Baier & Baier (No 2)
[2022] FedCFamC1F 277
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Baier & Baier (No 2) [2022] FedCFamC1F 277
File number(s): SYC 1254 of 2020 Judgment of: ALDRIDGE J Date of judgment: 29 April 2022 Catchwords: FAMILY LAW – PROPERTY – Application for property settlement orders – Contributions assessed as 52.5 per cent for the husband and 47.5 per cent for the wife – Where the wife is entitled to an adjustment as she will bear most of the care and support for the child – Orders for the wife to receive 57.5 per cent of the net assets and for the husband to receive 42.5 per cent of the assets – Superannuation splitting order made. Legislation: Family Law Act 1975 (Cth) s 79
Family Law (Superannuation) Regulations 2001 (Cth)
Cases cited: Coghlan and Coghlan (2005) FLC 93-220 Division: Division 1 First Instance Number of paragraphs: 57 Date of hearing: 14–16 March 2022 Place: Sydney The Applicant: Litigant in person Counsel for the Respondent: Mr Wong Solicitor for the Respondent: First Choice Family Lawyers ORDERS
SYC 1254 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BAIER
Applicant
AND: MS BAIER
Respondent
ORDER MADE BY:
ALDRIDGE J
DATE OF ORDER:
29 APRIL 2022
THE COURT ORDERS THAT:
1.Within sixty (60) days from the date of these orders, the parties are to do all acts and things and sign all documents necessary to forthwith place the property situated at F Street, Suburb G (“the [Suburb G] property”) (Folio Identifier: …95) for sale and sold by public auction on the following terms:
(a)A real estate agent is to be appointed by the agreement of the parties to market the property and failing such agreement the real estate agent shall be as nominated by the President of the Real Estate Institute of New South Wales or the President’s nominee at the shared expense of the parties;
(b)The reserve sale price of the property shall be as agreed between the parties and failing such agreement, the sale price shall be nominated by the President of the New South Wales Division of the Australian Property Institute or the President’s nominee at the shared expense of the parties;
(c)A solicitor is to be appointed to act on the sale of the property by the agreement of the parties and failing such agreement by a solicitor nominated by the President of the Law Society of NSW at the shared expense of the parties;
(d)The parties shall co-operate with all reasonable requests by the real estate agent in relation to the sale including to facilitate inspections of the property by prospective purchasers; and
(e)Until such time as the Suburb G property is sold, the wife is to do all acts and things necessary to ensure that she maintains the Suburb G property in good order and pays all outgoings in respect of the Suburb G property including:
(i)Repayments on any mortgage secured over the property;
(ii)Insurance for all reasonable insurable risks, including building and contents insurance;
(iii)Strata, council and water rates; and
(iv)Any land tax due on the property.
2.In the event that the Suburb G property is not sold by public auction within a period of three (3) months from the date of these orders, the parties are to do all acts and things and sign all documents necessary to forthwith re-list the Suburb G property for sale by public auction every two (2) months. On the same terms as set out in Order 1 above, save that, unless otherwise agreed, the reserve price shall be reduced by 5% at each auction until the property is sold.
3.On completion of the sale of the Suburb G property, the proceeds of sale shall be applied in the following order of priority:
(a)In discharge of any mortgage(s) and loans secured over the property;
(b)In payment of any outstanding council rates, water rates or land tax due in respect of the property;
(c)In payment of any real estate agent’s commission, marketing expenses, auctioneer’s fees;
(d)In payment of any solicitor’s costs and disbursements for acting on the sale;
(e)In payment to the wife the sum of $844,935;
(f)In payment to the husband the sum of $350,000;
(g)With any surplus to be divided so that the wife receives 57.5 per cent and the husband 42.5 per cent; and
(h)In the event of a shortfall, the shortfall is to be borne in the same proportion as set out in Order 3(g) above.
4.The parties are to forthwith do all acts and things and sign all documents necessary to cause any bank accounts held in their joint names to be closed and the proceeds therefrom be distributed to the husband.
