Baxter and Baxter

[2013] FCCA 944

FEDERAL CIRCUIT COURT OF AUSTRALIA

BAXTER & BAXTER [2013] FCCA 944

Catchwords:
FAMILY LAW – Property – superannuation splitting – interpretation of previous consent orders – wife to pay husband’s costs.

Legislation:

Family Law Act 1975, s.79A

Applicant: MR BAXTER

Respondent: MS BAXTER

File Number: SYC 3584 of 2009

Judgment of: Judge Altobelli

Hearing date: 16 July 2013

Date of Last Submission: 16 July 2013

Delivered at: Sydney

Delivered on: 8 August 2013

REPRESENTATION

Counsel For The Applicant: Mr Johnston

Solicitors For The Applicant: Johnston Vaughan Solicitors

Counsel For The Respondent: Mr Gruzeman

Solicitors For The Respondent: McBride Harle & Martin Lawyers

ORDERS

1. Pursuant to s.79A(1A) of the Family Law Act 1975 (as amended) the order made by consent of this Honourable Court on 28 July 2010 be varied such that the whole of Order 4 (namely order 4.1, 4.2, 4.3, 4.4 and 4.5) be set aside and the following orders be inserted in lieu thereof:

2. In accordance with s.90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of Mr Baxter’s interest in the (omitted) Super Plan, the Trustee shall pay to the wife the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $200,355 and there shall be a corresponding reduction in the entitlement of the person to whom a splittable payment would have been made but for these orders.

3. Order 4 has the effect from the operative time and the operative time for the purpose of these orders is the fourth (4^th) business day after service of these orders upon the Trustee of the (omitted) Super Plan.

4. The wife is to pay the husband’s costs in the sum of $8,736 within 30 days.

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYC 3584 of 2009

MR BAXTER

Applicant

And

MS BAXTER

Respondent

REASONS FOR JUDGMENT

Introduction

1. By way of an application field 21 January 2013 the husband seeks the following orders:

   a)That Order 4 of the Orders made on 28 July 2010 be vacated pursuant to s.79A of the Family Law Act 1975.

   b)Pursuant to s.79A(1A) of the Family Law Act 1975 (as amended) the order made by consent of this Honourable Court on 28 July 2010 be varied such that the whole of Order 4 (namely order 4.1, 4.2, 4.3, 4.4 and 4.5) be set aside and the following orders be inserted in lieu thereof:

   c)In accordance with s.90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of Mr Baxter’s interest in the (omitted) Super Plan, the Trustee shall pay to the wife the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $200,355 and there shall be a corresponding reduction in the entitlement of the person to whom a splittable payment would have been made but for these orders.

   d)Order 4 has the effect from the operative time and the operative time for the purpose of these orders is the fourth (4^th) business day after service of these orders upon the Trustee of the (omitted) Super Plan.

2. By way of a response filed 25 March 2013 the wife sought orders that the application be dismissed and that the husband pay her costs.

3. Each of the husband and the wife filed affidavits in support of their applications.

4. For all practical purposes an issue has arisen between the parties about the interpretation and implementation of order 4 made by consent on 28 July 2010.  That order states:

   4. That pursuant to s.90MT(4) the amount equal to 50% (“the base amount”) of the husband’s superannuation interest in the (omitted) Superannuation Fund (“the fund”) be allocated to the wife by way of a splitting order as follows:

   4.1 That, in accordance with paragraph 90MT(1)(a) of the Act:

   a. the Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   b. the Husband’s entitlement in the fund, is correspondingly reduced by force of this order.

   4.2 That the Trustee of the fund (the Trustee) as trustee do all things necessary to:

   a. calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the Wife by these orders and

   b. pay the entitlement whenever the fund makes a splittable payment out of the Husband’s interest in the fund.

   4.3 That this order have effect from the operative time and the operative time for this order is the date upon which the husband serves the wife with a copy of the Trustee’s consent to this order, which consent shall be sought by the husband within 48 hours of a sealed copy of these Orders becoming available.

   4.4 That the Trustee do all such acts and things and sign all such documents as may be necessary, including but not limited to, exercising the request pursuant to r.7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the husband’s interest in the fund to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.

   4.5 That this order binds the Trustee of the fund.

5. As it turns out the trustee of the said superannuation fund has interpreted and implemented this order on the basis that the wife would receive 50% of the husband’s superannuation at the time of his retirement, whenever that would be.

