Bar & JMR (No. 2)
[2005] FamCA 386
•19 May 2005
[2005] FamCA 386
FAMILY LAW ACT 1975
FAMILY COURT OF AUSTRALIA
AT MELBOURNE
[2005] FamCA 386
IN THE MARRIAGE OF:
BAR
(Husband)
and
JMR
(Wife)
(No.2)
JUDGMENT DELIVERED BY
THE HONOURABLE JUSTICE YOUNG
Date of Hearing: 30, 31 March and 15 April 2005
Date of Judgment: 19 May 2005
Appearances: Mr Davis of counsel for the applicant husband
Mr Sweeney of counsel for the respondent wife
INDEX
LEGAL REPRESENTATION
SUPERANNUATION – BACKGROUND
CHANGE IN HUSBAND’S SUPERANNUATION FUNDS
HEARING OF 15 SEPTEMBER 2004
ORDERS SOUGHT BY HUSBAND
ORDERS SOUGHT BY WIFE
WIFE’S OUTLINE OF ARGUMENT – ORDERS SOUGHT
AFFIDAVITS IN EVIDENCE
WRITTEN SUBMISSIONS
SHORT HISTORY
PREVIOUS ORDERS
STANDARD OF PROOF
OBSERVATION OF PARTIES AND WITNESSES
FAMILY LAW ACT 1975 (CTH), S.79 AND RELEVANT CASE LAW
SECTION 75(2) FACTORS
WIFE’S PROPERTY DEALINGS AFTER SEPTEMBER 1999
HUSBAND’S PROPERTY DEALINGS AFTER SEPTEMBER 1999
CHILDREN
CHILD SUPPORT
WIFE’S EMPLOYMENT
HUSBAND’S EMPLOYMENT
LONG SERVICE LEAVE – HUSBAND
Ms W
HUSBAND’S FUTURE RETIREMENT
ESS PLAN
EFFECT OF CEASING CONTRIBUTIONS TO ESSS
ESSS – A GENEROUS FUND
SUPERANNUATION – IS IT PROPERTY?
FAMILY LAW ACT – PART VIIIB – SUPERANNUATION SPLITTING ORDER
FAMILY LAW (SUPERANNUATION) REGULATIONS 2001
DETERMINATION OF SUPERANNUATION INTERESTS
SUPERANNUATION – AGREED FACTS
SUPERANNUATION – EXPERT WITNESS EVIDENCE
SUPERANNUATION – FURTHER ISSUES
FLAGGING ORDER
HUSBAND’S RETIREMENT – LUMP SUM OR PENSION
S.90MT – SPLITTING ORDER
SECTION 75(2)(f) AND (o) FACTORS
SECTION 22F(4) – ESSS LEGISLATION
WEST AND GREEN APPROACH
DETERMINATION BY COURT OF SECTION 90MT(2) ISSUES
CURRENT ASSETS AND LIABILITIES OF HUSBAND AND WIFE
ASSESSMENT OF CONTRIBUTION
ASSESSMENT OF SECTION 75(2) FACTORS
BASIS OF INTERIM SETTLEMENT ORDERS
ASSESSMENT IN PERCENTAGE TERMS
ASSESSMENT OF ORDERS SOUGHT BY HUSBAND
MONETARY EFFECT OF ORDER
FOURTH STEP
ORDERS
ISSUE
An interim property settlement was negotiated by the parties and their legal practitioners in proceedings before Smithers J. on 14 September 1999. Consent orders were pronounced. The outstanding issue of the husband’s superannuation entitlement and the alteration of such interest was then adjourned pursuant to s.79(5) of the Family Law Act 1975 (Cth) (“the Act”). That issue and the methodology, quantum, date and consequential form and orders of any splittable payment and the base amount to be allocated to the wife are now before the Court as part of the final determination of s.79 alteration of property.
LEGAL REPRESENTATION
When the proceedings commenced before me on the initial resumed hearing date of 15 September 2004 Mr Davis of counsel, then instructed by the firm Maria Barbayannis & Co represented the husband. That firm has now discontinued its appearance and the husband acts for himself but with Mr Davis continuing his appearance on a pro bono basis.
The wife appeared on her own behalf on 15 September 2004 but subsequently engaged solicitors, Richard Calley Pty and counsel, Mr Sweeney who appeared on her behalf at the further adjourned hearing on 30 and 31 March 2005.
I record that both Mr Davis and Mr Sweeney appeared as counsel and negotiated out of court the original interim property settlement and the adjournment of the superannuation issue on 14 September 1999.
SUPERANNUATION – BACKGROUND
The husband commenced his employment with the Victorian Public Service in April 1974 and on that date commenced contributions to the State Superannuation Fund. On 1 July 1987 all contributors to that Fund were given the option to transfer their superannuation to the recently established Emergency Services Superannuation Scheme (“ESSS”) (‘the Fund”). The husband was, as at the date of separation, a contributing member of that Fund. He ceased making any regular contributions thereto in 1998.
ESSS is a defined benefit fund which, subject to certain legislative and retirement options, is required to pay save in specific circumstances, a lump sum to members on their retirement on or prior to attaining age 65 years.
This Court is required to determine the amount of the member’s superannuation interest pursuant to the Family Law Act and its (Superannuation) Regulations and Schedules. The method therein prescribed for valuing the defined benefit superannuation interest in the growth phase was developed by the Australian Government based upon a typical private sector defined benefit scheme. It has been recognised that this method of valuation may be not wholly appropriate to certain public sector funds and consequently there is a procedure for such funds to apply for a scheme specific method of valuation. ESSS has not made such an application but applied to the Attorney-General on 12 January 2005 pursuant to Regulation 43A of the Family Law (Superannuation) Regulations 2001 to vary an aspect of their disability provisions or for an alternate valuation method for interests in the payment phase of that scheme. ESSS has now advised that it has withdrawn such application following discussions between its actuary and the Australian Government Actuary’s Office. That issue remains unresolved.
CHANGE IN HUSBAND’S SUPERANNUATION FUNDS
The husband maintained, and I accept his evidence, that in 1987 he did discuss the available superannuation options with the wife. Clearly ESSS represented a vastly superior superannuation plan to that which formerly operated. Exhibit “1” in the proceedings, (also exhibit “JMR-11”to the wife’s trial affidavit) is a letter dated 8 October 1998 from VicSuper. That letter advised:
“The husband became a member of the State Superannuation Fund (revised scheme) on 11 April 1974 and his total contributions to the Fund were $8,626.03. His contributions between that date and 1 December 1985 were $7,155.24. When he resigned on 1 January 1987 to transfer to ESSS the husband received a refund of contributions, net after tax of $8,452.90.”
