Bannan and Bannan
[2012] FMCAfam 1056
•28 September 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BANNAN & BANNAN | [2012] FMCAfam 1056 |
| FAMILY LAW – Property – contribution – declaration of superannuation interest. |
| Family Law Act 1975, ss.75(2), 79, 90MT,(1)(a), 90SM, 106A |
| Hickey and Hickey (2003) FLC 93-143 In the marriage of Lee Steere (1985) FLC 91-626 In the marriage of Ferraro (1993) FLC 92-335 In the marriage of Clauson (1995) FLC 92-595 Russell and Russell [1999] FamCA 1875; (1999) FLC 92-877 Pierce and Pierce (1999) FLC 92-844 Kowaliw (1981) FLC 91-092 Esposito & Coster [2012] FamCAFC 118 Gosper and Gosper (1987) FLC 91-818 Kessey and Kessey (1994) FLC 92-495 Pellegrino and Pellegrino (1997) FLC 92-789 |
| Applicant: | MS BANNAN |
| Respondent: | MR BANNAN |
| File Number: | NCC 1366 of 2010 |
| Judgment of: | Myers FM |
| Hearing date: | 17 July 2012 |
| Date of Last Submission: | 17 July 2012 |
| Delivered at: | Newcastle |
| Delivered on: | 28 September 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Graham |
| Solicitors for the Respondent: | BTF Lawyers |
ORDERS
That all previous orders be discharged.
That within 14 days from the date of these orders the applicant wife and the respondent husband do all acts and things and sign all documents necessary to list the former matrimonial home situated at and known as “[B]” via [omitted] being the whole of the land being contained in [lots omitted] to be listed for sale with the with a real estate agent as agreed between the parties and failing agreement with the office of The Professionals Real Estate nearest in geographical location to the said former matrimonial home.
That within 7 days the parties do all acts and things to authorise, direct and assist [company and address omitted], to prepare contacts for and act on the sale of the said former matrimonial home.
That the sale price of the said former matrimonial home shall be as agreed between the parties within seven (7) days from the date of these orders and failing agreement as advised by a Valuer nominated by the President of the Real Estate Institute of New South Wales.
That should the former matrimonial home fail to have sold by private treaty within 12 weeks from the date of these orders, or such other time as agreed between the parties in writing, then the parties will do all acts and things an sign all documents necessary to cause the said former matrimonial home to be sold by public auction on the 17th Saturday following the making of these orders or at such other time as agreed between the parties in writing.
That should the said former matrimonial home fail to sell at the auction contemplated at order 5 above the parties will do all acts and things and sign all documents necessary to cause the former matrimonial home to be auctioned on the 4th Saturday following the preceding auction and then every 4th Saturday thereafter until the said former matrimonial home is sold.
That the reserve price of the first auction shall be as agreed between the parties in writing and failing agreement at a price suggested by the auctioneer engaged by the real estate agent nominated pursuant to order 2 above, and the reserve price of every subsequent auction shall be 2.5% blower than the reserve price of the immediately preceding auction.
That pending the settlement of the sale of the former matrimonial home the wife shall have the right to exclusive occupancy of the said former matrimonial home to the exclusion of the husband subject to her paying mortgage payments when they fall due, council rates and household building insurances.
During the period of the wife’s exclusive occupation the wife shall keep the former matrimonial home in a clean and tidy condition and in good state of repair having regard to its present condition allowing all agents and prospective purchases to inspect the former matrimonial home at all reasonable times.
On completion of sale the proceeds be disbursed as follows:
(a)Payment of agents commission, advertising expenses and legal expenses of the sale;
(b)Rates adjustments;
(c)Discharge of mortgage to the Commonwealth Bank of Australia, mortgage number: BSB [omitted] account number: [1];
(d)Payment to the following Commonwealth Bank loans:
(i) Personal loan BSB [omitted] account number [2];
(ii) Personal loan BSB [omitted] account number [3];
(iii) BSB [omitted] account number [4];
(e)Subject to order 11 below the residue from the sale if any to be paid to the wife.
Seven (7) days following the exchange of contracts for the sale of the said former matrimonial home the parties shall instruct [omitted] to obtain a payout from the Commonwealth Bank of the loans listed at orders 10(c) and 10(d) above, and make enquiries to ascertain the quantum of the other liabilities listed at orders 10(a), and 10(b) above and thereafter provide the parties with an estimate for any net proceeds from the sale or shortfall on the sale. Where there is a shortfall on the sale the parties shall be equally liable for any shortfall taking into account all those liabilities listed at orders 10(a) – 10(d).
