BARHAM & BARHAM

[2020] FCCA 109

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARHAM & BARHAM [2020] FCCA 109

Catchwords:
FAMILY LAW – Property Settlement – contributions – inheritance to one party late in marriage – s.75(2) factors.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79

Cases cited:

Stanford v Stanford [2012] HCA 52

Russell v Russell (1999) FLC 92-877

Robb v Robb (1995) FLC 92-555

Jabour & Jabour [2019] Fam CAFC 78

Clauson & Clauson (1995) FLC 92-595

Applicant: MR BARHAM

Respondent: MS BARHAM

File Number: LNC 308 of 2019

Judgment of: Judge McGuire

Hearing dates: 5 & 6 December 2019

Date of Last Submission: 6 December 2019

Delivered at: Burnie

Delivered on: 30 January 2020

REPRESENTATION

Counsel for the Applicant: Mr M Trezise

Solicitors for the Applicant: McVeity Dean

Counsel for the Respondent: Mr M Verney

Solicitors for the Respondent: Rae & Partners (Devonport)

ORDERS

1. That within 42 days of the date of this Order the Respondent Wife will transfer to the Applicant Husband all her right, title and interest in:

   (a)the property situate at A Street, Suburb B in Tasmania and comprised in Certificate of Title;

   (b)the property situate at C Street, Suburb D in Tasmania and comprised in Certificate of Title.

   (c)the Motor Vehicle 1; and

   (d)the boat, camper, trailer and motorbike.

2. That prior to the transfer pursuant to Order No. 1 hereof the Applicant Husband will do all things necessary to effect the registration of a discharge of the parties’ existing mortgages and secured against A Street Suburb B in Tasmania and C Street, Suburb D in Tasmania.

3. That the within 42 days of the date of these Orders the Applicant Husband will transfer to the Respondent Wife all his right, title and interest in:

   (a)the property situate at E Street, Suburb F in Tasmania and comprised in  Certificate of Title Volume; and

   (b)the Motor Vehicle 2.

4. That prior to the transfer pursuant to Order No. 3 hereof the Respondent Wife will do all things necessary to effect the registration of a discharge of the parties’ existing mortgage secured against E Street, Suburb F in Tasmania.

5. That contemporaneously with the transfer orders above, the wife pay to the husband a lump sum of $81,274.

6. That each party will be otherwise solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of this Order and that for this purpose bank accounts are deemed to be in the possession of the party whose name appears on the bank's records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker therein and service pensions are deemed to be the property of the person in receipt of same.

7. That 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 this Order.

8. That paragraphs 8 to 12 (inclusive) of this Order are binding on the Trustee of Super Fund E, member No … (“the Fund”) and it is declared that this Order is made in accordance with Section 90XT(1)(a) of the Family Law Act 1975.

9. That pursuant to Section 90XT(4) of the Family Law Act 1975 the base amount allocated to Mr Barham out of the interest of the Respondent in the Fund is $22,000 (“the base amount”).

10. That in accordance with Section 90XT(1)(a) of the Family Law Act 1975 whenever the Trustee of the Fund makes a splittable payment from the interest of the Respondent in the Fund, Mr Barham shall be entitled to be paid an amount calculated in accordance with part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this Order.

11. That this Order have effect from the operative time and the operative time is the fourth business day after the day on which the final sealed Orders are served upon the Trustee;

12. That until the Trustees of the Fund have effected the splittable payment in favour of Mr Barham pursuant to Order 9 herein the Trustee of the said Fund, the Respondent, personal representatives and any other person or persons acting on her or their behalf be and are hereby restrained from disposing of all or any amount payable to the Applicant and/or his personal representatives received by or held in trust for the benefit of him or them;

13. That a sealed copy of these Orders be served by the solicitors for the Applicant upon the Trustees of the fund within fourteen (14) days of the date of this Order;

14. That there be liberty to apply to each party and the Trustee of the Fund in relation to the implementation of this Order affecting the Respondent’s superannuation interest.

