BALZANO & BALZANO
[2014] FCCA 615
•3 April 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BALZANO & BALZANO | [2014] FCCA 615 |
| Catchwords: FAMILY LAW – Property – parties were married nearly 40 years and are now both retired and have health issues – husband has [E] superannuation pension and seeks that this entitlement be dealt with separately to the parties other assets and that he retain his superannuation in its entirety – wife seeks that the husband’s superannuation be included in the asset pool and there be an equal division of the parties’ assets to include a splitting order in relation to the husband’s superannuation – held: as the husband’s superannuation can be commuted to a known lump sum that it be included in the parties’ total assets – held: given the parties long marriage and their age it is just and equitable that there be an equal division of the parties assets, such assets to include the husband’s superannuation at its known lump sum value. |
| Legislation: Family Law Act 1975, ss.79, 75(2) |
| C v C (2005) FLC 93-220 T v T (2006) FLC 93-263 Pierce v Pierce (1999) FLC 92-844 |
| Applicant: | MR BALZANO |
| Respondent: | MS BALZANO |
| File Number: | MLC 190 of 2013 |
| Judgment of: | Judge Bender |
| Hearing date: | 29 January 2014 |
| Date of Last Submission: | 29 January 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 3 April 2014 |
REPRESENTATION
| Counsel for the Applicant: | Ms Tulloch |
| Solicitors for the Applicant: | JA Middlemis |
| Counsel for the Respondent: | Ms Howe |
| Solicitors for the Respondent: | Heinz & Partners |
THE COURT ORDERS THAT:
The matter be adjourned to 5 May 2014 at 9.30am for mention.
On or before the 17 April 2014 the husband shall advise the wife’s solicitors in writing the manner in which he proposes the wife receive an equal share of the parties’ assets.
In the event the husband fails to comply with order 2 herein or the parties are unable to agree as to the manner in which an equal division of the parties assets is to be effected on the adjourned date the Court shall make such orders it considers necessary to give effect to the decision delivered this day.
AND THE COURTS NOTES THAT:
A.The Court having determined that the parties’ assets, including the husband’s superannuation be divided equally between the parties and that in order for the husband to retain the former matrimonial home and all other assets in his control or possession including his superannuation, the husband shall pay the wife the sum of $263,789.50, the matter is adjourned to enable the husband to determine the manner in which such payment is to be made to the wife and the percentage split of his superannuation required to achieve such division and to afford the husband’s superannuation fund procedural fairness.
B.In the event the parties are able to provide the Chambers of Judge Bender with an agreed minute and proof of procedural fairness prior to the adjourned date, orders will be made in Chambers and the adjourned date vacated.
IT IS NOTED that publication of this judgment under the pseudonym Balzano & Balzano is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 190 of 2013
| MR BALZANO |
Applicant
And
| MS BALZANO |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter relates to the adjustment of the parties property interests following the breakdown of their nearly 40 year marriage.
The husband is seeking orders that the parties divide their ‘realisable’ assets such that the wife receive 55% to 60% of same, he receive 40% to 45% of same and in addition he retain the total benefit of his [E] Superannuation indexed pension from which he currently receives $42,384.68 per annum.
It is argued by the husband that his pension entitlement should be dealt with differently to the parties’ realisable assets. It is further argued by the husband that in the circumstances where he wishes to retain his pension, a just and equitable outcome can be achieved by the wife receiving a greater proportion of the parties’ realisable assets.
The wife seeks an equal division of all the parties assets, including the husband’s superannuation.
It is argued by the wife that as the husband’s [E] pension entitlement can be converted to a lump sum, it should not be treated any differently to the parties other assets.
It is argued by the wife that as the parties were married for nearly 40 years and are both retired, an equal division of all the parties property, including their superannuation entitlements is just and equitable.
Background
The husband was born [in] 1943 and is aged 70 years. He is a retired [omitted]. He has not repartnered.
The wife was born [in] 1946 and is aged 67 years. She is a retired [omitted]. She has not repartnered.
Neither party enjoys good health.
The parties married on [date omitted] 1973 and separated on 16 July 2012. They have four adult children who are all independent.
When the parties commenced co-habitation the husband has been a [occupation omitted] for five years. The husband continued to work as a [omitted] until his early retirement on stress grounds in 1990. The husband has received an indexed pension from his superannuation fund since his retirement from [omitted].