5.Pursuant to s 90XT(1)(a) of the Family Law Act 1975 (Cth): -
(a)Whenever a splittable payment becomes payable from the entitlement of the husband in the Superannuation Fund 1 (account number: …58) (“the Fund”), the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using a base amount of $203,404.
(b)There be a corresponding reduction in the amount the husband would have been entitled to but for these orders.
6.Within twenty-one (21) days of receipt of these orders, the wife shall serve a certified copy of these orders upon the Trustee of the Fund, and provide to the Trustee of the Fund, full particulars as to her name, current postal address, date of birth and, other such particulars as may be required of her by the trustee.
7.The parties shall forthwith do all such acts and things and sign all such documents as may be required to effect a splittable payment and roll-over of the husband’s entitlements in accordance with these orders into such superannuation fund elected by the wife.
8.The Trustee of the Fund shall do all such acts and things and sign all such documents as may be necessary to pay the wife’s entitlements created by these orders into such superannuation fund as elected by the wife.
9.The husband shall forthwith authorise the Trustee of the Fund to communicate with the wife or any person authorised by her in writing to answer any reasonable enquiries as may be made to her in relation to his entitlement in the Fund and provide the wife or her authorised representative, a copy of any notice of any application or requested by him which seeks release of the entitlement in the Fund insofar as such release effects the wife’s entitlements under these orders.
10.Until such time as all payment due to the wife under these orders has been rolled over into the wife’s elected superannuation fund, the husband is hereby restrained by himself, his servants or agents from executing a death benefit in favour of any other person, or doing any act or thing that will: -
(a)Render any part of his interest in the Fund a ‘not splittable payment’ within the meaning of reg 12 or reg 13 of the Family Law (Superannuation) Regulations 2001 (Cth); or
(b)Prevent the wife or her legal personal representative from receiving the wife’s entitlement under these orders.
11.These orders have the effect from the operative time and, the operative time for the purpose of these orders is the beginning of the fourth business day after the day upon which a certified copy of these orders is served upon the Trustee of the Fund.
12.Orders 5 to 11 bind the Trustee of the fund to observe any obligations as set out in the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 (Cth).
13.Subject to these orders, and except to the extent required to enforce these orders, the husband, hereby releases the wife to the fullest extent permitted by law from any debts, liabilities, demands or claims whatsoever which the husband has or would have had against the wife but for these orders and this release.
14.Subject to these orders, and except to the extent required to enforce these orders, the wife, hereby releases the husband to the fullest extent permitted by law from any debts, liabilities, demands or claims whatsoever which the wife has or would have had against the husband but for these orders and this release.
15.Subject to these orders, the husband is to indemnify the wife, and keep the wife so indemnified, in respect of any debts, liabilities, demands or claims whatsoever arising from or connected with any business or liabilities retained by the husband pursuant to these orders.
16.Subject to these orders, the wife is to indemnify the husband, and keep the husband so indemnified, in respect of any debts, liabilities, demands or claims whatsoever arising from or connected with any business or liabilities retained by the wife pursuant to these orders.
17.Except as otherwise provided in these orders, the parties are each declared the sole owners in equity and at law, to the exclusion of each other, to all items of property and financial resources, including furniture, jewellery, household items, choses-in-action, motor vehicles, money in bank accounts and superannuation entitlements held in their respective names, possession or control as at the date of these orders.
18.Except as otherwise provided in these orders, the parties are each to remain solely liable to the exclusion of each other to any debt or liability held in their respective names as at the date of these orders.
19.In the event that either party refuses to do any act or thing or sign any document necessary to give effect to these orders, a registrar or judge of the Federal Circuit and Family Court of Australia in Sydney is appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to do any such act or thing or execute any such document at the cost of the defaulting party.
20.That the husband pay the wife’s costs of and incidental to these proceedings.
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 the pseudonym Baier & Baier has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
INTRODUCTION
These are property settlement proceedings between Mr Baier (“the husband”) and Ms Baier (“the wife”). The husband seeks an order that their property be divided so that he receives 55 per cent and the wife 45 per cent. For her part, the wife proposes an order that she receives 60 per cent and the husband 40 per cent. The difference comes about principally to the weight they attributed to the various matters raised by s 79 of the Family Law Act1975 (Cth) (“the Act”).