15. That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

IT IS NOTED that publication of this judgment under the pseudonym Barham & Barham is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BURNIE

LNC 308 of 2019

MR BARHAM

Applicant

And

MS BARHAM

Respondent

REASONS FOR JUDGMENT

Applications

1. The Applications before the Court involved parenting issues for the parties’ child, X, born in 2006, together with issues of property settlement.

2. The parties to their great credit presented Consent Orders in respect of X at the commencement of the trial.  Financial matters remain unresolved.

3. The husband is the applicant in an Application filed 3 May 2019. He asks for orders which would distribute the net tangible assets of the parties as to 70% to the husband and 30% to the wife.  The parties agree a superannuation distribution.

4. The wife asks for orders which distribute the assets on a 50/50 basis and she also agrees the superannuation split.

Background

1. The husband is 48 years of age and the wife is 50 years.

2. The parties commenced cohabitation in 2005 and were married in 2008.  After short separations in 2015 and 2018 the parties finally separated in September 2018.

3. X was born in 2006. He is now 13 years of age. The parties have agreed that he will live in an equal shared care arrangement between them.

4. The wife has a son from a previous relationship, L. L was 4 years of age at the date of commencement of the parties’ relationship.  The husband had a child of a previous relationship who lived primarily with the mother and for whom the husband paid child support.

Evidence

1. Both parties gave evidence and were cross-examined. Contrary to the submissions of Counsel for the wife, I found both parties to be honest and candid witnesses albeit each perhaps understandably keen to emphasise those historical facts that may serve to support their cases.  Indeed, the husband was strikingly candid in his admissions against interest as for example in contradicting the proposition put by the wife's Counsel that he had brought into the relationship a car valued at $20,000.  He responded that he had paid $20,000 for the vehicle but its value was most likely less at the time of commencement of cohabitation.

2. The husband adduced evidence from his uncle Mr F whose affidavit was sworn 16 September 2019. Mr F was not required for cross-examination. Mr F confirmed that he and the husband had together purchased a fishing boat in mid-2018 and, although registered in the name of the husband, Mr F and the husband have equal shares in equity.

3. The wife adduced evidence from her current partner, Mr G.  His affidavit is affirmed 17 November 2019. He was required for short cross-examination.  The only import from his evidence is that he and the wife, although now living together, are effectively financially independent of each other.

Relevant Law

1. Section 79 of the Family Law Act 1975 ('the Act') provides for the alteration or distribution of the property of the parties or either of them. 'Property' includes assets, liabilities and financial resources of the parties. Amendments to the Act provide that superannuation is to be 'treated as property' although strictly speaking is not the same as an asset in that it is not usually crystallised.

2. The decision of the High Court in Stanford v Stanford[1] brought a focus back on the sub-sections of s.79 of the Act and, in particular, that a trial Court must firstly be satisfied pursuant to s.79(2) that it must firstly be found to be 'just and equitable' to enter into the consideration of altering or distributing the parties’ property. That consideration is one based on the particular circumstances of the parties and should not be simply conflated with the consideration of contributions in s.79(4) although the contributions may inform the decision under s.79(2) so long as they are considered separately.

   [1] [2012] HCA 52

3. In the matter now before me the marriage is of some 13 years duration. The evidence suggests that the marriage is at an end. The parties share legal and equitable interests in real property and other assets. Each of them claim contributions so as to weigh in their favour in the distribution of those assets and liabilities. In all of those circumstances, I am easily satisfied that it is just and equitable to enter into the consideration under s.79(1) of the Act.

4. The Court must then determine the property pool and the elements that comprise it together with attributing valuation to those elements and hence to the pool.

5. Next the Court considers the contributions by or on behalf of the parties to the attaining, improvement and maintenance of the elements of the property pool.  Contributions may be of a direct or indirect financial type. They may be of a non-financial type including as homemaker and parent.

