BAXTER & BAXTER
[2010] FamCAFC 183
•17 September 2010
THE FAMILY COURT OF AUSTRALIA
| BAXTER & BAXTER | [2010] FamCAFC 183 |
| FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – appeal from a Federal Magistrate’s decision – where the Federal Magistrate concluded that the parties’ non-superannuation assets should be divided 55 per cent to the wife and 45 per cent to the husband with each retaining their own superannuation interests – where it was found that the Federal Magistrate had misunderstood the wife’s case in relation to non-financial and homemaker contributions - where it was found that the Federal Magistrate had applied an inconsistent approach to his treatment of the parties’ superannuation assets – appeal allowed – re-determination of the matter. FAMILY LAW - APPEAL – COSTS – Costs certificates. |
| Family Law Act 1975 (Cth) s 75(2), s 79(4) Federal Proceedings (Costs) Act 1981 (Cth) |
| Allesch v Maunz (2000) 203 CLR 172 Coghlan & Coghlan (2005) FLC 93-220 Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Mallet v Mallet (1984) 156 CLR 605 |
| APPELLANT: | Mrs Baxter |
| RESPONDENT: | Mr Baxter |
| FILE NUMBER: | CAC | 607 | of | 2007 |
| APPEAL NUMBER: | EA | 26 | of | 2009 |
| DATE DELIVERED: | 17 September 2010 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Bryant CJ, Finn and Boland JJ |
| HEARING DATE: | 7 December 2009 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 30 January 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 35 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Millar |
| SOLICITOR FOR THE APPELLANT: | Farrar Gesini and Dunn |
| COUNSEL FOR THE RESPONDENT: | Mr Brzostowski SC |
| SOLICITOR FOR THE RESPONDENT: | Galland Elder Lulham Solicitors |
Orders
That the appeal against the orders of Federal Magistrate Neville made on 30 January 2009 (“the orders”) be allowed.
That Order 2 of the orders be varied to read as follows:
“The wife shall within 60 days of the date of the Full Court’s orders pay to the husband the sum of $36,217.00.”
That Order 4(c) of the orders be varied to read as follows:
“Of the balance then remaining 30 per cent be payable to the husband and 70 per cent to the wife.”
That there be no order for costs in relation to the appeal against the orders.
That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by her in relation to the appeal.
That the Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent husband in respect of the costs incurred by the him in relation to the appeal.
(a) That the time for the wife to file a Notice of Appeal against the order with respect to costs made by Federal Magistrate Neville on 23 June 2009 be extended to 60 days after the date of the Full Court’s orders.
(b)In the event that the wife files such a Notice of Appeal she shall at the same time file and serve an appeal book (the contents of which should be determined by the Appeal Registrar in default of agreement between the parties) together with written submissions in support of the appeal.
(c)That the husband have 30 days after service of the Notice of Appeal and written submissions by the wife, to file and serve submissions in response to the wife’s submissions.
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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 26 of 2009
File Number: CAC 607 of 2007
| Mrs Baxter |
Appellant
And
| Mr Baxter |
Respondent
REASONS FOR JUDGMENT
This is an appeal by the wife against orders with respect to property settlement made by Neville FM on 30 January 2009 in proceedings between Mrs Baxter (“the wife”) and Mr Baxter (“the husband”) under the Family Law Act 1975 (Cth) (“the Act”).
In summary, the orders which are appealed (and as amended under the slip rule) provided that the husband was to transfer to the wife the former matrimonial home (Order 1); that the wife was to pay to the husband the sum of $54,324.90 (Order 2); and that in the event of default by the wife, the home was to be sold with its net proceeds being divided as to 45 per cent to the husband and 55 per cent to the wife (Order 4 and 5). Other orders, which were not appealed, provided for each party to retain their superannuation and insurance policies and other personal property and for each to be solely responsible for certain specified liabilities.
Again in summary, the grounds of appeal as ultimately pressed on behalf of the wife, asserted that the Federal Magistrate:
·had failed to give adequate reasons for his orders and to make necessary findings of fact regarding the parties’ contributions, and that he had misapprehended the wife’s case in relation to non-financial contributions;
·had erred in determining that the wife did not contribute to, and thus was not entitled to share in, the husband’s superannuation entitlement; and
·failed to give sufficient weight to the factors in s 75(2) of the Act which favoured the wife with the result that the orders made were not just and equitable and the resulting division of property was “manifestly inadequate” to the wife.