THE PROPERTY TO BE DIVIDED
At the end of the hearing the parties had largely agreed on the property to be divided and had excluded from consideration many assets and bank accounts of lesser value. The main assets to be divided are the former matrimonial home at Suburb G (“the [Suburb G] property”) and the husband’s superannuation entitlements.
There were three items from the Adjusted Joint Balance Sheet, provided by the parties and marked as Exhibit 6, that were also in dispute:
(1)The value of the wife’s jewellery;
(2)The ownership of Motor Vehicle 1; and
(3)The undisclosed bank accounts and inheritance of the wife.
The jewellery
The jewellery owned by the wife was not specifically identified or valued. In the Adjusted Joint Balance Sheet, the wife asserted it has a value of $1,000 and the husband claimed it had a value of $25,000.
In support of his position, the husband relied on a number of photographs which the wife accepted as depicting some of the jewellery owned by her. That does not however establish the value.
Each of the asserted values is just that – an assertion. However, as the husband contends that the jewellery had a more significant value, the onus of proof lays on him to establish its value, such as by seeking an order that it be independently valued.
The jewellery will be taken into account at $1,000.
Motor Vehicle 1
The parties’ positions emerge mainly from their notes to the Adjusted Joint Balance Sheet, as opposed to their evidence.
It appears that the wife purchased the car when she was on maternity leave in approximately 2013 and it is currently in the possession of her parents. She asserts that she transferred it to her parents some years ago.
There is no evidence as to its value and the husband accepted that although he put a figure on it at $4,500, he properly conceded that it had nominal value and it was probably not worth worrying about. He was correct.
The wife’s bank account and inheritance
The husband contends that the wife has $100,000 in an undisclosed bank account. First, the husband asserts that the wife received $50,000 from the estate of her grandmother which she has retained. Secondly, the husband asserts that the wife has been able to accumulate $50,000 from her own income over the years.
As to the first, the husband said that (again in the notes of the Adjusted Joint Balance Sheet as opposed to his evidence) that he was told by the wife or her mother that the wife was to receive $50,000 from the estate of her late grandmother. The wife and her mother each denied that this was said and denied that $50,000 was received. The grandmother’s will contains a bequest to the wife in the sum of $5,000.
I am not persuaded that the wife received $50,000 from the estate.
The second point is that the husband asserts that the wife “previously suggested” (Exhibit 6, Note 40) that she had accumulated savings. The husband submitted that this was likely because he spent money repairing and maintaining the cars, which the wife did not do, thus enabling her to accumulate savings.
Further, the husband submits that a comparison of the parties’ income tax returns for the year ending 30 June 2016 and 30 June 2017 proves this to be the case. His income tax return contains a section dealing with interest and dividends which the husband received in that year. The wife’s income tax return does not.
The obvious explanation for the difference, which was that the wife did not receive any interest or dividends, was rejected by the husband. He submitted that, in effect, it was a pro forma document and the absence of a section dealing with those two items meant the document could have been altered by perhaps removing a page. I have to say that this is not apparent upon pursuing it.
Finally, the husband issued a subpoena to Bank 1, but no relevant records were produced.
I am not satisfied that there is evidence which permits an inference to be drawn that the wife has undisclosed bank accounts. No such inference is drawn.
The parties’ agreed that the $40,000 removed from their Financial Institution 2 offset home loan account by the husband should be “added back” as a material asset in the husband’s hands.