6. After consideration of the various contributions of or on behalf of the parties, the Court considers whether it is proper, just and equitable to then make any further adjustments between them on account of the matters set out at s.70(4)(d) – (g) including any of the relevant factors set out in s.75(2) of the Act.

1. Despite some controversy, it is generally then considered proper for the Court to take a ‘fourth step’ in standing back and considering whether the actual orders anticipated to be made are 'just and equitable.[2]

   [2] Russell v Russell (1999) FLC 92-877

The Property Pool

1. To the great credit, after the completion of the evidence, the parties are in agreement as to the relevant property pool which comprises the following:

ASSETS
Property at A Street Suburb B	$  485,000
Property at E Street, Suburb F	$  430,000
Property at C Street, Suburb D	$  330,000
Motor Vehicle 1 (Husband)	$   10,800
Motor Vehicle 2 (Wife)	$   12,150
Boat (Husband)	$     7,500
Motorbike (Husband)	$     6,500
Camper & Trailer (Husband)	$     1,600
Wife’s jewellery	$       650
Husband’s furniture	$     5,135
Wife’s furniture	$   10,535
Bank accounts	nominal
Total	$1,299,890
LIABILITIES
E Street, Suburb F mortgage	$    201,243
A Street Suburb B mortgage	$    258,149
C Street, Suburb D mortgage	$    271,084
TOTAL	$    730,476
Net Tangible Assets	$    569,394
SUPERANNUATION
Wife’s Super Fund E	$   387,927
Husband’s Super Fund H	$   343,700
Total Property including Superannuation	$  2,030,497
NET TANGIBLE ASSETS	$  1,300,021

Contributions

1. The major point of dispute between these parties is as to the weight to be given their various contributions.  It is essentially in this respect that the husband partly claims a loading of 20% of the property pool.  The wife argues for equality on contributions and generally.

2. The parties’ commenced cohabitation in 2005. They now agree that as of that date the wife had the following assets and superannuation:

Bank savings inclusive of voluntary redundancy	$ 45,000E
Motor Vehicle	$ 22,000E
Furniture and Contents	$ 10,000E
Super Fund E	$ 26,249.27
Super Fund J	$ 35,000E
Total	$138,249.27

1. There is less certainty or consensus as to the husband's financial position as of that time. He owned a motor vehicle which the wife estimates to have had a value of $20,000. The husband, given the candidacy of his evidence, suggests that it might have been valued at something less than that figure. He says that he had a quantity of furniture and contents but concedes that perhaps not to the value of those of the wife.  He recollects that he would have had savings given that he was in full time work with a salary of about $90,000 per annum at the time. Given the flux of time, however, he has been unable to obtain bank records to assist his regular recollection or evidence of his savings at that time and evidentially his contention can be taken no higher than this “assumption”.

2. The husband says that he also had built-up leave type entitlements which were later cashed in to the benefit of the parties.

3. The husband's best evidence as to his superannuation entitlements was that he had 'around $50,000' of entitlement in 2008 in that he had been working and accruing superannuation since 1989.

4. On the evidence I am comfortably satisfied that the wife ended the relationship in probably a superior financial position than did the husband.  The weight to be afforded such differentiation however, will be minimal given the context and duration of the relationship, subsequent contribution factors and the relatively minor differences of those contributions by each party.

5. The parties agree that they established a joint bank account(s) during the course of the relationship.  In her evidence, the wife claims that she paid $14,000 towards the husband's child support obligations for his son K who lived primarily with that child's mother.  The husband's evidence is that the wife 'contributed' to that child support in the sense of their finances being mixed virtually throughout their relationship and including the use of a joint bank account for general day-to-day expenses. Whilst it is clearly arguable that the wife 'contributed' as such to the child support payable for K, the husband interestingly also argues that he 'contributed' to the support of the wife's son from a previous relationship, L, who lived for a period primarily in the parties’ household[3]. Although strictly speaking, any consideration under Robb is to be focused under s.75(2)(o) of the Act, in reality, I am prepared to find that there were ‘contributions’ by each party to L and K and that these effectively set off each other.