That where the parties are advised by [omitted] that there will be a shortfall on the sale, the parties are within 7 days of such notification arrange to obtain fund necessary to pay out half of any shortfall equally and 7 days prior to settlement of the sale the parties are to pay into the trust account of the said conveyancer one half of the estimated shortfall and irrevocably authorise and direct the said conveyancer to use such funds to payout the liabilities listed at orders 10(a) – 10(d) on settlement of the said former matrimonial home.
That should the estimate given to the parties pursuant to order 11 above be insufficient to allow for a payout of the liabilities listed at orders 10(a) -10(d) on settlement then the parties shall equally contribute to any further shortfall. Where there is a surplus of funds paid into the trust account by the parties pursuant to order 12 above such surplus shall be paid equally between the parties.
That the husband indemnify and keep indemnified the wife against any claims, demands or proceedings which may be instituted against her as a result of the wife having acted as a director of companies operated by the husband and otherwise each party indemnify the other against all actions, suites, claims or demand in relation to any other liabilities standing in that parties name or any other liability encumbering any item of property to which that party is entitled.
That within 7 days from the date of these orders the husband cause a letter to be forwarded to the trustee of wife’s superannuation fund namely Employer Agreed Superannuation Plan operated by [H] providing the wife’s superannuation fund with procedural fairness of orders in the terms set out at order 2 of the husband’s Response to Initiating Application files 10 May 2012 that provide for a payment of $10,000.00 from the wife’s superannuation by way of splitting order.
That the matter be adjourned to a date to be fixed by the court so as to allow sufficient time for procedural fairness to be afforded to the wife’s superannuation trustee and the wife’s cost of such adjournment shall be reserved.
That upon the matter coming back before the court following the adjournment the court will consider whether procedural fairness has been afforded by the husband to the wife’s superannuation trustee and will thereafter consider any response received by the wife’s superannuation trustee and make orders for a splitting order paying $10,000.00 from the wife’s superannuation interest to the husband pursuant to section 90MT(1)(a) of the Family Law Act1975.
That otherwise as provided for in these orders each party be declared to be the sole beneficial owner of all items of property including chattels, goods, furnishings and other property which at the date of the orders are in that parties possession, monies and other investments which stand in that parties name, any motor vehicles in that parties name and their respective superannuation entitlements.
That in the event either party refuses to or neglects to execute any document or instrument including real property transfer, within 7 days of a written request to do so, necessary to give effect to these orders a Registrar of this Court is appointed pursuant to the provisions of section 106A of the Family Law Act1975 to execute such documents on behalf of the party who has refused or neglected to execute such document or instrument and do any other acts or things necessary so as to allow for the operation of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Bannan & Bannan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1366 of 2010
| MS BANNAN |
Applicant
And
| MR BANNAN |
Respondent
REASONS FOR JUDGMENT
Applications
This is a matter in which the applicant wife Ms Bannan makes application for orders for a property settlement pursuant to s.79 of the Family Law Act . The applicant wife caused to be filed her initiating application in the Newcastle Registry of the Family Court of Australia on 18 October 2010. On 6 December 2010 Registrar McFadden made orders transferring the proceedings to the Federal Magistrates Court of Australia. The applicant also caused to be filed an application for Divorce on 18 October 2010. The Divorce application was adjourned until 18 January 2011 as there had been no evidence of service. The Divorce came before Registrar Cater-Smith on 18 January 2011 and was adjourned until 23 February 2011 on which date Federal Magistrate Lapthorn dealt with the application for divorce granting the application which was to become effective one month from 23 February 2011.
After a number of adjournments the matter came before the court on 28 May 2012. On this date the matter was set down for hearing on 17 July 2012 at 10.00 am. At the hearing the applicant was represented by Mr Graham of counsel and the respondent by Ms Bilbie-Taylor solicitor. The applicant sought to rely upon the following documents in support of her case:
i)Amended application filed 3 May 2012;
ii)Financial statement filed 2 July 2012;
iii)Affidavit sworn by Ms Bannan on 2 July 2012 filed the same day.
I have read and considered the documents filed by the wife. In the wife’s initiating application she sought orders for the sale of a property known as [B] (the former matrimonial home) via [omitted] being the whole of the land being contained in [lots omitted], as well as orders that [omitted] be appointed to act on the sale, the former matrimonial home be sold by private treaty with The Professionals Real Estate being nominated to sell the former matrimonial home property and that the former matrimonial home be listed at a price nominated by the wife in accordance with orders previously made by this court on 12 October 2011. Further orders were sought that in the event the property had not been sold by 31 September 2012 then the property was to be sold at auction with the reserve price set by the wife pursuant to orders of the court made on 12 October 2011.