The husband opposed the appeal and sought to maintain the Federal Magistrate’s orders. However, in the event that we found substance in the appeal, the husband sought, as did the wife, that we should endeavour to re-determine the parties’ applications for property settlement rather than order a new trial.
We propose in these reasons first to set out the factual background, and then to consider his Honour’s reasons for judgment and to do so against the background of the complaints raised by the grounds of appeal.
Factual background
The husband was 33 and the wife 31 at the time of the Federal Magistrate’s orders. The parties began a relationship in 2000; they married in 2001; and separated in 2006. They were subsequently divorced and their property settlement proceedings were heard by the Federal Magistrate in September and October 2008, with orders being made and reasons for judgment delivered on 30 January 2009.
The husband has worked in a Commonwealth Department since 1993; he was earning approximately $87,500.00 per annum at the time of the trial. The wife has worked full time with a Canberra based research institute since September 2003; she was earning $48,000.00 per annum with some casual earnings of $144.00 per week at the time of the trial. She had previously been a student and part-time worker. She had given birth to a still-born child in May 2003. She has some medical problems which will be referred to in more detail later.
The Federal Magistrate’s reasons for judgment
(i) The identification of the property of the parties
After setting out the factual background and explaining the orders sought by each party, his Honour made his findings concerning the property of the parties. In so doing, he determined that he would not include the value of the parties’ motor vehicles or other chattels. He also determined that he would not take into account a debt of $50,000.00 which the husband had incurred to his father after separation.
His Honour then concluded in paragraph 21 of his reasons that the net asset pool could be represented in the following way:
Assets (Non-Super)
House $355,000
Assets (Super)
Husband$158,791
Wife$37,701
Combined Assets
Total$551,492
Liabilities
Mortgage$213,000
Credit Cards $21,278 (W)
Total$234,278
Total Net Asset Pool $317,214
There was no challenge before us to his Honour’s findings or conclusion in relation to the parties’ property. Furthermore, in the event that it is necessary for us to re-determine the matter, neither party sought that there be any alteration to the assets and liabilities as represented in his Honour’s table, nor sought to lead any further evidence (Allesch v Maunz (2000) 203 CLR 172).
(ii) The findings as to the parties’ contributions
In relation to the parties’ contributions his Honour dealt first with their financial contributions. He concluded in the following paragraphs that financial contributions, apparently both to superannuation and non-superannuation assets, favoured the husband:
24.… Having regard to (a) the income disparity between the parties throughout the marriage, (b) the fact that in the early part of the relationship [the wife] was studying while [the husband] was in paid employment, and (c) that [the husband] had contributed to his superannuation for a significant period before the commencement of the relationship, it cannot but be the case that financial contributions favour [the husband]. Indeed, Mr Howard, for [the wife], said as much in his submissions. (footnotes omitted)
…
26.… It will be adequate enough … for the purposes of these reasons, to record that I regard the financial contributions to favour [the husband]. Unsurprisingly, he seeks a split, in relation to superannuation, along the lines of 60:40 in his favour.
Then in relation to the parties’ contributions to superannuation and presumably following what he had said in the last sentence of paragraph 26, his Honour continued in paragraph 27:
I agree broadly with the submissions regarding contribution to superannuation on behalf of both parties. This was to the effect that for the life of the marriage the contributions were roughly equal. But at least on the basis of him having contributed solely to his superannuation for a significant period prior to the marriage, and for the fact that it is somewhat difficult to see how [the wife] contributed to his superannuation during the marriage while she was also working and contributing to her own superannuation (to some degree at least), there should be a modest adjustment or appropriate allowance on contribution to superannuation in favour of [the husband]. (footnotes omitted)
Earlier in relation to non-financial contributions, his Honour had said:
25.There was also some contest, fortunately not an overly major one, in relation to the claimed – and disputed – non-financial contributions to the marriage. In submissions, there was – appropriately – not such a large dispute. For example, Mr Howard, for [the wife], submitted that in relation to the non-superannuation pool “the contributions should be relatively equal.” This elided, somewhat, the usual distinction between financial and non-financial contributions. For his part, Senior Counsel for [the husband] submitted that the “non-financial contributions ought to be given approximately equal value….” (footnotes omitted)
Later in paragraph 28 his Honour said in relation to non-financial contributions:
I agree with the submission of both parties that the non-financial contributions should be treated as being approximately equal.