   [3] Robb v Robb (1995) FLC 92-555

6. The wife claims a superior contribution during the course of the relationship by way of what she says were her greater earnings.  The wife at [28] of her trial affidavit provides a table of the parties’ comparative taxable incomes from 2010 until 2019. She does so in order to evidence her assertion that Mr Barham did not 'make contribution to his potential, nor did it match mine.' I note Mr Barham’s evidence volunteered during cross-examination that he considered he may have had earnings superior to or roughly equal to the wife during the earlier years of the relationship and I note that the wife's table does not include earnings for the first five years. In any event, the wife's table from her affidavit appears as follows:

Taxable Income Year	Ms Barham $	Mr Barham $
2010	$96,575	$85,166
2011	$120,123	$69,154
2012	Unable to find	$61,989
2013	Unable to find	$62,165
2014	$125,150	$42,614
2015	$141,515	$88,861
2016	$175,482	$42,471
2017	$191,477	$58,788
2018	$188,171	$59,085
2019	$178,994	$85,980

1. My understanding of the wife's case is that she claims a superior contribution during the course of the relationship, firstly as to her superior earnings and, secondly, that the husband did not to contribute 'to his potential'.

2. I reject the wife's first assertion. Whilst it may be that the wife earned a larger taxable income than the husband from 2010 and certainly this is a factor for consideration, the exercise for the Court is not an accounting or mathematical one in respect of contributions. It is not accidental that s.79(4) of the Act refers to a breadth of contributions being financial and non-financial. Further, there is ample authority to conclude that Courts view marriages as a variety of roles some of which may have a direct financial and observable value but some of which do not. The commitment is emotional as well as financial. Justice is pursuant to s.79 of the Act and pure 'economic' contribution does not recognise the peculiarities of the marriage relationship which involves contributions through fundamentally different sources and activities including non-financial and homemaker-parent contributions. The commitment by the parties to a marriage is not to be understood by pure economic factors. Indeed, this was a marriage that brought the child X into the world. These parties worked on fundamentally different regimes with the husband notably working for lengthy periods at sea but then enjoying equally long periods away from work and hence at home. It was notable that Mr Barham tended to emphasise his non-financial contributions during these periods of being off-work including the care of X and the improvements to the parties’ properties whilst the wife emphasised her direct financial contribution. To put it simply, when parties enter into a marriage relationship then they do so with expectations of each contributing only to their abilities, qualifications and potential. Mr Barham gave ample evidence as to his non-financial contributions including as to the children in the household, his maintenance of the homes, and his improvement of those properties all of which he was able to do so because of the peculiarities of his employment regime as a professional. I do not accept, therefore, the wife's assertion that, firstly, she should receive a loading simply because of her superior earnings. To do so in my view, would be to fall into error in treating such contributions purely on a mathematical basis or even returning to a consideration of “special contributions” and neglecting the very fundamental philosophy of s.79(4) of the Act where contributions must be considered in holistic rather than simple “accounting” fashion. Indeed, the wife’s argument here might attract some merit if the marriage had been a very short one and one without the breadth of contributions contemplated by s.79(4) and the inherent understanding of the obligations of participants to the marriage contract. This is not such a marriage. There is a child of the marriage. It is a relationship which endured some thirteen years. The contributions were many and varied and it is, in my view, relevant to consider the contributions in the sense of attributing maximum potential rather than simply conducting a mathematical accounting exercise. Secondly, on the evidence, Mr Barham did work his employment to its potential and further contribute during the benefits he had of working regimes such as seven days on/seven days off for a long part of this relationship.

3. Similarly, the wife contends a contribution by her to the husband undertaking a course at the M College in Launceston in order to improve his qualifications. The evidence is that he attended the course for only a matter of weeks and did not obtain his qualifications. In any event, and again, the importance of such evidence is that it is clear that these parties agreed that he would attend the M College. The fact that he did so pursuant to that agreement should and could not result in the wife claiming a superior contribution. To do so would go against the very notion of the marriage relationship and commitment as understood by S.79 of the Act and the authorities which have historically emanated from it.