The wife was the primary homemaker and carer for the parties’ four children during the marriage. She was also in paid part-time or
full time employment throughout most of the marriage.
When the matter was first listed for final hearing on 27 November 2014, the matter was unable to proceed because of the uncertainty as to the manner in which the husband’s superannuation entitlements could be dealt with. Orders were therefore made in the following terms:
The parties sign all documentation to prepare a joint letter on or before 11 December 2013, to the [E] Superannuation scheme to determine the following in relation to the husband’s (member spouse) superannuation scheme:
(a) the ability of the fund to split in a lump sum to the wife (non-member spouse) and the impact this would have on the husband’s pension scheme;
(b) the ability of the fund to split the benefit by way of percentage split of the pension payment benefit to the wife and the effect such a split would have on the husband’s pension scheme; and
(c) the ability of the fund to provide a 100% split of the husband’s benefit to the wife.
In response to the correspondence forwarded to the husband’s superannuation fund pursuant to the orders of 27 November 2013, correspondence was received from the husband’s superannuation fund in the following terms:
Order 3(a):
Splitting of Pension-Base Amount
As Mr Balzano (sic) is over age 60, he is no longer subject to future medical or gainful employment reviews.
Under the clean break provisions, if Mr Balzano’s disability pension is subject to a splitting order, the non member spouse will be entitled to be paid as a lump sum.
There is no provision to create a separate interest for the non member spouse and/or for the non member spouse to receive on-going pension payments.
The payment split of a base amount of all splittable payments will be adjusted using the method stated in Schedule 4 of the Family Law (Superannuation) Regulation 2001.
The proportion reduction of Mr Balzano’s pension will be calculated as the amount paid to the non-member spouse under the clean break divided by the valuation of the pension using the method referred to above.
Example
·Annual pension is $15,000
·Pension is revalued at $200,000
·Amount paid to NMS $20,000
·Pension payment is therefore reduced by 20,000/200,000 = 10%
·Annual pension becomes $13,500 (ie $15,000*(1-10%))
Order 3(b)
Splitting of Pension – Percentage Split (50%)
As above, the non member will be entitled to a lump sum, under the clean break provisions, as an amount proportionate to the valuation of the disability pension calculated under the method stated in Schedule 4 of the Family Law (Superannuation) Regulation 2001.
Example
·Annual pension is $15,000
·Non member entitlement 50%
·Valuation of Disability Pension (as described above) $200,000.00
·Non Member Lump Sum $100,000.00 ($200,000 x 50%)
·Pension payment is therefore reduced by $100,000/200,000 = 50%
·Annual pension becomes $7,500 (ie $7,500*(1-50%))
Order 3(c)
Splitting of Pension – Percentage Split (100%)
As above, the non member will be entitled to a lump sum, under the clean break provisions, as an amount equal to one hundred percentum (100%) of the valuation of the disability pension calculated under the method stated in Schedule 4 of the Family Law (Superannuation) Regulation 2001.
Example
·Annual pension is $15,000
·Non member entitlement 100%
·Valuation of Disability Pension (as described above) $200,000.00
·Non Member Lump Sum $200,000.00 ($200,000 x 100%)
·Pension payment is therefore reduced by 200,000/200,000 = 100%
·Annual pension becomes $0.00 (ie $15,000*(1-100%))
Following the lump sum payment to the non member spouse, the member spouse will no longer have an entitlement or hold a superannuation interest with [E] Super.
The husband’s superannuation benefit has been valued in accordance with the Family Law (Superannuation) Regulations 2001. The value is $455,761.02.
It was agreed by the parties and the Court that the matter proceed on the basis of submissions only.
The Issues
The issues in this matter are well defined and are as follows:
a)How should the parties assets be divided between them and in a particular:
i)should the husband’s superannuation pension be dealt with separately to the parties remaining assets and if so what proportion of the parties remaining assets should the wife receive in the event the husband retains his superannuation in its entirety; or
ii)should the parties assets be divided equally between them and, if so, should there be a superannuation splitting order made in relation to the husband’s superannuation.
b)Should there be any adjustment made in the husband’s favour in relation to his superannuation entitlements on the basis he was contributing to his superannuation scheme for 5 years prior to the parties commencing co-habitation.