I accept the evidence of the husband that the value of his superannuation entitlements dramatically increased on transfer to the ESSS fund from approximately $8,500.00 to a then calculated sum of $48,000.00. That increase was claimed by the wife to be in the nature of “a financial windfall” in that it was not directly related to the husband’s past service or contributions but to the new and more generous scheme and valuation methodology introduced for all contributors to ESSS from 1 July 1987.
I do not accept that claim by the wife as under the State Superannuation Fund the husband had available the option of a pension for retirement other than for disability purposes. Effective 1 July 1987 that pension facility was withdrawn from all members of the Emergency Services and replaced with a predominantly lump sum option. That was the background to the recalculation of the husband’s contributions and there was clearly a compromise between the increase in value of such contributions and the severe restrictions placed upon the pension option.
The husband commenced a second superannuation fund, the ESS Plan in 2002 and has since continued to make contributions to that alternate Fund. Its current accumulation value is $34,584.00.
The husband’s evidence was that he ceased financial contributions to his ESSS fund for two main reasons, they being:
§the spousal maintenance order made by Carter J on 9 July 1998 whereby he was required to pay $170.00 per fortnight to the wife, costs fixed in the sum of $3,500.00 together with the lump sum payment of $10,000.00 to discharge the wife’s spousal maintenance claim. He states that he simply did not then have the money to additionally make his regular superannuation contribution; and
§he sought the advice of a financial planner who advised him that otherwise he would reach his maximum entitlement in the ESSS Fund and that it was prudent and financially proper to contribute to a separate superannuation fund.
The wife has, from her employment, her own superannuation entitlements which are valued at $5,408.00 by her in her Financial Statement and which were not the subject of challenge.
I say at the outset that I am satisfied that procedural fairness has been afforded ESSS. They are aware of the proceedings and knew of the current Court injunctions restraining the husband from dealing with his superannuation entitlements. There are no current flagging orders made since the commencement of the superannuation legislation on 28 December 2002. Indeed counsel for the husband has advised the Court that ESSS was not prepared to involve itself in this case and have an officer in its employ give evidence other than upon subpoena. The transcript in this case will, if obtained, reveal that the Court, on a number of occasions as counsel for the wife listed in his written submissions, inquired of counsel if there would be evidence given in the proceedings from ESSS as to particular issues of and related to the husband’s entitlement, retirement and valuation of his superannuation interests. Such evidence was never called by the husband or put before the Court by the Fund, for reasons upon which I do not speculate.
HEARING OF 15 SEPTEMBER 2004
The proceedings first came before me in the defended list on the above date. The case commenced and evidence was taken from the husband and the single expert professional witness, Mr W, an accountant and consultant in superannuation and a director of the firm who had some thirty years of commercial experience and whose qualifications were accepted by the parties as appropriately qualifying him to give expert evidence.
On the afternoon of that first hearing I determined to adjourn the proceedings part-heard before myself, delivered a substantial extempore judgment and pronounced orders which required an updated expert’s report as to the valuation of the husband’s defined benefit interest in the growth phase of his superannuation entitlements.
The reasons for the adjournment and the issues of uncertainty that had then arisen in respect of the valuation methodology and an application by ESSS to the Attorney-General’s Department to vary an aspect of their fund are explained in the reasons for judgment which I refer to and incorporate within my considerations of all aspects of this case. That variation, in fact, turned out to apply only to members receiving a disability pension under section 20F of the Emergency Services Superannuation Act 1986. That fact was subsequently explained to the Court pursuant to the report dated 21 October 2004 of Mr W.
The matter returned for hearing before me on 16 December 2004 upon an interim application filed by the husband which was then dismissed. Mr W was ordered to prepare his updated superannuation valuation as at 1 February 2005 and the matter was otherwise adjourned for further hearing before myself on 24 February 2005. On that date the wife’s solicitors, whom she had recently engaged, appeared seeking further disclosure and financial information from the husband and an adjournment of all proceedings. I made orders requiring limited financial disclosure and otherwise adjourned all applications on a part-heard basis to resume on 30 March 2005 which is the date on which these continuing proceedings commenced and then concluded, subject to final submissions, the following day. I provided a further extempore judgment on 24 February 2005 which again I refer upon and incorporate into my reasons for judgment.
ORDERS SOUGHT BY HUSBAND
The husband, as applicant, filed the following documents seeking orders in these proceedings:
§amended application filed 23 April 2004;
§Form 1B reply filed 31 May 2004;
In summary the husband sought for there to be a base amount allocated to the wife as a splittable payment in the growth phase from his superannuation fund in the sum of $36,000.00.
Subsequently, and in the proceedings before me on 15 September 2004, he authorised his counsel to make an open Calderbank offer of a splittable payment of $48,000.00, but without amending his prior application.
In written submissions on behalf of the husband the order sought by him for the base amount to be allocated to the wife in the growth phase was $37,782.00, such order being made by way of a final alteration of property interests.
ORDERS SOUGHT BY WIFE
The wife filed the following applications:
§her application filed 27 January 2004;
§her amended response to an application for final orders filed 12 May 2004;
§her further amended response to an application for final orders filed 30 July 2004;
§her further amended response to an application for final orders filed 8 March 2005.
Initially, and when acting for herself, the wife sought orders requiring the husband to recommence contributions to his ESSS superannuation so as to achieve a maximum retirement benefit at age 55 years and then for there to be an equal division of the entitlement as at his retirement date of that superannuation.
Subsequently the wife sought orders during the 25 September 2004 hearing that the base amount to be allocated to her be fixed in the sum of $97,551.00 and various consequential orders thereto. By her most recent Form 1A response, and prepared by her now solicitors the wife sought that the base amount to be allocated to her be $270,000.00 together with an additional base amount allocated out of the husband’s second superannuation fund of $17,292.00. These payments would have been made in the growth phase of the Fund.
WIFE’S OUTLINE OF ARGUMENT – ORDERS SOUGHT
When the matter recommenced before me on 30 March 2005 I was presented with two, differing, outlines of the wife’s argument. In the first of those documents dated 20 March 2005 an order was foreshadowed further adjourning all applications pursuant to s.79(5) of the Act pending the husband’s retirement and receipt of his actual superannuation benefits, net of any tax or proper adjustments.
On the morning of the hearing counsel for the wife presented the Court with a further Outline of Argument dated 27 March 2005 seeking in lieu all of the earlier orders sought the following order:
“That pursuant to section 90MT(1) of the Act the wife obtain a splitting order in a figure representing 50% of the husband’s lump sum benefit to be received on the vesting of his entitlement”.
The wife then abandoned her claim to any base amount to be made as a splittable payment from the husband’s further ESS Plan and her case was thereafter conducted on that basis.