1. In summary, therefore, I am satisfied on the evidence and on the balance of probabilities that each of these parties contributed during the course of their relationship to an equal degree by reason of their employment, homemaker and parent responsibilities.

2. In 2017 and therefore relatively late in this marriage the husband received an inheritance from his late father's estate. The inheritance was initially via a half interest in a property at Suburb B together with his brother and where the parties then purchased the brother’s share for approximately $265,000. The balance of the husband's inheritance was by way of cash and shares to a value of approximately $124,000. The total of his benefit was therefore approximately $389,000E. The wife says that she indirectly contributed by reason of joining her name on the mortgage obtained to pay out the husband's brother on the Suburb B property.  This is a contribution by her undoubtedly, she also contributed in other even more obscure and indirect fashions. However, the fact of and the quantum of the inheritance by the husband was a substantial contribution and injection into this relationship and one that occurred at a time and in the context of the relationship such that it should be given some real consideration and weight.

3. The task for the Court, therefore, is to evaluate this notable contribution as to its quantum, timing and context in respect of the property pool as a whole but to be careful to consider it only within the myriad of other contributions made by each of these parties to this marriage[4]. It is now some 14 years since the commencement of these parties’ cohabitation. There have been many and varied contributions, both direct and indirect.  The inheritance is substantial in the context of the total property pool. It was introduced late in the relationship.  The husband's Counsel urges a 10% loading to Mr Barham with emphasis on the fact and circumstances of the inheritance.  Whilst I am not bound by simply choosing between the proposals of the parties, such an adjustment would certainly be within the range of my consideration and determination. I am of the view therefore that an adjustment of 10% to the husband on account of a consideration and weighing of all contributions would be proper, just and equitable with some emphasis by weight to the husband’s inheritance.

   [4] Jabour & Jabour [2019] Fam CAFC78

Section 75(2) factors

1. The parties have agreed that they will share X's care on an equal time basis.

2. The wife has re-partnered but I am satisfied that she is effectively financially independent from Mr G.  The best evidence is that the wife's income is a gross of approximately $218,000 per annum. It is here that I am of the view that I take into account the potential for the husband as an income earner rather than simply the fact of any lifestyle choices that he makes. On the wife’s own evidence the husband's taxable income maximised at around $86,000 per annum for the financial year ending June 2019.  I take into account that he suffers an injury but that I do not have any medical evidence in proper form to satisfy me that this will permanently hinder his employment prospects. He says that he has an ambition to become a foreman at a vegetable growing/processing entity.  Even taking into account his potential to return to his previous employment as a professional, his income would not approach that of the wife or be likely to be more than half of that of the wife. The relevance of this, of course, is that the wife should be more able to financially recover from the marriage breakdown and the distribution of assets as well as more able to superannuate herself into the future.  Again taking into account the quantum of the property pool as to the net value of the tangible assets are just $569,394, and where any adjustment should be viewed with an element of reality rather than by simple percentages[5], I am satisfied that a further adjustment for the husband of 10% would be just and equitable.

   [5] Clauson & Clauson (1995) FLC 92-595

Conclusion

1. In conclusion as to the tangible assets of the parties, therefore, I am of the view that they should be distributed as to a net 70% to the husband and a net 30% to the wife.  The husband would therefore be entitled to a net of $398,576 and the wife to a net of $170,818.  With the distribution of assets at value as above and where I understand the assets to be already in the hands of the “owner”, I calculate that the wife would then make a cash adjustment on the husband in a quantum of $81,274.

2. The parties are agreed that there should be a superannuation split of $22,000 from the wife's entitlement with Super Fund E to the husband and so as to providing equality of superannuation entitlements for each of them.

I certify that the preceding thirty seven (37) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 30 January 2020