sum was otherwise.
THE LAW
There is no issue about the Court’s jurisdiction to make orders adjusting the parties’ property, liability, and superannuation.[36] The agreed facts establish that the parties were in a de facto relationship and accumulated financial interests over the long relationship, which they agree, and I find, has now irretrievably broken down.
[36] Pursuant to s 90SM(1).
Further, both parties invited the Court to make final orders altering their property interests and I am satisfied that it is just and equitable for the Court to do so for the reasons that follow and on the basis of agreed facts or factual findings given elsewhere in these reasons.
The adjustment of property interests is to be undertaken according to the statutory considerations in s 90SM(4) of the Act, including the s 90SF(3)(a) to (m) and s 90SM(5). Otherwise, the method or approach to be taken by the Court is usefully summarised in Robertson & Wells [2022] FedCFamC1F 1046 at [22]-[28].
DETERMINATION AND CONCLUSION
There will be no add-back of Item 11 of the common balance sheet, Exhibit A-1, for the reasons given above at [58]. Otherwise, I find the assets, liabilities and superannuation of the parties are as follows, based on the common balance sheet:
ASSETS Description Ownership/Possession Value 1. B Street, Suburb C (“Suburb C”) Joint (to be sold) 2. D Street, Town E (“Town E”) Joint (to be sold) 3. R Street, Town P Husband’s share 232,000.00 4. Family Trust Account …46 with CBA Joint 10,235.00 5. Account …70 with CBA Husband 25,687.79 6. Account …33 with CBA Husband 29,963.57 7. Account …72 with CBA Wife 1,452.90 8. Account …05 with CBA Wife 7,355.75 9. Motor Vehicle Motor Vehicle 1 Wife 4,700.00 10. Motor Vehicle 2 Husband 4,000.00 11. Item of furniture Husband 3,000.00 12. boat Husband 8,000.00 13. The testamentary trust Husband 700,055.41 Assets total 1,026,911.42 LIABILITIES 14. HECS Wife 33,347.02 (as of 1 June 2023) Liabilities total 33,347.02 TOTAL (assets-liabilities) (rounded) 993,103.40 (plus net sale proceeds of Suburb C and Town E) SUPERANNUATION Name of fund Type of interest Member 15. Super Fund 1 Accumulation Wife 76,645.22 16. Super Fund 1 Accumulation Husband 319,613.23 Superannuation subtotal 396,258.45
The agreed respective non-financial and financial contributions as primary carer of the children and primary breadwinner during the relationship are considered equal on a wholistic assessment.[37]
[37] Section 90SM(4)(a) and (b) of the Act and agreed facts at [8] of these reasons.
The Husband made significant financial contributions through the inheritances from his father and stepmother, being:
·The establishment of the testamentary trust in 2011, which now has a value of either $700,055.41 or $700,055.00;[38]
·His interest in the property at Town P, inherited in 2018; and
·$100,000 from the stepmother’s estate in 2018, which was used for the benefit of the family.[39]
I consider that these financial contributions are extraordinary and represent a large proportion of the value of the parties’ property. This warrants an eight per cent adjustment in the Husband’s favour.
[38] See above at [42] of these reasons, which notes the discrepancy in Exhibit A-1 and Exhibit J-1.
[39] See [15] of these reasons.
There is no basis for post-separation adjustments due to the parties’ respective and differing-natured support of the youngest child’s needs.[40]
[40] See [46]-[47] of these reasons.
The disparity between the parties’ earnings and earning capacity in the future does warrant an adjustment in favour of the Wife. Further, the Wife is unlikely to be able to derive income to the same level of the Husband and requires adjustment to support herself at the standard of living customarily experienced in the relationship.[41] Collectively, a four per cent adjustment in her favour is warranted for these factors.
[41] Section 90SF(3) of the Act.
Although the Husband is three years older than the Wife, his security and quality of employment does not warrant any adjustment for shorter duration of work life. Further, the respective health of the parties is subjectively noted to be impacted and neither party strongly challenged the effect of the other parties’ evidence about this. I do not regard the parties’ respective health will particularly influence reasonable work life and/or capacity to earn or their incomes. There was certainly no probative expert medical evidence to the effect that either party’s health compromised their work and earnings.
Based on relevant considerations under s 90SM(4) and s 90SF(3)(a) to (m) of the Act discussed in these reasons and the findings made, there should be an adjustment of the net non-superannuation assets of 54 per cent to the Husband and 46 per cent to the Wife.
The parties did not make submissions about how this final adjustment should be achieved, except that they agreed the properties at Town E and Suburb C should be sold.
Accordingly, the total net sale proceeds of both properties are to be divided in the proportions necessary to achieve the adjustment of net non-superannuation assets referred to at [68] of these reasons, with each retaining the assets and liabilities in their respective names, as demonstrated in the common balance sheet.
The parties’ respective Minutes of Proposed Orders treated superannuation as separate to the net non-superannuation assets.[42] Both parties sought a superannuation split order in almost exactly the same sum. The difference appears to be in rounding up or down by one dollar when the parties’ superannuation interests are equalised.
[42] See Applicant’s Proposed Minute of Orders filed 5 September 2023 at [10.3] and Respondent’s Proposed Minute of Orders filed 20 September 2023 at [7].
No evidence was adduced about the value of each party’s superannuation at the commencement of their relationship or about the increase in their value since separation. In view of this, the length of the relationship and the apparent agreement that superannuation is to be equalised, I am satisfied that it is just and equitable to make a superannuation split order providing for a base amount of $121,484.
The Court’s proposed Orders will not affect the property and income of either party, except to the agreed extent as to the sale of the Suburb C and Town E properties.[43] The cash funds available to each party upon implementation of the Court Orders will enable the Wife to secure accommodation and the Husband will have accommodation in Town O. Further, I infer that they largely will continue to work as they have done since separation in 2020.[44] Accordingly, their income and earning capacity will not materially alter.
[43] Section 90SM(1)(a) of the Act.
[44] Section 90SM(4)(d) of the Act.
The equalising of superannuation and the splitting order will enable both parties to have considerable superannuation to support them in retirement.
In arriving at this determination, I have also factored in that the Husband is likely to continue to support the youngest child financially, although there are no formal orders about adult child support.[45] I do not consider that a specific adjustment in favour of the Wife on account of the future needs of the youngest child is warranted.
[45] A potential factor pursuant to s 90SM(4)(g) of the Act.
For all the foregoing reasons, I consider that the entirety of the Court’s determinations do justice between the parties.[46]
[46] Sections 90SF(3)(n), (o), and (r) of the Act.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Taglieri. Associate:
Dated: 2 February 2024
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