The wife further sought orders that she have the right to occupy the former matrimonial home to the exclusion of the husband subject to her paying council rates and building insurances when they fall due and that she keep the former matrimonial home in a clean and tidy condition and in good state of repair having regard to its present condition and allowing all agents and prospective purchases to inspect the former matrimonial home at all reasonable times. The wife sought that on completion of sale the proceeds be disbursed as follows:
a)Payment of agents commission, advertising expenses and legal expenses of the sale;
b)Rates adjustments;
c)Discharge of mortgage to the Commonwealth Bank of Australia, mortgage number: BSB [omitted] account number: [1];
d)Payment to the following Commonwealth Bank loans:
i)Personal loan BSB [omitted] account number [2];
ii)Personal loan BSB [omitted] account number [3];
iii)BSB [omitted] account number [4];
e)The residue from the sale to be paid to the wife.
The Wife sought orders that the husband indemnify the wife against any claims, demands in the proceedings which may be instituted against her as a result of the wife having acted as a director of companies operated by the husband and otherwise each party indemnify the other against all actions, suites and claims of demand in relation to any other liabilities standing in that parties name or any other liability encumbering any item of property to which that party is entitled. Additionally an order was sought that otherwise as provided for the orders each party be declared to be the sole beneficial owner of all items of property including what are termed as any chattels, goods, furnishings and other property which at the date of the orders are in that parties possession, monies and other investments which stand in that parties name, any motor vehicles in that parties name and their respective superannuation entitlements.
The wife initially sought an order that the parties do all acts and things and do all things necessary to give effect to the orders made and further the wife sought orders pursuant to section 106A of the Family Law Act1975.
Prior to the commencement of the hearing the wife caused to be filed an outline of case document which I have read and considered.
The husband caused to be filed:
a)A response to initiating application on 10 May 2011;
b)Financial statement sworn by him on 18 June 2012;
c)Affidavit sworn by him on 26 May 2011.
The husband relies on those documents in support of the orders sought by him together with an outline of case document filed prior to the commencement of the hearing. I have read and considered the documents filed on behalf of the husband.
In the husband’s response filed on 10 May 2011 he sought the following orders:
i)The property at [B], known as the former matrimonial home be sold;
ii)The price be as agreed between the parties and failing agreement as advised by a valuer nominated by the President of the Real Estate Institute of New South Wales;
iii)The former matrimonial property be listed for sale by private treaty with an agent to be agreed between the parties;
iv)In the event the former matrimonial home had not been sold before a date three months following the date of listing then the parties do all things necessary, pay money equally to procure a sale of the said former matrimonial home by public auction on the following terms:
(i)The auctioneer be appointed by the agent appointed to the sale of the former matrimonial home by private treaty;
(ii)The auction take place within three months after the dead line date of the sale by private treaty;
(iii)The reserve price shall unless agreed upon by the parties be as proposed by the auctioneer;
(iv)The parties each pay and be responsible for one half of the auction expenses payable before the former matrimonial home is auctioned;
(v)In the event the former matrimonial home is not sold by auction or by private treaty within 14 days after the auction then the parties shall do all acts and sign all documents necessary, pay all monies equally so as to procure a second auction within a further five weeks of that date upon the same terms and conditions as applied in the first auction.
The husband sought orders that upon the completion of the sale the former matrimonial home the proceeds be applied as follows:
a)Pay all costs of sale including agents and solicitor’s costs if any;
b)Pay the costs of the auction if any;
c)Pay the costs of any valuation;
d)Make all payments necessary to discharge the mortgage;
e)Pay all outstanding rates and charges on the property; and
f)The proceeds available pay 70% to the husband and 30% to the wife.
A further order was sought pursuant to section 90MT(1)(a) of the Family Law Act1975, seeking a split to $10,000.00 to the husband from the wife’s superannuation interest. It was apparent at the commencement of the hearing that the husband had failed to accord the trustee of the wife’s superannuation fund procedural fairness.
The husband sought further orders that otherwise as provided for in the orders each party retain all items of property in their possession including but not limited to superannuation, cash, monies contained in bank accounts, motor vehicles, furniture, jewellery, personal belongings and house contents. That each party be responsible for all debts in their name and further, and orders pursuant to section 106A of the Family Law Act1975.
Background
The applicant wife was born [in] 1965 and at the date of the hearing is aged 47 years.
The respondent husband was born [in] 1964 and at the date of the hearing was 48 years.
The wife asserts the parties commenced cohabitation in on or about 1994. The husband says the parties commenced cohabitation in 1991. During the course of cross examination of the husband by the counsel for the wife it was put to the husband that his assertions that cohabitation commenced in 1991 were not true. The husband conceded that in his mind cohabitation could have commenced somewhere between 1991 and 1993 but that he could not be sure stating that he was “not strong on dates”.