AFFIDAVITS IN EVIDENCE
The husband relied upon:
§his trial affidavit filed 21 July 2004 and exhibits thereto (subject to paragraph 21(e) and (f) which were struck from that affidavit);
§his Form 13 Financial Statements filed 21 July 2004 and 8 March 2005;
§his earlier Form 17 Financial Statement filed 2 September 1999;
§the affidavit of his solicitor filed 21 July 2004 annexing thereto the report of the expert valuation witness, Mr W, dated 11 June 2004 and his further report dated 12 July 2004;
§the further affidavit of Mr W filed 16 December 2004 exhibiting his further report dated 25 October 2004;
§the further affidavit of Mr W filed 21 February 2005 annexing his updated valuation report dated 15 February 2005.
Additionally counsel for the husband filed with the Court and relied upon a Summary of Argument filed 16 March 2005 and a supplementary Summary of Argument presented to the Court at the commencement of these proceedings on 30 March 2005 which I have read and considered.
The wife relied upon:
§her trial affidavit and exhibits thereto filed 8 March 2005;
§her earlier affidavit and exhibits thereto filed 23 June 2004;
§her Form 13 Financial Statements filed 23 June 2004 and 8 March 2005;
§two further Outlines of Argument, dated 20 March 2005, but substantially abandoned, and the further and more recent Outline of Argument relied upon dated 27 March 2005 and presented to the Court at the commencement of the proceedings.
There are many inadmissible statements in the various affidavits and rather than take objections paragraph by paragraph counsel agreed between themselves and asked the Court to simply disregard all objectionable material which I have endeavoured so to do.
WRITTEN SUBMISSIONS
After evidence was concluded on 31 March 2005 the hearing was adjourned for the preparation of written submissions with oral argument received on 15 April 2005. Counsel for both parties filed detailed written submissions on or prior to 13 April 2005. The husband’s counsel amended his submissions by advising the Court that the husband would reach a final multiple of 8.2 upon attaining the age of 65 years and not before that date. I have carefully read and evaluated these submissions which have assisted in determining the just and equitable orders hereafter pronounced.
I should record that I reject the somewhat inflammatory submission on behalf of the husband’s counsel (page 10) that the wife:
“Simply wishes to use these proceedings to get as much additional property from the husband as she possibly can … the wife’s attempts to re-open the whole of the parties’ property proceedings is both cynical and opportunistic”.
The wife has a valid, properly adjourned application for alteration of property interests before the Court, with the consent of the husband, and I accept that she and her legal advisers have endeavoured to obtain the best outcome in the proceedings.
SHORT HISTORY
The husband was born in January 1954 and is 51 years of age.
The wife was born in January 1961 and is 44 years of age.
The parties commenced living together as man and wife in August 1984.
The parties married in December 1985 and separated in May 1997 with a Decree Nisi of dissolution of the marriage being pronounced on 4 May 1999.
There are two children of the marriage:
§LJR born January 1987, and
§JSR born July 1991.
LJR is 18 years of age and completed her secondary education last year. She is now enrolled at Melbourne University. She has moved into accommodation near to the City of Melbourne and is supported by government benefits, some limited part-time employment and moneys received from her parents. There is a live dispute between the parties as to the level of financial assistance made by each of them. An adult child maintenance claim was instituted by the wife on behalf of LJR and recently returnable in the local Magistrates’ Court. Those proceedings were struck out and are therefore concluded. I am satisfied that the wife since separation and now since LJR has commenced her tertiary studies is making the substantial financial and emotional contribution to her welfare and support. Her evidence was that “she has paid $3,000.00 to set up LJR and gives her money when she needs it”. The husband’s evidence is that he will pay the university union fees and contribute to LJR’s books and otherwise, at her request, make a payment as she may need money. After a period last year where LJR enjoyed no overnight contact at her father’s home she has now resumed staying there on one night each fortnight. Otherwise she spends the majority of her weekends at her mother’s home.
JSR is thirteen years of age and attends High School. The husband has adjusted his child support contribution to now provide only for JSR and those moneys are regularly received by the wife. JSR spends four nights in each fortnight with his father, a recent increase of one night in what had been the contact arrangement for many years. The wife says JSR is not coping with that extra evening. I am satisfied that contact is in accordance with JSR’s wishes and the one issue of common ground in this case is that the parties have cooperated on contact arrangements and changeover. The parties share the secondary school expenses of JSR with the husband’s evidence being that he pays an approximate sum of $2,500.00 per annum. I accept that evidence. I accept that the debt payable to the primary school for JSR’s fees has also been paid by the husband. The wife retains a debt of approximately $5,000.00 for those school fees which she has an obligation to pay on a long term deferred basis. I find it most unlikely that the payment of those outstanding primary school fees will ever be made by the wife or enforced by that school against the wife.
The current child support assessment payable by the husband for JSR (only) is $897.00 per calendar month together with the additional educational payments made by the husband.
The husband remarried CPW in March 2000. Ms W is a public servant whose income is advised by the husband to be $1,380.00 per week. She supports two children from a previous marriage.
PREVIOUS ORDERS
7 July 1998 – Carter J
Her Honour ordered, in opposed proceedings that the husband pay maintenance for the wife of $170.00 per fortnight and that he pay her costs fixed in the sum of $3,500.00, such payment to be deferred until the completion of the (interim) property proceedings.
14 September 1999 – Smithers J
During the hearing of opposed property applications the parties then reached agreement on interim property orders and his Honour, by consent, pronounced the following orders:
“1.That on or before 14 December 1999 the husband pay or cause to be paid to the wife the lump sum of $10,000.00 (“the payment”) for maintenance for the wife pursuant to Section 77A of the Family Law Act and representing capitalised spousal maintenance for the next 3 years.
2.Upon the payment the order for periodic spousal maintenance made by this Court on 9 July 1998 be and is hereby discharged.
3.By way of interim property distributions:-
(a) The husband and the wife do all such acts and things and sign all such documents as may be required to transfer to the wife, at the expense of the wife, all of his right, title and interest in the real property situate at and known as [the former matrimonial home] (“the real property”) currently valued at $195,000.00 and subject to a mortgage of approximately $82,000.00.
(b) The wife indemnify the husband against all payments and liability pursuant to the mortgage registered to the Commonwealth Bank of Australia (“the mortgage”) and all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
4.The question of the wife’s entitlement to a further alteration of the property interests of herself and the husband pursuant to Section 79 of the Family Law Act be adjourned pursuant to Section 79(5) of the Act until the vesting of the husband’s entitlement under the Emergency Services Superannuation Fund (“the Scheme”) or until further order. (my emphasis).