The Legislation
Section 79 of the Family Law Act 1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Section 79(2) of the 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 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 matters to be taken into account under section 75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)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; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The High Court in the matter of Stanford v 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 Family Law Act 1975 (“the Act”), the Court must first determine that 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 is easily resolved by the breakdown of the marital relationship and the mutual desire of both parties for orders altering their respective property interests.
This is such a matter, and thus it is very apparent it is just and equitable that orders be made adjusting property matters between the parties.
Having determined that it is just and equitable for the Court to make orders adjusting property matters between the parties, the way in which the Court is to ascertain what orders are to be made is clearly set out in the Act. Firstly, the Court must determine the parties’ assets and liabilities, secondly the Court must look at the parties’ contributions in accordance with section 79(4) of the Act and then consider the relevant factors under section 75(2) of the Act. Having undertaken this process the Court must, I believe, be satisfied that the outcome is fair, or to use the language of the Act, ‘just and equitable’ as between the parties.
Assets and Liabilities
The Husband’s Superannuation
It is submitted on behalf of the husband that when determining the division of the parties assets, the husband’s entitlement to an indexed pension pursuant to his [E] Superannuation entitlement should be considered separately to the parties other realisable assets.
Counsel for the husband referred the Court to the Full Court decision of C v C [2005] FLC 93-220. In that matter the Full Court discussed the interpretation of the relevant provisions of Part VIIIB of the Act in proceedings under s.79 involving superannuation interests.
At paragraphs 63, 67 and 68 the Full Court held:
[63] However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the regulations if a splitting order is sought in any application before the court, or if no such order is sought, valued either according to the regulations or otherwise). This of course is the approach which the trial judge adopted in this case.
[67] If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s 4(1), but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable.
[68] When we refer to “the real nature” of the relevant superannuation interest, we are referring to the fact that notwithstanding that its value according to the regulations may well be calculated to be a very significant amount, that superannuation interest may be no more than a present or future periodic sum, or perhaps a future lump sum, the value of which at date of receipt is unknown.
Counsel for the husband referred the Court to a number of “superannuation pension” cases in which it was submitted the principal expounded by the Full Court in C v C (supra) that the preferred approach by the Court when determining a property matter where there was an entitlement to a superannuation pension was to deal with that entitlement separately to the parties other assets was upheld[1].
[1] T v T (2006) FLC 93-263
The cases to which the husband’s counsel referred the Court were all dealing with a Defence Force Retirement and Death Benefits Scheme (DFRDB) pension in its payment phase. A DFRDB pension in its payment phase cannot be commuted to a capital sum.
The Full Court in Craig v Rowlands [2013] FamCAFC 45 were considering how to deal with a DFRDB entitlement. In paragraphs 46 and 47 Justice May and Farrett held:
[46] It is first important to understand in each case what is the nature of the interest. In Semperton the features of the husband’s DFRDB entitlement in that case, which are generally common characteristics to DFRDB, were explained. In Semperton, as commonly appears in these cases, the husband had already commuted the maximum sum possible upon his earlier retirement from the Defence Force. May J explained the main features of the entitlement at the relevant time of the trial:
48. The husband’s DFRDB pension was characterised by his counsel as a guaranteed “income stream indexed for life”; a benefit which could never be commuted to a capital sum, was in its payment phase, and was received by the husband as a fortnightly pension payment. It was submitted that in practical terms, the benefit was an income stream or a financial resource, made splittable only because the Superannuation Regulations make it so, and in any event, only capable of being split to the wife in the form of a fortnightly payment not a lump sum.
[47] May J also explained the affect a splitting order of the entitlement would have on the wife, who in that case was in receipt of a pension:
57. It is also important to note that at the hearing before the Federal Magistrate, neither party sought a splitting order of the husband’s DFRDB pension, although it was acknowledged that such an order could be made. For her part, the wife did not seek such an order because it would have negatively affected her weekly Centrelink pension entitlement.
At paragraph 51 their honours held:
….The requirements that regard be had to the nature of the entitlement, and the just and equitable effect of the proposed orders, clearly require consideration of the specific DFRDB entitlement at hand, and the practical consequences of orders in the context of the parties’ other assets, liabilities and financial circumstances.