It was not put to the wife during the course of her cross examination by the solicitor for the husband that the date of cohabitation as asserted by the wife in her affidavit was incorrect. At Paragraph 5 of the wife’s affidavit filed 2 July 2012 she sets out that the parties commenced courting in the year of 1992 or 1993 and that they commenced co-habitation in 1993 or 1994. I find that the parties commended cohabitation in or about 1993. The wife asserts in 1992 she purchased a unit at Property T for the sum of $90,000.00 borrowing funds from the St George Bank in the sum of $81,000.00 secured by way of mortgage over the property. The husband asserts that in about 1992 he was earning the sum of $700.00 to $900.00 per week net as a [omitted]. No retrospective valuation was provided for the property at Property T as at the time the parties commenced cohabitation in 1993.
On 23 June 2001 the parties married. The wife asserts at paragraph 9 of her affidavit that she had superannuation as at 15 December 1993 worth $3634.52. The husband deposes in his affidavit that in about 2002 he represented Australia at [omitted] and that after coming home from [omitted] he asked the wife what it was that she wanted to do with their lives. The husband deposes at paragraph 9 of his affidavit that the wife said that she wanted to move to the country and buy a farm.
The parties agree in 2002 the Property T was sold. The court notes that in the husband’s affidavit he referred to the unit in [T] as “our flat”. The court finds that the flat or more correctly put, the unit at Property T was in fact owned by the wife and held in her name solely. At Paragraph 10 of the wife’s affidavit she deposed the unit at Property T was sold for the sum of $155,000.00 and from the proceeds of sale the following was paid:
a)Approximately $3,500.00 paid in agents commission;
b)Approximately $1,500.00 paid in legal fees;
c)Approximately $70,000.00 paid to discharge the mortgage.
The wife deposes that the mortgage over the Property T unit had been extend from the time the she and the husband cohabitated to pay for some of the husbands expenses and a motor vehicle for her father. The court notes that as there was no cross-examination of the wife in respect to such expenses and the court cannot make a finding with respect to the use of any amount which may been extended on the mortgage, other than to accept that the mortgage was extended and used for join purpose by the parties.
The wife states a net sum of $80,000.00 was received from the sale of the Property T unit. At paragraphs 15-18 of the wife’s affidavit she asserts at the commencement of the relationship the husband owned a Holden sedan, which the wife deposes, was stolen a few weeks after she and husband commenced cohabitation. The wife asserts the husband said to her on or about 1994 “I purchased this old car for a few hundred dollars”. The wife was unaware whether the car was insured and deposed that the husband owned a few bags of clothes. The wife deposes at the time of co habitation the husband was unemployed and she could not recall any other assets.
The husband deposes in 2003 the parties moved to a small town called [W] where the parties rented a home for a short period of time whilst the parties where looking to purchase a farm.
The husband deposes at paragraph 14 of his affidavit, that the court notes was not challenged during the course of cross examination, that the parties purchased at the end of 2003 a farm property located [B] (the former matrimonial home) which remains owned by the parties in joint names at the date of the hearing.
The husband deposes the former matrimonial home was purchased for the sum of $90,000.00.
At paragraph 11 of the wife’s affidavit she deposes that from the sum of $80,000.00 from the net proceeds of the sale of the property at Property T the money was dispersed as follows:
a)The sum of $18,000.00 paid for the deposit together with $2,000.00 being stamp duty on the purchase of the former matrimonial home at [B];
b)The sum of $1,500.00 was paid out for legal fees being those costs and disbursements associated with the purchase of the former matrimonial home.
c)The sum of $2,200.00 was paid off the husband’s motor bike and a further sum of $11,000.00 was used to purchase a new motor bike.
d)The sum of $2,200.00 was used to pay a personal loan to the Community Credit Union.
The wife deposes that contained within the property at Property T was a household full of furniture including lounge suite, dining room suite, bedroom suite, linen, crockery and cutlery and all the necessities to live comfortably in the apartment. The wife does not seek to assign any value toward the items of what can be best described as furniture or furnishings contained within the property at [T].
The husband deposes that prior to moving to [W] he was working as a [omitted] earning approximately $700-900 a week after tax and that he kept approximately $100.00 to $200.00 from his earnings a week and gave the rest of the money to the wife. The wife deposes at paragraph 13 of her affidavit that prior to moving to [W] she was working full time with [omitted] working as a [omitted] and that she was earning approximately $45,000.00 to $50,000.00 per year and as part of her employment package she was able to use a company motor vehicle. The wife further deposes at the commencement of the relationship she was studying full time at the [omitted] undertaking a graduate diploma in [omitted].
The husband deposes that following the parties move to [W] in 2003 the wife was able to obtain a transfer with her work to the [omitted] office. The court notes the husband deposes the wife was working at [omitted]. The court accepts the wife was not working for [omitted] but rather [omitted]. The husband deposes after moving to [W] he looked for work as a [omitted] but as the town was not big and did not have the industry that Sydney had he was unable to find work. The husband deposes that he subsequently obtained work with a [omitted] company doing things such [omitted] and undertaking what the husband terms as “any work he could get”.