5.Until the determination of the wife’s entitlement under paragraph 4 hereof or further order of this Court the husband be and is hereby restrained from receiving, charging, alienating, encumbering or in any way dealing with his entitlements as a beneficiary of the Scheme.
6.The husband:-
(a) Sign an irrevocable authority prepared by the wife’s solicitors directed to the Trustees of the Scheme and/or its successors in title from time to time irrevocably authorising, directing and empowering the Trustees as follows:-
(i)To forthwith notify the wife of any events which would cause the entitlement or benefit of the husband to vest, including his resignation, retirement or retrenchment
(ii)Not to distribute the proceeds of his entitlement under the Scheme other than in accordance with these orders until 28 days written notice of same has been given to the wife and her solicitors….
(b)To authorise his employer to notify the wife and her said solicitor of any decision to terminate the husband’s employment or of any election or notice of the husband to terminate his employment.
(c)To authorise, nominate and maintain the wife as a beneficiary under the Scheme pending formalisation of the wife’s entitlement pursuant to this order.
(d)To use his best endeavours to provide documents (or copies of same) to the wife and her solicitors confirming the above irrevocable authorities have been served upon and acknowledged by his present and any future employer and the Trustee of the Scheme.
(e)To sign any other documents or do any other things as may be necessary to give effect to these orders.
7.That the husband his servants and agent further be and are hereby restrained from:-
(a) Receiving the proceeds of his entitlements under the Scheme other than by lump sum; and
(b) Undertaking any course of action and/or doing any act or thing that may deprive the wife of any future entitlements to receive payment under the Scheme.
8.A sealed copy of these orders shall forthwith be served upon the Trustees of the Scheme.
9.That the wife forthwith do all necessary acts and things and sign all necessary documents to transfer to the husband at the expense of the husband all her right title and interest in:-
(a) The 1984 Nissan motor vehicle in her name.
(b) The caravan, fittings and accessories presently in her possession shall be forthwith sold and the proceeds applied in reduction of the debt in his name (currently standing at about $7,000.00).
10.That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a) each party be solely to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the real property being deemed to be in the possession of the wife);
(b) insurance policies remain the sole property of the owner named thereon;
(c) each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(d) any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
11.The application of the wife for spousal maintenance be otherwise dismissed.
CERTIFICATION
12.That pursuant to Order 38 Rule 13(1)(a)(i) of the Family Law Rules this matter reasonably required the attendance of Counsel.
IT IS DIRECTED
13.That all property/maintenance issues be removed from the Pending Cases List until the vesting of the husband’s superannuation entitlements or further order. (my emphasis).
14.That the Minutes of Consent remain on the Court file.
15.That the Solicitor for the wife file 3 clean copies of these Orders within 7 days.
THE COURT NOTES
(a)Subject to paragraph 4 hereof these orders shall as far as practicable finally determine the financial (and other) relationships between them and avoid further proceedings between them.
(b)An amount of $3,500.00 remains due and payable to the wife for costs ordered to be paid by the husband by this Court on 9 July 1998.
The Court notes further
The parties agree the value of the Nissan motor vehicle referred to in paragraph 9 hereof is $1,000.00 and the caravan $2,500.00 and the wife’s vehicle is of similar worth to the vehicle of the husband.
Counsel and the parties accepted that the orders of his Honour were interim orders. It is the adjournment of the superannuation, paragraph 4 of the orders and the further alteration of property interests that are now for determination. The husband’s superannuation interests have not vested as he has not retired, but, nevertheless, both parties wanted this hearing to proceed.
The orders themselves are silent as to any percentage division of the then property assets as between the husband and wife. By the interim property distribution the then matrimonial home was transferred to the wife subject to its then mortgage liability of $82,000.00. There was agreement between counsel that the interim property settlement was concluded on the basis that the wife then received 60% and the husband 40% of all net assets aside from superannuation. This division was not recorded in the minutes pronounced 14 September 1999 but was not an issue in dispute before me in this hearing.
In the husband’s trial affidavit he deposes to the fact that, to enable the wife to retain the home, his agreed 40% share of its value was retained by the wife but subject to the offset against any share of his superannuation entitlements that she might be subsequently awarded. The husband’s evidence was that the equity in the home was $113,000.00 and that 40% then foregone by him was valued at $44,800.00. The husband says that the wife and her lawyers have at all times acknowledged his somewhat generous financial action in permitting the wife to retain that sum and thereby retain the then matrimonial home.
I am and remain perplexed that such a significant financial circumstance was not recorded in the consent orders before Smithers J. or otherwise as an additional notation in that order.
The wife, in her evidence and when acting for herself, and subsequently her counsel have not actively challenged the husband’s contention that this sum should properly be taken into account in determining a current and overall just and equitable property order.
I accept the evidence of the husband and I will make an appropriate financial adjustment in my orders.
I record that counsel for the husband submitted that, in reality, the then sum of $44,800.00 (or $45,200.00 as he subsequently referred to) has provided a very real financial benefit to the wife. It facilitated her retaining the home which increased in value prior to its sale. Without the husband’s decision to leave that sum in the control of the wife it is likely that she could not have retained the home and she would be in a significantly lesser financial circumstance today. I accept that is a contribution which I have fully considered.
I have not been asked to calculate and I have determined that I should not adjust an interest component in accordance with the Family Law Rules on that sum of $44,800.00 over the past six years where the wife has had the sole benefit thereof.
What I propose to do is to appropriately adjust the sum of $44,800.00 and, on a pro rata basis, acknowledge that such sum would have increased in like proportion to the increase in value of that home. This is the issue developed by counsel for the husband on page 6, paragraph 4, of his written submissions which appropriately does highlight the financial benefit the wife received from the interim orders. Otherwise, in my consideration of the section 79(4) contributions have regard to this then contribution by the husband, the current financial circumstances of the parties, and the effect of that interim property order under sub-paragraphs (b) and (n) of section 75(2) of the Act.
In evaluating the orders of Smithers J. it is important to properly record that they were negotiated out of Court and made by consent. In that regard paragraph 4 adjourned the further alteration of property interests until the vesting of the husband’s superannuation entitlement, or further order. The adjournment was not until the enactment of the anticipated legislation on superannuation amendments to the Act. The husband would have known that he was able to retire upon attaining the age of 50 years. If the husband then was proposing to work to age 65 an issue for consideration and evaluation is why he would not then have wanted the adjournment to be until a date after the commencement of such superannuation amendments. I do not find the words “or until further order” to be of real assistance as that does not necessarily limit the adjournment which was until the vesting of the husband’s ESSS superannuation. Accordingly what must be evaluated is, in 1999, whether or not the husband proposed to work until his full retirement age at 65 or otherwise anticipated an earlier retirement with the then benefits of his superannuation entitlements.