In Craig v Rowlands (supra) the Full Court cited with approval Coleman J in McKinnon v McKinnon (2005) FLC 93-242 where His Honour having confirmed the preferred approach of the Court when dealing with a DFRDP pension was an asset by asset approach rather than a global approach stated at paragraph 5:
The reasons the court prefers this approach are essentially that the evidence establishes that the husband’s DFRDB pension is and will in future continue to be a fortnightly pension benefit which can never be commuted or otherwise converted to a lump sum.
As noted, the cases to which the Court has been referred by Counsel for the husband where the Full Court preferred an entitlement to a superannuation pension in the payment phase be dealt with separately to the parties other “realisable assets” are matters in which the pension could not be commuted to a lump sum in the event the Court made a splitting order.
By contrast to the DFRDB entitlement at the centre of the cases to which reference has been made, the husbands [E] pension can, and must, be commuted to a lump sum in the event a splitting order is made.
It is common ground that if the whole of the husband’s [E] pension was commuted to a lump sum, the lump sum payable is $455,761.02.
This Court has a discretion as to whether it takes an asset by asset approach or a global approach in the manner in which it determines how to divide the parties assets when making orders pursuant to s.79 of the Act.
In this matter the wife has a current entitlement to a lump sum superannuation payment of $247,212.00. The parties are in agreement that the wife’s superannuation should be dealt with as part of the realisable pool of assets for division between the parties.
As the husband’s superannuation is able to be commuted to a known lump sum for division between the parties, I am of the view that this distinguishes it from those cases where the Full Court held that an asset by asset approach was the preferable approach when dealing with matters where a parties superannuation is a pension in the payment phase.
Accordingly I intend to adopt a global approach when determining the pool of assets for division between the parties and include the husband’s [E] superannuation settlement in the pool of assets at its agreed lump sum value.
Prior to counsel commencing their submissions in this matter, the Court was handed a list of the parties’ assets and their agreed values, save for one item, being the value of the wife’s motor vehicle.
When the matter was first listed before the Court in November 2013, there was an issue in relation to the value of the wife’s motor vehicle. The husband argued the Court should accept its “red book” value of $12,400.00. The wife argued the Court should accept the value given her by a Motor Vehicle trader who inspected the actual motor vehicle and valued it at $7000.00.
I was more persuaded by the value given to the wife’s motor vehicle by the motor vehicle trader who had actually seen the motor vehicle in question and ruled that for the purposes of this proceeding, the wife’s motor vehicle is valued at $7,000.00.
Accordingly I find that the pool of assets for division between the parties is as follows:
| Property G | $220,000.00 |
| Husband’s Bank Account | $76,029.00 |
| Wife’s Bank Account | $19,630.00 |
| Husband’s 2001 Falcon Wagon | $10,350.00 |
| Wife’s 2007 Fairlane | $7,000.00 |
| Husband’s Caravan | $1,800.00 |
| Husband’s MG Vehicle | $8,000.00 |
| Wife’s furniture | $3,715.00 |
| Husband’s furniture and Farm Plant and Equipment | $18,480.00 |
| Husband’s antique gun | $16,000.00 |
| Wife’s jewellery | $5,260.00 |
| Husband’s proceeds of sale of motor bike | $3,976.00 |
| Wife’s superannuation | $247,212.00 |
| Husband’s superannuation (lump sum value) | $455,761.02 |
| TOTAL | $1,093,213.02 |
Contributions
The parties marriage was one of 39 ½ years. During the marriage both parties worked and raised their four children. The parties each had very modest assets when they married.
At the commencement of the relationship the husband had been employed as a [omitted] for 5 years. He worked in this profession for a further 17 years before taking an early retirement on stress grounds.
Upon retirement the husband received an indexed pension from his [E] Superannuation entitlement as well as working as a [omitted] earning a modest income on the parties jointly owned property.
The wife was the primary care-taker of the parties’ four children as well as the principal home maker. The wife also worked in part-time or full-time employment for most of the marriage.
It is submitted on behalf of the husband that he should be considered to have made a greater contribution to his superannuation entitlement because of his membership of that fund for 5 years prior to the parties commencing co-habitation. It is argued were it not for that prior contribution the quantum of the pension received to the benefit of the parties during co-habitation and its current lump sum value would not be as great.