It is apparent having read the parties affidavits and having heard the parties’ evidence during the course of cross examinations that the initial mortgage obtained by the parties for the purchase of the [B] property was extended. The court notes at paragraph 19 of the husband’s affidavit he deposes that the parties “took out a loan on the mortgage of $50,000.00 to $60,000.00 in 2007”.
During the course of the husbands cross examination it was put to him that he had “an extensive criminal history” and that it was necessary for the husband to engage solicitors with respect to the husband having been charged by the police. The husband conceded that the mortgage was extended in 2007 in the sum of between $50,000.00 to $60,000.00 to pay a solicitor who had acted for the husband in some criminal matters.
Initially at the outset of the hearing the husband conceded that the mortgage had been increased for the purposes of paying legal costs associated with the husband having been charged with various criminal matters but disputed that 3 loans in the wife’s name solely being Commonwealth Bank BSB [omitted] account [3], Loan BSB [omitted] account [4] and loan BSB [omitted] account [2] were in whole matrimonial liability and that only half of the total amounts owed on those loans being a total of $24,139.55 equating to $12,069.77 should be attributed as being matrimonial liabilities.
At paragraphs 26 (a)-(c) the wife deposes that the 3 Commonwealth bank loans were taken out for the purposes of paying the husbands legal fees and in particular loan account number [3] and loan account number [4] were taken out for the purposes of paying the Husband’s solicitor engaged in representing the husband in respect of criminal charges and the third loan account number [2] was taken out for the purposes of paying legal fees to Australian Defamation Lawyers.
During the course of cross examination the husband conceded that he did not understand the parties had borrowed money after the extension of the mortgage for purposes of paying legal fees but that he did not have a complete understanding of the parties finances and thus might be mistaken when his solicitor sort to argue that only half the amounts borrowed under the personal loans should be taken into account as matrimonial liabilities of the parties. Having regard to the evidence of the parties and regard to those documents tendered during the hearing being the criminal records and documents produced by NSW Police forming exhibit C in the proceedings and the bundle of documents tendered forming exhibit D in the proceedings being Commonwealth Bank statements and statements of account of the husbands solicitor the court finds that the three Commonwealth Bank loans are matrimonial liabilities.
At paragraph 6(b) the wife deposes to evidence with respect to borrowing $10,000.00 from her mother to assist with legal cost to be paid to the husband’s solicitor Paul Blunt. The court notes that no monies had been repaid to the wife’s mother and further that the wife’s mother has passed away as a result of breast cancer in [omitted] 2012. Based upon the limited evidence available to the court the court is unable to make any finding that there are or were ever any monies due or payable to the wife’s mother or for that matter due to the wife’s late mother’s estate. Such finding is made in circumstances where there is no loan documentation, no history of repayment and no call by an executor or trustee of the estate upon the parties to pay such sum prior to or at the date of the hearing. In this regard I note the decision in Gosper and Gosper (1987) FLC 91-818, Kessey and Kessey (1994) FLC 92-495 and Pellegrino and Pellegrino (1997) FLC 92-789.
It is apparent from the husband’s document that he contends the parties separated in on or about September 2008. The wife contends that she advised the husband on 9 April 2009 that the marriage was over. Having regard to the husband’s concession during cross-examination that he was “not strong on dates”, it would be easily open for the court to find that the date of separation occurred in April 2009. However having reviewed the wife’s application for divorce file by the wife in the court on 18 October 2010 sworn by the wife on 10 October 2010 the court finds that separation occurred on or about 11 September 2008 in circumstances where the wife represented in Application for Divorce that date as being the date of separation.
At paragraph 27 of the wife’s affidavit she contends that at the time of separation she had superannuation valued at approximately $59,888.02. The court notes for the purposes of the hearing the parties agreed that the wife’s superannuation interest should be assessed by the court as being worth $56,303.00. Such value is supported in part by the documents tendered on behalf of the wife being a letter of the Wife’s superannuation fund [H] dated 25 June 2012 that forms exhibit A in the proceedings. Whilst the court notes the agreement the court must still have regard to the fact that the wife discloses in her financial statement that the total of her superannuation interest equates to $92,616.10.
The wife contended and it is not disputed by the husband that between 1999 to 2006 the wife worked for [omitted] and from 2007 to date the wife has worked for [omitted]. As at the date of the hearing is was contended by the wife that she earns approximately $1556.00 per week before tax working at [omitted] as set out in the wife’s Financial Statement filed 2 July 2012.