In response to the written submissions of counsel for the wife (paragraphs 1 and 2) I find that there is a need for a further order. Notwithstanding the agreed basis of the adjournment until the vesting date of superannuation or further order it is important for each of these parties to achieve both a just and equitable result and finality. It was not the case of the wife, as she presented her argument or subsequently as her legal practitioners conducted the case for there to be an ongoing adjournment pursuant to s.79(5) of the Act. I find that it is conclusively in the best interests of these parties and the family for final orders to be made and for the litigation to be completed. In the way in which the wife’s case was conducted I do not accept that the evidentiary onus is upon the husband to satisfy the Court that there should be further orders made. I will subsequently pronounce orders that I have concluded are just and equitable in all of the financial and other circumstances of this case and in accord with the provisions of the Act.
The further written submission of the wife’s counsel (paragraph 6) is that:
“As the former matrimonial home was then the only property the percentages agreed to would have been expected to apply to all property if the superannuation was, at that time, capable of being vested”.
I disagree. The interim orders dealt with property other than superannuation and I find no evidence that the parties would then have agreed, or even contemplated a division of superannuation as to 60% in favour of the wife and 40% to the husband. I have made a superannuation splitting order which I conclude is just and equitable.
STANDARD OF PROOF
The appropriate standard of proof that I have applied, subject to the gravity of the particular factual issues, is the civil standard, namely the balance of probabilities. In Briginshaw v. Briginshaw(1938) 60 CLR 336 at 361-2, Dixon, J. said:
“Except upon criminal issues to be proved by the Prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the Tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the Tribunal.”
The High Court said in Neat Holdings Pty Ltd v. Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 172
“When an issue falls for determination on the balance of probabilities and the determination depends on a choice between competing and mutually inconsistent allegations of fraudulent conduct, generalisations about the need for clear and cogent proof are likely to be at best unhelpful and at worst misleading. If such generalisations were to affect the proof required of the party bearing the onus of proving the issue, the issue would be determined not on the balance of probabilities but by an unbalanced standard. The most that can validly be said in such a case is that the trial judge should be conscious of the gravity of the allegations made on both sides when reaching his or her conclusion. Ultimately, however, it remains incumbent upon the trial judge to determine the issue by reference to the balance of probabilities. (per Mason, C.J., Brennan, Deane and Gaudron, JJ.)”
Accordingly and in considering and evaluating all of the evidence and in determining findings I have specifically had regard to the civil standard of proof subject to being conscious of the gravity of all particular allegations.
OBSERVATION OF PARTIES AND WITNESSES
I have had the very real benefit of observing the husband and wife in the witness box, on their oath, when they gave evidence and were cross-examined. This observation of witnesses in the giving of their evidence is a valuable means available to assist in arriving at the truth of the matter. See, for example, Minagall v Ayres (1966) SASR 151 at 154 per Hogarth J; see also Government Insurance Office of New South Wales v Bailey(1992) 27 NSWLR 304 at P313 per Kirby J.
“By conventional theory, the observations made by a trial judge of the appearance and demeanour of a witness giving evidence are not only available to be used in the determination of a dispute but amount to important ingredients of the decision-making process. They normally provide the primary decision-maker a distinct advance which controls, and even limits, the exercise by the appellate court of its statutory functions in an appeal by way of re-hearing”: see Owners of Steamship Honestroom v Owners of Steamship Sagaporack [1927] AC 37 at 47; Jones v Hyde (1989) 63 ALJR 349 at 351; 85 ALR 23 at 27; Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178ff.”
FAMILY LAW ACT 1975 (CTH), S.79 AND RELEVANT CASE LAW
The proper approach to determining a section 79 application is now well established, both by the Family Law Act and by case law (see In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Davuat & Raif(1994) FLC 92-503; In the Marriage of Clauson (1995) FLC 92-595).
Section 79(2) requires that any order must be just and equitable. Section 79(2) provides:
“(Just and equitable requirement) 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.
In considering the alteration of property orders that may be required I must have specific regard to and evaluate section 79(4) of the Family Law Act 1975 (Cth). I have detailed throughout this Judgment the very specific contributions both direct and indirect, financial and non-financial and other contributions, including that of a home maker. I have referred to and incorporate within my consideration and evaluation of section 79(4) all such issues and findings including the relevant s.75(2) factors.
Section 79(4) specifically provides:
[Matters to be taken into account:] 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 the, 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;
(d)the effect of any proposed order upon the earning capacity of either party to the marriage;
(e)the matters referred to in sub-section 75(2) so far as they are relevant;
As was said by Guest J in Pedersen v Pedersen (unreported) Appeal No. WA3 of 2002:
“the mandatory prescription of the Act is to evaluate contributions pursuant to section 79(4). In Pierce v Pierce (1999) FLC 92-844 at page 85,881 the Full Court (Ellis, Baker and O’Ryan JJ) said: “… there is an obligation on the trial Judge not only to identify the relevant contributions but also to assess them”. Similarly in JEL v DDF (2001) FLC 93,075 at paragraph 152(b) the Full Court (Kay, Holden and Guest JJ) said “…it is a clear general principal, derived from recognised authority that there is a requirement to undertake an evaluation of the respective contributions”.
Accordingly I have carefully safeguarded against utilising the provisions of section 79 of the Act as a “source of social engineering or as a means of evening up the financial positions of the parties to the marriage”. See Kennon v Kennon (1997) FLC 92-757 at p. 84,303. It is not the purpose of the relevant provisions of the Act to “… equalize the financial strengths of the parties”, per Wilson J in Mallet v Mallet (1984) 156 CLR 605 at 638 when addressing his attention to the object of section 75(2) of the Act.
Section 79(4) involves a four step exercise which I have undertaken in this Judgment, namely:
(a)the identification of the property of the parties, their assets and financial resources net of their liabilities;
(b)the evaluation of the “contributions”;
(c)the evaluation of the matters referred to in section 75(2);
(d)a determination as to whether the result is just and equitable by reference to section 79(2) of the Act. In determining whether the outcome is just and equitable it is “the real impact in money terms which is ultimately the critical issue” (JEL v DDF (supra)).
In Hickey and Hickey and The Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 the Full Court (Nicholson CJ, Ellis and O’Ryan JJ) commented that (at page 78386):
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, the court should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the court should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case”.
In Hickey (supra) the Full Court then continued and said:
“Section 79, unlike s 78, requires the court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property” (my emphasis).
I conclude on the facts of this case that this is a particularly helpful paragraph as it directs the attention of a trial Judge to carefully evaluate and apply the provisions of s.79(2) and s.79(4), including then the s.75(2) factors in determining orders for an alteration of interest of the remaining property. A full and proper application of the relevant principles as contained in the Act would ensure that the court does not simply apply an arithmetical formula to the balance of property.