Then in the context of the s 75(2) matters, his Honour indicated (in paragraph 30) that he had some sympathy for the wife’s submission that she should have an adjustment of 10 per cent “or perhaps even 15%” on account of health and income issues – although he also indicated that 15 per cent might be “a tad high”.
Having referred under the heading “‘Just & Equitable’ Considerations” to the awards made in certain other cases, his Honour expressed the view:
33.At the end of the day, having regard to the financial contributions, which favour [the husband], and the s.75(2) factors, which favour [the wife], it may be readily argued (or at least reasonably arguable) that they almost cancel each other out.
His ultimate conclusion both in relation to contributions and to a s 75(2) adjustment was as follows:
39.In my view, as with a great many cases, there exists here something of a delicate balance between not only the competing orders sought but also the facts which, in large measure, oscillate around the greater financial contributions of [the husband] and the greater s.75(2) factors of [the wife]. And such things take place against a backdrop of a short marriage and that both parties are still young people with a significant working life in front of them.
40.In these circumstances, were I to express matters in percentage terms … I would allow [the husband] 10% in relation to financial contributions, and a 15% adjustment to [the wife] under s.75(2). This would leave a net adjustment in favour of [the wife] of 5%. But I hasten to add that this should apply only in relation to the non-superannuation assets.
41.In the event that [the wife] wishes to keep the former matrimonial home, she would obviously need to pay [the husband] the monetary equivalent of 45% of its net value. On my calculations, she would need to pay him $63,900, being 45% of $142,000. She would also, of course, need to assume responsibility for the mortgage of $213,000 (or whatever its actual value is as at the agreed date of settlement).
42.In the event that [the wife] is unable to pay out [the husband] within 60 days of the date of these orders, the former matrimonial home is to be sold and the net proceeds of sale are to be divided 55% in favour of [the wife] and 45% in favour of [the husband].
43.In either eventuality, both parties should keep their superannuation funds intact and untouched by the other party.
Thus, and notwithstanding the figures appearing in paragraph 41 of his reasons, it would seem that his Honour’s intention was to award the wife 55 per cent and the husband 45 per cent of the non-superannuation assets with each then keeping their own superannuation interest, being for the husband valued at almost $159,000.00 and for the wife only at about $38,000.00.
(iii) The alleged misapprehension of the wife’s case in relation to non-financial contributions
The first complaint made on behalf of the wife in support of her appeal asserts that his Honour misapprehended her case in relation to non-financial contributions, and that this misapprehension undermines the validity of his reasoning.
It will be recalled that in paragraph 25 of his reasons, his Honour referred to a “contest” in relation to non-financial contributions of the parties. It would seem (although we cannot be certain) that by the expression “non-financial contributions” his Honour was referring both to non-financial contributions of the type mentioned in s 79(4)(b) as well as to contributions to the welfare of the family or homemaker contributions of the type mentioned in s 79(4)(c).
But then in paragraph 28 his Honour said that he agreed with the submission of both parties that their non-financial contributions should be treated as approximately equal.
The wife had given specific details of her homemaker contributions and other non-financial contributions to the parties’ property in paragraphs 27 to 31 of her affidavit affirmed on 5 August 2008, which were as follows:
27. Throughout the relationship I was primarily responsible for the housework and the primary homemaker. [The husband] loved his fishing and his football and was often away from the house on the weekends and at times during the week.
28. In an average week, I would do the following:
(a) All the cooking for myself and [the husband]
(b) All the shopping for myself and [the husband]
(c) All the cleaning of the house
(d) All the washing of the dishes
(e) All the washing of the clothes for myself and [the husband]
(f) All the ironing of the clothes for myself and [the husband]
(g) The majority of the gardening
(h) The majority of the feeding the dogs
(i) The majority of the washing of the dogs
(j) Managing our finances and paying bills
29. [The husband] did little to contribute to the cleaning and maintenance of our home. I recall on occasions he would clean his car and also make an effort to clean his fishing gear. On occasions he would help me wash the dogs. I estimate that he mowed the lawn approximately 3 to 4 times per year.
30. I recall in approximately July or August 2005 [the husband] and I decided to paint the house. I recall we walked into Bunnings Warehouse one day and he decided to buy some paints as the house needed a coat of paint. After we had painted half a wall, about 2 x 2m, [the husband] stopped and did not assist with the rest of the painting. From that point onwards, instead of sharing the task, I did the painting myself. I painted the 2 living rooms, 2 hallways, the main bedroom, the kitchen, the bathroom and the laundry. [The husband] did not assist.