It follows that the assets and liabilities to be taken into account are:
ASSETS No. Ownership Description Value 1 J F Street, Suburb G $1,700,000 2 J Bank 3 Savings Account (#...99) Nil 3 J Bank 3 Bonus Saver Account (#...01) Nil 4 J Bank 3 Account (#...00) Nil 5 J Motor Vehicle 3 $2,500 6 J Former matrimonial house contents $12,500 7 H Company L shares $60,000 8 H Boat and trailer $10,500 9 W Jewellery $1,000 10 W Motor Vehicle 2 Nil 11 W Company M shares $1,128 Total $1,787,628 ADD BACKS No. Ownership Description Value 12 H Funds removed by the husband from the parties’ Financial Institution 2 offset home loan account (#...17) $40,000 Total $40,000 LIABILITIES No. Ownership Description Value 13 J Financial Institution 2 100% offset home loan (#...17) $505,065 Total $505,065 SUPERANNUATION No. Member Name of Fund Value 14 H Superannuation Fund 1 $658,431 15 W Superannuation Fund 2 $193,775 Total $852,206 TOTAL SUPERANNUATION AND NON-SUPERANNIATION ASSETS $2,174,769 CONTRUBUTIONS
The parties met in May 2008 and commenced living together in late 2009 at the wife’s unit in Suburb H (“the [Suburb H] property”) which she had purchased a short time before. The parties were married in late 2010.
The parties separated under one roof in 2018 and separated on a final basis in around November or December 2018 with a divorce order made on 21 August 2021.
They have one child who was born in 2012. Pursuant to consent orders made on 16 March 2022, the child will live with the wife and spend significant time with the husband. In 2024, the wife and the child will move to reside in Town J.
At the time the parties’ relationship commenced the husband owned a property in Suburb K (“the [Suburb K] property”) which was rented. By mid-2014, both the Suburb H property and Suburb K property were sold and the proceeds used for the purchase of the Suburb G property in August 2014.
The wife’s evidence was that the net proceeds of sale of her Suburb H property were approximately $137,000, which she applied to the purchase of the Suburb G property. She said that $750,000 was borrowed.
At the same time the husband sold the Suburb K property which was owned by him. His evidence did not disclose what happened to the proceeds but the parties agreed that save for the matters to which I shall specifically refer, the parties agreed that their financial contributions throughout the marriage were equal.
The husband said that he carried out regular maintenance, minor improvements and renovations to the various properties held by the parties. The husband would baulk at the description of them as being minor, but they involved no structural or substantial work. I do not consider them to be of such a nature as to require special recognition. I accept that both parties contributed equally albeit in different spheres.
The second matter raised by the husband is his superannuation entitlement which was valued under the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) as $658,431. That represents approximately 30 per cent of the net assets to be divided.
The husband commenced work at a transport company when he was 18 years of age. He is now 52 and has worked for the company for 34 years. Although there is no evidence to this effect, he estimates the value of his superannuation entitlements at the commencement of the relationship as being $204,004. I cannot say whether that figure was a valuation under the Regulations. It does not matter a great deal. Obviously, the husband had a significant superannuation entitlement at the time of cohabitation because of the contributions that he had made for approximately 20 years before meeting the wife.
The wife’s current superannuation entitlement is $193,775. It is not suggested that her entitlements at the time of cohabitation were of any significance.
It follows that the husband made a significantly greater initial financial contribution than the wife. The husband has continued to contribute to the superannuation fund since separation. As his entitlement forms a substantial part of the net assets to be divided, significant weight must be given to those contributions.
The husband asserted that most of the growth in the shares owned by the parties and in his superannuation occurred within the two years following separation.
Whilst the document relied on by the husband shows that the initial costs of the shares was $4,000, it does not demonstrate when the increase in value took place. In any event, as the shares appear to have been purchased during the relationship, their acquisition cannot be seen as a contribution by the husband alone.
Similarly, there is no evidence as to the increase in value of the husband’s superannuation, or the wife’s for that matter, in the last two years.
These, therefore cannot be taken into account.
Upon final separation, the wife and child moved to live in Town J until orders for them to return were made by a judge of the Federal Circuit Court of Australia (as it was then known) on 4 March 2020. Since that time, the wife and child have lived in the Suburb K property. The parties have equally paid the mortgage.
The husband has lived with his mother and there was no evidence that he was paying rent.
The wife has had the primary care of the child since separation, which is a significant contribution.
In my view, taking into account the above matters, the financial and non-financial contributions made by the parties favour the husband as to 52.5 per cent and the wife at 47.5 per cent.
SECTION 79(4) FACTORS
The husband raised several points which he submitted should be taken into account.