The husband had contended in his case outline and affidavit that between 1992-1999 he had worked as a [omitted] and had contributed $500 - $700 per week to the wife, between 2000 – 2003 the husband worked for [omitted] and contributed $1,000 net per week to the wife, between 2003 – 2008 the husband worked in a [omitted] business and [omitted], between 2009 – 2011 the husband was unemployed and from May 2012 onwards the husband has been working in employment with [omitted] earning approximately $800.00 per week net. During the course of the cross examination of the husband stated that he was working for most periods during the relationship and that the greatest period he was ever not employed was for a period of three months. The court interestingly noted that the husbands most recent Financial Statement filed on 18 June 2012 listed the husband’s superannuation entitlements at Part J as being an accumulated interest fund held with [omitted] in the sum of $218.00. During cross-examination the husband conceded that given his work he should have a fair amount of super but did not know where it was agreeing that he could have ten to a dozen different super funds, which the court notes, were not disclosed by the husband at the time of the hearing.
Having regard to the husbands evidence with respect to the length of his employment and having hear the submission of counsel for the wife with respect to the compulsory payment of superannuation since the introduction of the Superannuation Guarantee, that the court takes judicial notice was introduced by the Keating Labor government in 1992, the court finds that the husband is likely to have a pool of superannuation that is significant but less than equal in value to the figure of $56,303.00 agreed between the parties as the value of the wife’s superannuation interest for the purposes of the hearing.
In Hickey and Hickey (2003) FLC 93-143 the full bench of the Family Court comprising Nicholson CJ, Ellis and O’Ryan JJ considered in additional to other issues whether the court has the power pursuant to section 79 or 90SM of the Family Law act to make a declaration as to the value of a parties superannuation interest and at paragraph 97 found the court has such a power. The full court then considered if the court was availed of the power to make such a declaration should the court make a declaration and held at paragraph 97:
“Yes in so far as it is desirable in the particular circumstances of the case. However as a matter of law it is not necessary as far as it does not purport to alter an interest”.
The court notes that counsel for the wife has referred to the case of Phillips in the wife’s outline of case document. The case was wrongly referenced as being found at 92: 104. The correct citation is [2002] FamCA 350; (2002) FLC 93-104. No submissions were made with respect to the decision of the full bench of the Family Court comprising Finn, Kay and O’Ryan JJ. The court notes the principles within the case that where a trial judge is unable to prefer one opinion as to value over another the judge may determine value having regard to the evidence and the proper principle. While no submissions were made with respect to the case by counsel such case does in part support the court making a declaration with respect to the value of the husbands superannuation interest.
Based upon the above the court declares that the husband has a notational superannuation interest worth $40,000.00.
The Court notes that the husband had purchased a Toyota Hilux post separation. The court notes that there was no dispute as to the value of the Hilux. The husband has disclosed in his financial statement a post separation credit card liability accrued in his sole name in the sum of $7,500.00. The quantum of that liability was not disputed at the hearing.
The Law
In determining property proceedings the court is required to conduct a four step process. The first step is to identify and value the assets, liabilities and financial resources of the parties at the time of the hearing. The second step requires the court to consider the parties contributions and consider any adjust that should be made between the parties. The Third step requires the court to consider the actual circumstances of the parties and make adjust for those circumstances considering a variety of factors set out at section 75(2) of the Family Law Act 1975. Lastly step four requires the court to satisfied itself that the actual effects of the orders are just and equitable.
The approach the court is required to adopt in determining an application under section 79 of the Family Law Act1975 for adjustment of property interests is well established by authority (In the marriage of Lee Steere (1985) FLC 91-626, In the marriage of Ferraro (1993) FLC 92-335, In the marriage of Clauson (1995) FLC 92-595).
During the hearing the court will sometimes utilising the evidence of experts such as valuers agreement between the parties or the making findings upon the evidence presented to identify and value the property, liabilities and financial resources. The court then considers the contributions made by the parties as defined in section 79 (4)(a) to (c). Thirdly the court must consider the future needs of the parties by having regard to the provisions of section 75(2) in so far as they are relevant. Finally in determining what order the court should make the court must be satisfied in all of the circumstances that it is just and equitable to make the order as required by section 79(2). It is the justice and equity of the actual orders that the court must consider Russell and Russell [1999] FamCA 1875; (1999) FLC 92-877).
The property of the parties
At the date of the hearing counsel tendered on behalf of the wife a valuation of the property situated at and known as [B] which has been referred to throughout this judgement as the former matrimonial home. That valuation forms exhibit B in the proceedings. The valuation is dated as at the date of inspection on 15 June 29012 and values the said property on a market value basis at $120,000.00.