I have hereafter considered in detail the submissions of counsel for the husband for the adoption of a West and Green formula. I have rejected that simplistic and, in the particular circumstances of this case inappropriate and opportunistic, approach.
The Full Court, on numerous occasions has reflected upon the nature of proceedings under s.79 and has explained that they are not a mathematical or accounting exercise. There is an obligation imposed on the trial Judge to examine the facts and evidence and to evaluate and then determine what is a just and equitable order on the facts of the case and applying the principles contained within the Act. That approach is best explained by the Full Court (Ellis, Strauss and Lindenmayer JJ) in the following words:
“The task of the court in proceedings under s79 is not akin to an accounting exercise. The task is to examine the facts and evidence carefully to decide what is just and equitable in all of the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s 79 principles. See Ellis, Strauss and Lindenmayer JJ in Harris (1991) FLC 92-254; (1991) 15 Fam LR 26, and by Fogarty and Finn JJ in Beneke (1996) FLC 92-698; (1996) 20 Fam LR 841 and also Kay, Warnick and May JJ in Danielian (unreported) Appeal No. EA 6 of 2003”.
The written submissions of the husband’s counsel examine his post separation contributions made to the acquisition of property including superannuation. I accept those submissions insofar as they are consistent with the majority judgment in Farmer v Bramely (2000) FLC 93-060 and the more recent decision of the Full Court (Bryant CJ, Finn and Holden JJ) in GS & TS (2005) FamCA 40.
SECTION 75(2) FACTORS
The relevant factors which I have considered and evaluated throughout this Judgment 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 attained the age of 18 years;
(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;
(g)where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
(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 the property of the parties;
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, or is to provide, 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;
The primary submission on behalf of the husband was that, by virtue of the consent orders and the financial benefits conferred on the wife as a result of the interim property hearing there should be no allowance for s.75(2) factors in this hearing. The husband emphasised and I accept that the wife received a lump sum payment of $10,000.00 as capitalised spousal maintenance pursuant to s.77A of the Act in that earlier interim hearing.
The written submissions of the wife, in contrast, highlight the importance of “future needs” and paragraphs 19-24 (inclusive) of her document reinforces that fact and the evidence in support thereof. I have evaluated that submission and otherwise have carefully considered all of the relevant s.75(2) factors.
I wholly concur with the submissions made on behalf of the wife that, to determine a just and equitable order I must fully have regard to the identified s.75(2) factors and adjust the alteration of property interests appropriately. This I have done.
EMERGENCY SERVICES SUPERANNUATION ACT 1986
The relevant sections of the Emergency Services Superannuation Act 1986 (Act No. 94/1986) are as follows:
“20B. Membership
(1) For the purposes of this Part, membership means the period of service up to the age of 65 years calculated in years including fractions appropriate to complete days during which the employee was entitled to make contributions (other than contributions under section 20M) to the Scheme.”
“20C. Accrued benefits
(1) The accrued benefit of a contributor is the sum of-
(a)10% of the salary of the contributor for each year of membership in which the contributor was entitled to make but did not make contributions to the Scheme; and
(b)16% of the salary of the contributor for each year of membership in which the contributor contributed 3% of salary to the Scheme; and
(c)20% of the salary of the contributor for each year of membership in which the contributor contributed 5% of salary to the Scheme; and
(d)24% of the salary of the contributor for each year of membership in which the contributor contributed 6% of salary to the Scheme; and
(e)28% of the salary of the contributor for each year of membership in which the contributor contributed 7% of salary to the Scheme; and
(f)32% of the salary of the contributor for each year of membership in which the contributor contributed 8% of salary to the Scheme; and
(g)36% of the salary of the contributor for each year of membership in which the contributor contributed 9% of salary to the Scheme prior to 1 January 1994; and
(h)the percentage of the salary of the contributor that is determined by the Board having regard to the period of membership and contributions of the contributor under any prior fund and any benefits to the contributor from any prior fund; and
(i)the percentage of the salary of the contributor that is determined by the Board having regard to any money or assets transferred from an approved superannuation arrangement.
(2)The accrued benefit of a contributor must not exceed a maximum of 8-40 times the salary of the contributor.
(2A)For the purposes of sub-section (2), if a payment or transfer to a non-member spouse is made for the purposes of Part VIIIB of the Commonwealth Family Law Act 1975 whether under Part 4AA or otherwise, the maximum accrued benefit of the member spouse must be adjusted by the board in accordance with a methodology approved by the Minister, on the advice of an actuary appointed by the Board.
(3)For the purposes of section 20F(8), 20F(9), 20F(10), 20F(19) and 20G(3)(b)(ii), the salary used to determine the accrued benefit of a former contributor is the current equivalent of salary on termination of service.
(4)In any case of a payment under this Part and which is made on or after 1 January 1994, the benefit calculated to be payable by the Board must not be less than any benefit that would have been payable if the benefit had been paid prior to 1 January 1994.
20D. Retirement of contributor
Upon the retirement of a contributor on or after attaining the age of 50 years, the Board must pay to the contributor a lump sum equal to the accrued benefit of the contributor.
20F. Disability of contributor or police recruit
(1)If a contributor who is an operational staff member terminates service before the age of 55, or if the contributor is not an operational staff member and terminates before the age of 60, and the contributor is suffering from disability at the time of termination, the Board must pay to the contributor an annual pension at a rate of 1/12th of the sum of-
(a)the lump sum which would have become payable under section 20E(1) if the contributor had died on the date of termination; and
(b)if the disability is the result of traumatic bodily injury suffered in the course of employment, the supplementary lump sum which would have become payable under section 20E(4) if the contributor had died on the date of termination.
(2)If a contributor who is an operational staff member terminates service at or after the age of 55, or if the contributor is not an operational staff member and terminates at or after the age of 60 and the contributor is suffering from disability at the time of termination, the Board must pay to the contributor a lump sum equal to the accrued benefit of the contributor at the date of termination.
(3)The pension under sub-section (1) is payable during the life of the former contributor in fortnightly instalments of one twenty-sixth of the annual pension.
22FObligation on Board
(1)Subject to sub-sections (5) and (6), the Board must comply with this section if-
(a)a superannuation agreement which provides for a payment split; or
(b)a flag lifting agreement which provides for a payment split; or
(c)a splitting order –
is served on the Board under Part VIIIB of the Commonwealth Family Law Act 1975.