6. At paragraph 8 of the wife’s affidavit sworn 22 March 2013 she deposes:

   Orders were made in this matter on 28 July 2010 and these were final property Orders.  At the time of settlement and in respect of the husband’s superannuation held with the (omitted) Superannuation Fund I understood that from the settlement, I would be receiving 50% of the Applicant’s interest in the fund.  Accordingly I entered into the Orders by consent on that basis.  I oppose the orders sought by the Applicant.

7. By contrast it was the husband’s case that his superannuation entitlement at the date of the orders, having an agreed value of $400,709.30, was to be split into two funds with each party having their own fund.  Thus, contrary to what has in fact occurred, he would be deriving the benefit of his post-order contribution and other accretions to his fund, and the wife enjoying the benefit of accretion to her fund.

8. Despite the wife’s evidence at paragraph 8 of her affidavit, her evidence in cross-examination was quite different.  She explained that her understanding was that she would get her half share of the superannuation, about $200,000, and do with it as she wished.  She agreed that it was fair and equitable at the time the orders were made.  She agreed that she was expecting a return on her $200,000.

9. The evidence of both parties indicates that the orders made by consent on 28 July 2010 were frustrated by how the trustee interpreted and implemented the relevant super-splitting order.  The wife wanted autonomy to deal with her share of the superannuation fund as she wished, and for it to derive some return for her.  The husband wanted autonomy to retain his share of the fund and to make further contributions to it for his sole benefit.

10. In view of the wife’s evidence in cross-examination her closing submissions were presented on quite a different basis to her application.  It was conceded that the order did not reflect the parties’ intentions.  It was conceded that it needed to be varied under s.79A.  The issue was how that should be achieved.  Her counsel submitted that order 4 made 28 July 2010 should simply be varied by inserting a figure representing half the current value of the husband’s superannuation.  It was agreed between the parties that the current value is $462,000.  Implicit in this argument was the contention that the wife was entitled to derive the benefits of accretions to her share of the fund source the date of the orders.

11. There are two major problems with the submissions made on behalf of the wife.  The first one is that the correspondence with the trustee, abundantly annexed to the respective affidavits, makes it clear that it cannot accept an order in terms of that used in the consent order.  Merely substituting a figure does not overcome this.  The second problem is that the only evidence before the court, which came from the husband, is that the totality of the contributions made by him and his employer in the post-order period is greater than the increased value of the fund.  Thus the wife could not establish that it was somehow unjust or unequitable to her to be limited to half of the agreed value of the fund at the date of the consent orders.

12. In the circumstances therefore, and relying on s.79A(1)(a) (or any other circumstance) or possibly s.79A(1)(b), the orders made by consent on 28 July 2010 should be varied in accordance with the orders sought by the husband. 

13. The husband applied for costs assessed in the sum of $24,915.  On his behalf it was contended that:

    a)The wife’s financial circumstances evidenced by her Financial Statement sworn 22 March 2013 demonstrate a capacity to meet an order for costs.  That is clearly the case.

    b)The wife was wholly unsuccessful in the proceedings.  That is clearly the case.

    c)The wife received an offer to settle the proceedings on the morning of the hearing that would have given her the benefit of the order proposed by the husband, but with the figure of $231,000 instead of $200,355.  The making of the offer was conceded by the wife.

14. On behalf of the wife it was acknowledged that the evidence she gave in cross-examination was different to that in her affidavit.  However the error in the original order was not her fault and she was, in the circumstances, entitled to rely on those orders.  While the wife’s Financial Statement does, prima facie, demonstrate a capacity to pay costs, the fact remained that she was in receipt of a modest income and had three adult children in her care.

15. Notwithstanding the matters contended on behalf of the wife a costs order is appropriate for the reasons argued on behalf of the husband.  This litigation was unnecessary.  The wife’s refusal to compromise was unreasonable.  Her failure to take advantage of the exceedingly generous offer of compromise made on the day of the hearing is bizarre, in the absence of any explanation for declining it.  Not only was the husband put to unnecessary cost, but scarce public resources had to be utilised to hear this case and then adjudicate on it.  The wife should pay the husband’s costs.  The wife should count herself lucky that indemnity costs were not sought.

16. Costs will be assessed under the Federal Circuit Court Rules Schedule 1 and as follows:

Item 1	Initiating Application up to completion of the first court date Daily hearing fee – half day	$1,994 $997
Item 6	Preparation for final hearing 1 day matter	$4,250
Item 13	Daily hearing fee – half day	$997
Item 12	Advocacy loading – half day	$498
$8,736

1. The wife will have 30 days to pay these costs.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:  8 August 2013