The husband did not place before the Court any evidence of the value of his superannuation at the commencement of co-habitation or what impact, if any, his 5 years of pre-cohabitation contributions had on his final entitlements upon early retirement.
It was submitted on behalf of the wife that given the parties very lengthy marriage, the absence of any evidence as to the husband’s superannuation entitlements at the commencement of cohabitation and its impact, if any, on his entitlements upon early retirement, the wife’s role as the primary carer of the parties children, her role as the major home maker and her almost continuous paid employment throughout the marriage, the parties contributions to the totality of their assets, including the husband’s superannuation should be considered equal.
I am very much persuaded by the wife’s submissions. Whilst the husband had been a member of his superannuation fund for a period of 5 years prior to co-habitation, the extent and value of those contributions are unknown as is the impact, if any, those contributions had on his entitlements upon early retirement.
There is a long line of Full Court decisions, including Pierce v Pierce (1999) FLC 92-844, Kardos v Sarbutt (2006) 34 Fam LR550, and Williams v Williams [2007] FamCA 313, which have held that when considering the intial contributions made by parties to their assets the Court must “give due recognition to the myriad of other contributions that each of the parties made during the relationship.”[2]
[2] Para.26 Williams (supra)
In this matter the “myriad of contributions” made by the parties over their lengthy 40 year marriage is such that when balanced each against the other I am satisfied their contribution to their total asset pool is equal.
Section 75(2) Factors
Both parties in this matter are retired. Both have health issues and due to their ages and ill health will not be in a position to return to paid employment. Currently the wife is dependent on Centrelink payments of $17,000.00 per annum and the husband on his [E] pension of $41,465.00 per annum.
The husband is seeking orders that will allow him to retain the former matrimonial home and the full entitlement to his current superannuation pension. The husband also seeks to retain his motor vehicle, caravan, MG motor vehicle, his furniture, farm plant and equipment and his antique gun. The husband also has the benefit of the proceeds of the sale of a motor bike. Orders in the terms sought by the husband would mean the husband would retain 67% of the property pool.
It is submitted on behalf of the husband that to require him to cash in his guaranteed income stream and to become reliant upon social security would be a “heavy handed” way in which to finalise this matter.
It is submitted on behalf of the husband that it is not “his fault” that his superannuation fund will not allow him to split his pension such that he and the wife could both become the beneficiaries of an indexed income stream.
It is further submitted on behalf of the husband that whilst his proposal would result in the wife receiving less than 50% of the total property pool, his proposal would result in the wife receiving considerably more cash than he would which would enable the wife to purchase a home and to have sufficient additional money that she could invest to supplement her Centrelink entitlements.
It was further submitted on behalf of the husband that the wife’s Centrelink payment and resultant benefits such as a health card is a form of income stream and benefits not available to the husband.
It is therefore argued on behalf of the husband that a consideration of these s.75(o) factors are such that the husband’s proposal should be considered just and equitable.
It is submitted on behalf of the wife that to require the wife to live on a government benefit whilst the husband has the benefit of an indexed guaranteed income stream which is more than twice that of the wife’s government pension entitlements is manifestly unjust.
It was submitted on behalf of the wife that any “extra” cash the wife would receive pursuant to the husband’s proposal could not be invested to generate an income stream the equivalent of the husband’s current superannuation entitlements.
It is further submitted on the wife’s behalf that the husband’s superannuation fund allows a splitting order that would provide the wife with a lump sum payment but still enable the husband to receive a guaranteed income stream, albeit it would be reduced in proportion to the percentage split that was payable to the wife pursuant to the order of the Court.
It was further submitted on behalf of the wife that if the husband’s income stream fell below a certain level, the husband may become eligible for a part Centrelink aged pension which would enable him to access the same “additional” benefits that the wife is able to access.
Accordingly it is the wife’s submission there should be no adjustment for s.75(2)(o) factors and that orders should be made that divide the parties’ assets equally between them.
In the matter of Winn (supra) Johnston J declined to make a splitting order in relation to the husband’s superannuation entitlements which were in the payment phase as sought by the wife as he was of the view it was not appropriate in the particular circumstances of that case. In paragraphs 106 to 108 His Honour set out the reasons for his decision not to make a splitting order as follows:
[106] Firstly, there is ample non-superannuation property available to do justice and equity in my view without seeking such an order.