(2) This section also applies to-
(a)a superannuation agreement which provides for a payment split; or
(b)a flag lifting agreement which provides for a payment split; or
(c)a splitting order-
which was served on the Board under Part VIIIB of the Commonwealth Family Law Act 1975 before the commencement of section 5 of the Superannuation Acts (Family Law) Act 2003 if the non-member spouse’s entitlements in respect of the superannuation interest have not been satisfied as at that commencement.
(3)If the non-member spouse has not satisfied a relevant condition of release and the member spouse is not receiving a pension under this Act, the Board must if the value of the non-member spouse’s entitlement in respect of the superannuation interest at the particular time does not exceed the value of the member spouse’s interest in the Scheme-
(a)transfer a lump sum amount equal to the value of the non-member spouse’s entitlement in respect of the superannuation interest at the time of the payment to an eligible superannuation plan nominated in writing by the non-member spouse within the specified period; or
(b)if the non-member spouse fails to nominate in writing an eligible superannuation plan within the specified period, transfer a lump sum amount equal to the value of the non-member spouse’s entitlement in respect of the superannuation interest at the time of the payment to an eligible rollover fund selected by the Board.
(4)If the non-member spouse has satisfied a relevant condition of release or the member spouse is receiving a pension under this Act, the Board must if the value of the non-member spouse’s entitlement in respect of the superannuation interest at the particular time does not exceed the value of the member spouse’s interest in the Scheme-
(a)if so requested in writing by the non-member spouse within the specified period, pay the non-member spouse a lump sum amount equal to the value of the non-member spouse’s entitlement in respect of the superannuation interest at the time of the payment; or
(b)if so requested in writing by the non-member spouse within the specified period, transfer a lump sum amount equal to the value of the non-member spouse’s entitlement in respect of the superannuation interest at the time of the payment to an eligible superannuation plan nominated in writing by the non-member spouse; or
(c)if no request is received from the non-member spouse within the specified period, transfer a lump sum amount equal to the value of the non-member spouse’s entitlement in respect of the superannuation interest at the time of the payment to an eligible rollover fund selected by the Board.
(5)Sub-sections (3) and (4) do not apply if-
(a)the member spouse’s superannuation interest is an unsplittable interest; or
(b)a payment flag is operating in respect of the member spouse’s superannuation interest; or
(c)the non-member spouse has served a waiver notice on the Board under section 90MZA of the Commonwealth Family Law Act 1975 in respect of the member spouse’s superannuation interest; or
(d)the member spouse’s superannuation interest is a payment that is not a splittable payment under Part 2 of the Commonwealth Family Law (Superannuation) Regulations 2001.
(6)If the member spouse’s superannuation interest is a pension under this Act due to a disability which is a splittable payment, the Board may determine that sub-sections (3) and (4) do not apply.
(7)If the non-member spouse serves a waiver notice on the Board under section 90MZA of the Commonwealth Family Law Act 1975 in respect of the member spouse’s superannuation interest, the Bord may make a payment to the non-member spouse not exceeding the value at a particular time of the non-member spouse’s entitlement in respect of the superannuation interest less any payments previously made by the Board to the non-member spouse in accordance with this section.
22G.Reduction of benefit or accrued benefit entitlement
Despite anything to the contrary in this Act, if under section 22F an amount is paid by the Board to a non-member spouse or transferred by the Board on behalf of a non-member spouse, the accrued benefit of a member spouse must be reduced by the Board in accordance with a methodology approved by the Minister, on the advice of an actuary appointed by the Board.
Both counsel have considered and addressed the Court on the application of the Emergency Services Superannuation Act to facts in issue in this hearing.
Whilst the husband may retain his membership of the ESSS during his service and up until age 65 years he does have the available option provided for in section 20D to retire on or after attaining the age of 50 years with the payment of an appropriate lump sum equal to his accrued benefit. His entitlement to a disability pension is applicable, pursuant to section 20F, if service is terminated prior to age 55 because of a disability.
Mr W was asked questions by the husband’s counsel and by myself on this issue. I do not accept that his evidence was that the earliest age that the husband could access a lump sum is at age 55 years. What Mr W was doing was contrasting the Superannuation Industry Regulations and taxation concessions which, for other members of the workforce may cease at age 55 years but there are specific provisions in this Emergency Services Superannuation Act providing for optional retirement after attaining 50 years of age. [Counsel for the husband’s] questions of the expert witness, and his submissions, were on the basis that there is no option to retire at age 50 but that it is an accumulation option that “stops people suffering a penalty if they wish to take their benefits earlier than the 55 retirement age”.
If it be that my reading of section 20D is incorrect it matters not in the overall outcome and having regard to the just and equitable orders that I will pronounce. The husband, I find, will not retire until some time after turning 55 in 2009.
Section 20C is of particular importance as I understand the evidence and submissions of counsel and, in particular, as it is developed by [Counsel for the wife] in paragraph 39 of his written submissions. The husband has made no contributions to ESSS post 1998. Nevertheless pursuant to sub-paragraph (1)(a) thereof his accrued benefit is increasing by 10% of salary, or by .1 in his multiplier in each year. This sub-section accordingly explains the information as to the multiple provided to Mr W and recorded in his initial report dated 11 June 2004. The husband’s lump sum accrued benefit multiple on date of separation, 27 May 1997 was 5.285. On 15 January 2004 it had increased to 6.1214 and by 5 February 2005 it had further increased to 6.226. Whilst therefore not wholly responsible for that increased multiple this sub-section illustrates the ongoing annual increase that the husband will benefit from in his accrued multiple.
I have considered and assessed and made findings as to the various contributions, financial and non-financial, direct and indirect of the parties to the acquisition, conservation and improvement of their property and particularly, in the context of this judgment as to superannuation. I have balanced the 60% interim property order and the $44,800.00 sum which the husband “left in” the wife’s then property. I have fully evaluated the contributions of the husband to superannuation prior to and after cohabitation and specifically the significant contributions made throughout that 12.9 years of cohabitation. I have properly balanced the evidence of and related to homemaker and parent and, within the context of the contributions issue, the applicable s.75(2) factors as are there relevant.
The husband has, I find, made the principal contribution to his superannuation entitlements having regard to his long and continuous employment, his financial contributions, his level within the public service and the particular and generous entitlements of the ESSS fund which are available only because of his employment. The wife’s contributions are significantly lesser and are made in the role of homemaker and parent and as the then wife of a person in the husband’s job with the inherent stresses that that placed upon her and the family.
ASSESSMENT OF SECTION 75(2) FACTORS
Those relevant factors have been identified and considered throughout this judgment. I have made specific findings on the employment and income of each of the parties and how the parties have and will continue financially to provide for themselves and their households.