I find from the evidence that the assets of the parties are as follows:
| ASSETS | POSSESSION | VALUE |
| Matrimonial home | Joint | $120,000.00 |
| Bank accounts | Negligible for H & W | Nil |
| Superannuation | Wife Husband (Notional) | $56,303.00 $40,000.00 |
| Motor vehicle Toyota Hilux | Husband | $8,000.00 |
| Household contends | Negligible for H & W | Nil |
| TOTAL ASSETS | $224,303.00 |
| LIABILITES | ||
| Mortgage CBA | Joint | $138,085.77 |
| Personal Loan [2] CBA | Wife | $3,919.02 |
| Personal Loan [3] CBA | Wife | $17,323.22 |
| Personal Loan [4] CBA | Wife | $6,816.33 |
| CBA Credit Card | Husband | $7,500.00 |
| TOTAL LIABILITIES | $166,828.01 |
| TOTAL NET VALUE | $57,474.99 |
Contributions
I now embark on the second step in the exercise under s.79, namely an assessment of the parties contributions within the context of s.79(4)(a) to (c). These provision provide as follows:
Section 79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
(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;
(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;
(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.
At the commencement of the relationship the wife was the owner of a unit at Property T. The wife’s evidence that is accepted sets out that she purchased the unit in 1992 for the sum of $90,000.00 borrowing funds from the St George Bank in the sum of $81,000.00 secured by way of mortgage over the [T] property. In this regard the wife has equity in the unit at the time of purchase of some $9,000.00. As previously stated there is was no evidence presented as to the value of the unit as at the time of the commencement of the relationship in 1993. The wife asserts at paragraph 9 of her affidavit that she had superannuation as at 15 December 1993 worth $3634.52.
It is apparent that the husband had little property other than a motor vehicle of little value and some chattels perhaps only consisting of a bag of clothes at the commencement of the relationship.
I do not ascribe much weight to this initial contribution. The Full Court of the Family Court in Pierce and Pierce (1999) FLC 92-844 at paragraph 28 said as follows:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution,…………..,, regard must be had to the use made by the parties of that contribution.”
In the decision of Kowaliw (1981) FLC 91-092. the Full Court of the Family Court held that financial losses incurred by the parties or either of them in the course of their marriage should be shared by them (although not necessarily equally) unless one of the parties has embarked upon a course of conduct designed to reduce the value of the assets or where one of the parties has acted recklessly, negligently or wantonly with the assets causing a reduction or minimisation of their value. This is often referred to as ‘waste’.
Whilst the court finds that monies in the sums of ten of thousands of dollars were expended paying the husband’s legal costs associated with him having committed what are best termed criminal offences, in respect of Apprehended Violence order proceedings, and paid to defamation lawyers, those costs were incurred with the knowledge of the wife. Indeed the wife appears to have been on notice of the husband’s behaviour or alleged behaviour during the course of the relationship and whilst being on notice of the husband’s propensities and with the knowledge of the husband’s ongoing costs of litigation in the courts the wife chose to remain in the relationship.
It is not really clear whether the parties undertook any real work of great worth to the former matrimonial. There is no evidence before the court that would give rise to the court making an adjustment for non-financial contribution made by the parties to the acquisition, conservation or improvement of the parties’ property.
The court notes that there are no children of the marriage, and finds that there is insufficient evidence that would allow the court to make an adjustment for contributions made by a parties to the welfare of the family in their capacity as homemaker.
Weighing up the various contributions of the parties the court finds that an adjustment ought be made in the wife’s but only of 2.5%.
Section 75(2) factors
Having determined the contribution elements the court is required to have regard to the provisions of section 75(2).
The matters to be so taken into account are -
a) The age and state of health of each of the parties;
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;
c)Whether either party has the care or control of a child of the marriage who has not obtained the age of 18 years;
d)Commitments of each of the parties that are necessary to enable the parties to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
e)The responsibilities of either party to support any other person;
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 any other 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;
g)Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
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;
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;
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;
l)The need to protect a party who wishes to continue that party’s role as a parent;
m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
(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;
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.
It is apparent having considered the evidence that at the date of the hearing the husband was 47 years and the wife 46 years and that the parties are in equally good health.
As at the date of the hearing the parties were both employed and respectively earn from their employment an amount that is not disproportionately greater or smaller than the other.
The court notes that while the parties have agreed on the value of the wife’s superannuation for the purposes of the hearing, the wife does however have some $36,313.10 in superannuation greater than that agreed between the parties. This amount should in the view of the court be properly classed as property and dealt with when considering what adjustment ought be made between the parties based upon their respective contributions. The excess superannuation figure of $36,313.10 is not a financial resource of the wife. The husband conceded during the course of cross-examination that he had superannuation greater than that as stated in his financial statement. The court has made a declaration as to the value of the husband’s superannuation for the purposes of determining these proceedings. Whatever superannuation the husband actually holds is likewise not in the view of the court a financial resource, it is matrimonial property.