[107] Secondly, the husband's pension is his major source of income and one would be reluctant to reduce this.
[108] Thirdly, the wife has significant superannuation herself. She also has well-paid employment, certainly at a considerably higher level than what I consider the husband could achieve. Such employment will also enable the wife to build up the interest she already has in superannuation. And the wife is much younger than the husband and would appear to have many income-earning years ahead of her, certainly many more than the husband could reasonably expect based on the medical evidence before the court.
Unlike the wife in the matter of Winn (Supra) the wife in this matter is not in a well-paid position or considerably younger than the husband. The wife is 67 years old, retired and in poor health. She is currently living on a very meager Centrelink payment of $17,000.00 per annum.
Whilst I am sympathetic to the husband’s wish to retain the totality of his guaranteed income stream, unlike the parties in the matter of Winn (supra), the parties in this matter do not have sufficient assets to enable the husband to retain the entirety of his superannuation and achieve a just and equitable division of property between the parties, particularly given the husband wishes to also retain the former matrimonial home.
Accordingly orders will be made for an equal division of the parties’ assets. Given the husband wishes to retain the former matrimonial home such order will need to include a splitting order in relation to the husband’s superannuation to enable that equal division of the parties’ assets.
Conclusion
In this matter the parties were married for nearly 40 years. They raised four children and, have, I am satisfied, contributed equally over their long life together to their matrimonial assets.
Both parties are now retired and neither is in particularly good health.
The husband’s superannuation with [E] has been received by him as an indexed pension since his early retirement from [omitted] in 1990.
Despite his having joined his superannuation fund some 5 years prior to co-habitation, it is my finding that the parties’ contributions to all their assets over the totality of their 40 year life together is such that their contributions to all their assets, including the husband’s superannuation should be considered equal.
The husband sought that the Court deal with his superannuation separately to the parties’ other assets. Because the husband’s superannuation fund can be commuted to a known lump sum, this matter can be distinguished from these matters in which the Full Court has held that the preferred approach is to deal with superannuation in the payment phase separately from the parties’ other assets.
Whilst the husband seeks orders that he be permitted to retain his superannuation in its entirety as well as the former matrimonial home, there is insufficient assets to enable a just and equitable division of the parties’ assets if such an order was made.
Given my findings in this matter I am of the view that the just and equitable outcome in this matter is that there be an equal division of the parties assets between the parties. The parties total asset pool is $1,093,213.02. The wife currently has in her control assets to the value of $282,817.00 and the husband has in his control assets to the value of $810,396.00 (including the former matrimonial home).
In order for the husband to retain the assets in his control including the former matrimonial home and his superannuation, the wife must receive a payment of $263,789.50.
It was submitted on behalf of the husband that in the event orders were made by this Court that did not accord with his proposal then he be afforded the opportunity to determine the manner in which he “raised” the money payable to the wife, including what percentage if any of his superannuation entitlement be commuted to enable such payment to occur.
Given my findings in this matter, it is apparent that there will need to be a splitting order made in relation to the husband’s superannuation to enable the wife to receive her half share of the matrimonial assets.
It will be a matter for the husband how much of his current savings he will utilise and how much or what percentage of his superannuation entitlement will need to be subject of a splitting order to enable the wife to receive her share of the matrimonial assets.
An order will therefore be made that the husband is to advise the wife and the Court within 14 days of his decision as to how the wife it to receive her share of the matrimonial assets.
In the event the husband fails to notify the wife and the Court of his decision as to the manner in which the wife is to be paid then a splitting order will be made that the husband’s superannuation be commuted such that from that fund the wife receive a lump sum payment of $263,789.50.
In addition, orders will be made requiring the wife to transfer her interest in the former matrimonial home to the husband and for the parties to otherwise retain all assets currently in their possession.
I certify that the preceding eighty three (83) paragraphs are a true copy of the reasons for judgment of Judge Bender
Associate:
Date: 3 April 2014
Treloar v Treloar(No 2) [2007] FamCA 1127
Edwards v Edwards [2009] FamCAFC 139
Guthrie v Rushton [2009] FamCA 1144
Winn v Winn [2011] FamCA 501
Craig v Rowlands [2013] FamCAFC 45
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