There must be an appropriate adjustment of these factors in favour of the wife having regard to all of my findings and, in summary:
§her current and future income when contrasted to the husband’s;
§the likelihood of her obtaining more extensive and full paid employment;
§her obligations for JSR;
§the husband’s superannuation entitlements and generally other work related entitlements and benefits including accrued long service leave and other leave and payments for service;
§her reduced standard of living post separation;
§the 12.9 years of cohabitation and the limitation that that imposed upon the wife’s work qualifications, employment and earning capacity;
§the need of the wife to continue in her role as a parent to JSR and with the financial, emotional and time restraints thereby incurred;
§the financial circumstances of the husband’s marriage with Ms W, her substantial income and superannuation and the ability of each of the husband and his new wife to invest, negatively gear property and otherwise earn a substantial combined income and provide for their lifestyle and future retirement;
§the existing interim order and the equity that the wife has therefrom in her home with a significant mortgage encumbering its title;
§the current child support and additional payments made by the husband for JSR which substantially contribute to but do not remove from the wife the burden of at least an equal contribution to JSR’s schooling and general financial wellbeing;
§the financial responsibilities of the wife to support and maintain LJR;
§the particular sub-paragraph (f) and (o) factors as I have discussed.
BASIS OF INTERIM SETTLEMENT ORDERS
It is common agreement that the interim orders altered the parties interests in property, other than superannuation as to 60% to the wife and 40% to the husband. It is a matter of significance in the written submissions filed on behalf of the husband (page 17) that he and his counsel determined an apportionment of that 60% sum as follows:
§s.79(4) contributions in the range of 35% - 40%; and
§s.75(2) “needs factor” in the region of 20% - 25%.
That acknowledgement of the importance and financial worth of the s.75(2) factors in that interim order is significant and it does properly form a basis for the further consideration of the alteration of superannuation entitlements of the husband in the full and proper context of the relevant facts as determined in this judgment.
ASSESSMENT IN PERCENTAGE TERMS
As to contribution I assess that the wife is entitled to 10% of the husband’s ESSS Superannuation Fund. By my valuation of the s.75(2) factors the wife is entitled to an additional 25% of such superannuation entitlements. I therefore assess that a proper order altering the parties interests in superannuation is an alteration by way of a splittable order in the payment phase for the husband to retain 65% and for there to be a percentage split of 35% to the wife.
ASSESSMENT OF ORDERS SOUGHT BY HUSBAND
I now pause to reflect upon the financial outcome of the orders sought by the husband. With an allocated base amount as sought of $37,782.00, in addition to her other net assets the wife would have received a total sum of $170,978.00. In contrast the husband would retain the balance of this superannuation fund at its valuation date, ($366,028.00) his second superannuation fund, his equity in his home and his long service leave entitlements. Specifically I find that such an order would not do justice and equity as between the husband and wife. Deducting long service leave of $64,000.00 as I found proper pursuant to the interim orders, still leaves what I conclude to be a wholly unjust result.
I do not propose to interfere with the actual division of property made in the consent interim orders of the Court. The husband and wife will each retain their current real property, assets, financial resources and liabilities.
MONETARY EFFECT OF ORDER
On the basis of a 35% alteration in favour of the wife of the husband’s interest in the ESSS Fund the net monetary position of the parties, based on the superannuation valuation of $403,810.00 would be:
Wife
§current assets $133,196.00
§superannuation order $141,333.00
§wife’s superannuation $5,408.00
$279,937.00
Husband§home equity $89,000.00
§long service leave $64,000.00
§ESS Plan $34,500.00
§Superannuation $262,476.00
$449,976.00
Inclusive of the earlier interim orders the difference therefore in dollar terms in favour of the husband is $170,039.00 which must be assessed in the context of his ongoing employment, income, additional superannuation and other issues as evaluated in this judgment.
FOURTH STEP
In accordance with the requirements of case law I have now stood back from the orders and reflected upon the overall determination and judgment, both in percentage terms and in monetary terms and confirm, having considered and re-evaluated all of the evidence, that the proposed orders are just and equitable pursuant to the provisions of s.79(2) of the Act.
The effect of the splitting order in the payment phase is that each of the husband and wife will have to wait for their interests to become payable. One party does not have the immediate access to a ready sum of money with the other party being delayed in payment. The superannuation interests will incrementally increase in value pending payment and this cannot be viewed in isolation from the marital history. Both parties, to the extent of their respective entitlements, will therefore continue to benefit by the earnings and investment income of the Fund.
I made available to counsel prior to submissions the decision of Thackeray AJ in Woollams and Woollams (2004) FCWA 32 (unreported). I am alive to the discussion therein as to the importance of the fourth step, what is called the “section 79(2) factor”. It may well be that greater attention is now given by the superannuation legislation to this step and this is acknowledged in the article by Stephen Bourke, “The Fourth Step in Superannuation Orders”, Current Family Law (February 2004 edition). What I have determined in this fourth step is that my evaluation of the evidence and the determination of the contribution and s.75(2) factors is proper and that it would be just and equitable to divide the superannuation interests as I have concluded and on the basis of a splittable payment in the payment phase.
ORDERS
I order as follows:
IT IS DECLARED:
1.THAT the Court is satisfied that procedural fairness has been afforded the Trustees of the Emergency Services Superannuation Scheme in relation to these orders.
IT IS ORDERED:
2.THAT pursuant to s.90MT(1)(b) of the Family Law Act 1975 that, whenever a splittable payment becomes payable in respect of the interest held by the husband in the Emergency Services Superannuation Scheme the wife, or her heirs, executors or assigns, be then paid 35% of such splittable payment, whether it be then as a lump sum or pension and that there be a corresponding reduction in the entitlement the husband would have received in the ESSS Fund but for this order.
3.THAT these orders are to bind the Trustee of the ESSS Fund to observe their obligations as Trustee under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
4.THAT within seven (7) days the husband serve a sealed copy of these Orders upon the Trustee of the ESSS Fund.
5.THAT within seven (7) days the wife provide to the Trustee of the ESSS Fund full particulars as to her full name, current postal address and date of birth and such other particulars as may be required of her by that Fund.
6.THAT in respect of any superannuation interest of the husband in the ESSS Fund the Trustee of that Fund:
(i)must not make any splittable payment without the leave of the Court; and
(ii)must notify the wife and her solicitors on the record in writing twenty one (21) days prior to the next occasion a splittable payment becomes payable.
7.THAT each party otherwise retain all items of real and personal property in their respective name or possession as at the date of these orders.
8.THAT all extant applications before the Court be otherwise dismissed and the proceedings be removed from the list of cases awaiting trial.
IT IS CERTIFIED
9.THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for each of the husband and wife.
I certify that the preceding 305 paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young
………………………………………………………..
Associate
Date: 18 May 2005
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