Based upon the above the court finds the most appropriate way to deal with the issue apportionment of superannuation between the parties is to make a final adjustment pursuant to section 79(2).
The court is satisfied that the parties have the physical and mental capacity for appropriate gainful employment.
The parties do not have a child nor is there evidence before the court that they have commitments necessary to enable the parties to support either party or a child or other person.
There is no evidence before the court with respect to either party being eligible for a pension and the court is satisfied that the parties each will afford a standard of living that in all the circumstances is reasonable.
The court finds that the proposed orders of the parties will have a nil effect on external creditors. Further there is no evidence before the court with respect to the parties’ cohabitating with any other person.
The court notes that the parties had not entered into a binding financial agreement.
There are no further facts or circumstances in the opinion of the court the justice of the case requires to be taken into account. While noting the difficulties making any findings about whether an adjustment ought to be made in either parties favour with respect to superannuation as a financial resource the court finds that there should be no adjustment made between the parties with respect to section 75(2).
Section 79(2) – just and equitable
The fourth stage of the process is to step back and assess whether in all of the circumstances it is just and equitable to make the orders as proposed.
I have previously referred to the case of Russell and note that similarly in Esposito & Coster [2012] FamCAFC 118 the full court comprising Coleman, Thackray & Ainslie-Wallace JJ at paragraph 66 looked at the scope of section 79(2) and stated:
“The section does however oblige the court to “stand back” from its preliminary determination, and consider its impact. So doing may inform the terms of the orders appropriate to produce a just and equitable outcome in those terms. It may result in a re-consideration of s 79(4) and or s 75(2) factors, and a different outcome. Whatever the scope of s79(2), the court’s determination with respect to it cannot be dependent upon findings or conclusions which are irreconcilable with those recorded in the context of a consideration of s 79(4) or s 75(2)”.
If the court simply applied the adjustments to the pool of assets determinable by the when taking into account the parties contributions pursuant to section 79(4) and those factors at section 75(2) the effect of the orders would see the former matrimonial home sold, the first mortgage paid out with only some of the remaining balances owed on the three individual loans with the Commonwealth Bank being paid. The court notes and indeed finds that the three loans were taken out for joint matrimonial purpose namely paying the husbands legal costs. While the court noted that the wife chose essentially to remain in the relationship with the husband this is intended more as an observation rather than a criticism. It is apparent that there will be a shortfall occasioned upon the sale of the former matrimonial home. It is the view of the court that in order to properly ensure that the orders are just and equitable the shortfall should not be sheeted home solely to the wife. It must be shared equally between the parties.
When determining whether there should be any adjustment between the parties with respect to superannuation the court has found that the husband has accumulated superannuation of a far greater amount than that disclosed in the husband’s financial statement. While the court could take into account the probably pool of superannuation the husband holds as a financial resource pursuant to section 75(2)(b) it is not correct to do so as the husbands superannuation is properly to be classed as matrimonial property as opposed to a financial resource.
It is the view of the court having heard the cross examination of the husband and the submissions put by counsel for the wife in some way trying to extrapolate a likely figure for the husbands superannuation based upon the length of his employment, possible earnings and the superannuation guarantee amount that the husband’s declared superannuation figure is well less than the superannuation the wife currently holds as disclosed in her financial statement of $92,611.10 and the court has made a declaration that the husband’s superannuation interest is $40,000.00.
In the circumstances of this case the court cannot ignored the pool of superannuation held by the husband in respect of which the court has made a declaration. It would be unjust and inequitable to simply make orders allowing for an adjustment from wile’s superannuation interest by way of splitting order in circumstances where the court took the husband’s superannuation to be $218.00 as disclosed in the husband’s financial statement. Likewise it would be unjust and inequitable to make an adjustment of the wife’s superannuation interest to the husband based solely upon the agreed figure assigned to the wife’s superannuation.
The court considers that in orders to ensure the effect of the orders are just and equitable there should a small adjustment of the wife’s superannuation interest to the husband. The adjustment sought by the husband in the sum of $10,000.00 would allow the court to conclude that the orders were fair and equitable and in such circumstances the court finds that upon the trustee of the wife’s superannuation fund having been afforded procedural fairness the sum of $10,000.00 should be paid from the wife to the husband from the wife’s superannuation entitlement by way of splitting order.
Conclusion
Having regards to the assets and liabilities of the parties, having considered each party’s contributions pursuant to section 79(4), what adjustment should be made when considering those factors at section 75(2) and making adjustments to the orders after considering whether the effect of the orders are fair and equitable in accordance with s.79(2) the court makes the orders set out in the beginning of this judgment.
I certify that the preceding seventy six (76) paragraphs are a true copy of the reasons for judgment of Myers FM
Date: 28 September 2012
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