He submitted that his income was lower than the wife’s and that his current income is presently artificially boosted by share dividends.
The husband’s Financial Statement identifies his income as $2,100 per week, together with $10 per week in dividends. The wife’s Financial Statement describes her weekly income as $1,845 plus family benefits of $87. The income of the husband is marginally higher than the wife’s, even excluding the dividends, but they are so similar that there is no disparity to take into account.
The husband said that as he is four years older than the wife, this will adversely affect his capacity to borrow. The husband called in aid a letter from a mortgage broker which said that, due to the husband’s age, it is likely that any maximum loan term would be 20 years with $500,000 as the likely maximum amount lent.
It is difficult to know what to make of this evidence. The husband did not say what was the effect of what he says is his limited borrowing ability. The husband did not point to any particular purchase that would be out of his reach and would justify an adjustment under s 75(2)(o) of the Act. The husband’s main point was that as the wife was younger, she would be able to borrow more.
I do take into account however, in favour of the husband, the fact that he is four years older than the wife and therefore is likely to have less time in the work force.
The wife will have the primary care of the child for at least the next eight years. The child will live with the wife and during school time spend four days a fortnight with the husband. The wife will thus bear most of the care and support for the child. This is a significant factor which weighs in her favour.
Taking these matters into account, there will be a 10 per cent adjustment in favour of the wife so that she will receive 57.5 per cent of the parties’ property and the husband 42.5 per cent.
Although, the wife sought a significant superannuation splitting order, her preferred position, as identified in oral submissions, was to receive as much as possible from the sale of the Suburb G property instead. This approach suited the husband as well, who said that he would like to retain as much as he could from his superannuation, provided he retained $300,000–$400,000 from the sale of the Suburb G property.
The husband also submitted that the Court should adopt an asset by asset approach relying on Coghlan and Coghlan (2005) FLC 93-220. I understand that he intended that his superannuation be treated separately. The husband said that this was particularly so since this was a “short-term marriage” (Transcript 16 March 2022, p.179 line 33).
I propose to deal with all the property as one. Despite the husband’s indicated preference for a two pool approach, his submissions otherwise proceeded on the basis that the property would be dealt with together. In doing so, I have given particular weight to the husband’s contributions to his superannuation.
Whilst it is a common approach in very short marriages where there are no children for the property to be divided asset by asset, this is by no means obligatory. This is not such a case anyway. The parties’ marriage was not lengthy, but also not short. In any event, there is a child whose care and support must be taken into account.-
CONCLUSION
The total net property to be divided is $2,174,769. Thus the wife is to receive $1,250,492 and the husband $924,277.
The parties did not indicate the fate of Motor Vehicle 2 or the former matrimonial house contents. The car is presently in the hands of the husband who will retain it. The house contents will be divided equally.
The husband will retain:
HUSBAND No. Ownership Description Value 1 H Motor Vehicle 2 $2,500 2 H Former matrimonial house contents $6,250 3 H Company L shares $60,000 4 H Boat and trailer $10,500 5 H Funds removed by the husband from the parties’ Financial Institution 2 offset home loan account (#...17) $40,000 Total $119,250
Therefore, he needs to receive $805,027 (being $924,277 less $119,250) from the remaining property. If his share of the proceeds of the Suburb G property is set at $350,000 he would need to retain $455,027 from his superannuation.
Thus, the wife will receive:
WIFE No. Ownership Description Value 1 W Former matrimonial house contents $6,250 2 W Jewellery $1,000 3 W Company M shares $1,128 4 W Superannuation Fund 2 $193,775 5 W Proceeds of sale of the Suburb G property
F Street, Suburb G ($1,700,000)
Less: The Financial Institution 2 100% offset home loan (#...17) ($505,065)
Less: The husband’s share of the proceeds of sale ($350,000)
Total: $844,935$844,935 6 W Superannuation splitting order
The husband’s Superannuation Fund 1 ($658,431)
Less: The husband’s share of his superannuation ($455,027)
Total: $203,404$203,404 Total $1,250,492
I consider the orders to be just and equitable.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 29 April 2022
0
0
0