31. In 2005 I recall [the husband] and his brother … put up a colour bond fence with the help of the neighbours.
The husband took some issue with these claims by the wife in paragraphs 27 to 31 of his affidavit sworn on 19 August 2008, asserting with reference to the wife’s numbered paragraphs:
27. I deny the contents of this paragraph. Throughout the marriage, housework was shared reasonably equally. It was not often that I would be away from the residence without the [wife]. However, towards the end of our marriage, both the [wife] and I began to spend more time apart. During this time the [wife] travelled twice to Tonga on her own.
28.I deny the contents of this paragraph. I enjoyed cooking and would often cook meals during the marriage. I frequently did the grocery shopping. I cleaned the house and also did my share of the washing up. I often washed and ironed my clothes and I also did the majority of the gardening. It was also my sole responsibility for cleaning up after the dogs. The [wife] refused to pick up droppings.
29. I deny the contents of this paragraph. I contributed equally to the cleaning and maintenance of the residence. I also cleaned our motor vehicles and looked after the dogs and lawn.
30. I admit the contents of the first sentence of this paragraph. I deny the contents of the third, fourth and fifth sentences of this paragraph. The painting of the house was shared equally by myself and the [wife].
31. Agreed, however our neighbours did not provide much assistance in erecting the fence. In addition my father and I enclosed the pergola and built sliding doors to improve the premises. Much of the expense for this work was met by my father.
The husband was cross-examined briefly about his availability to assist in the home given his outside sporting interests (at transcript, 16 September 2008, p 24-25). But nothing of substance emerged from that cross-examination. Importantly the wife was not cross-examined at all about her evidence of her homemaker and other non-financial contributions.
In final submissions senior counsel for the husband sought a contribution finding of 55 per cent to 45 per cent in favour of the husband. But this would seem to have been on the basis of financial contributions with the submission being, as recorded by his Honour, that non-financial contributions ought to be given approximately equal value.
The final submission made on behalf of the wife was as follows:
So in relation to the non-superannuation pool, we therefore say that the contributions should be relatively equal. Neither party, with the exception of the superannuation entitlements, came into the relationship with any significant assets. The husband suggests in his material that he had some assets, but really when you look at it there was nothing of significance. The only one that might have been there was the motor vehicle, which was gifted in any event and not working at the time of the relationship. During the marriage there was a greater contribution by the husband by way of cash, income earned. The wife we submit made the greater contribution by way of homemaker. Now I understand that – I mean, the wife wasn’t cross-examined about that. I don’t necessarily criticise my friend about that except that she gives great detail about the things that she was involved in. Now, it’s obviously not appropriate that we should go through in cross-examination each of those things but nonetheless she gives that sort of detail. What the husband does is a bland assertion. His assertion is effectively in one or more lines, but not many lines, that says, “I was equally responsible.” He doesn’t give the sort of detail that the wife gives in relation to her contributions. But even were your Honour not on the same page with me with that, your Honour certainly needs to look at this case as the parties did during the relationship, that they were in a partnership, and the parties contributed their entire income towards joint purposes, including paying towards superannuation entitlements, and they shared in some proportion, whatever – we say wife greater proportion, husband less, but they shared the household tasks as well, and in that situation we say that your Honour would find that contributions are equal or relatively so. As it happens, there’s only a 5 per cent disparity between my friend and I so I don’t think that that’s a matter that will occupy much of your Honour’s time in this decision. (transcript, 16 September 2008, p 55-56)
While perhaps not entirely clear, we nevertheless, think that the better view of the above passage must be that what was being sought on behalf of the wife was a finding of equality of all contributions (at least in respect of the non- superannuation contributions) on the basis that while the husband had made the greater financial contribution, the wife had made the greater non-financial contribution.
Thus, there is force in the wife’s contention that his Honour was mistaken when he said in paragraph 28 of his reasons, that both parties had submitted that their non-financial contributions should be treated as approximately equal. It would seem that because of this misapprehension, his Honour did not make a finding in relation to the parties’ non-financial contributions, but rather proceeded on the basis that such contributions on the part of each party could be set off against each other, and it was therefore only the husband’s greater financial contributions which would sound in the ultimate contribution finding.
This was clearly a mistake on his Honour’s part which would require our interference with his decision. But before reconsidering his Honour’s contribution assessment, and thus his ultimate award, we will consider the next matter raised by the wife in support of her appeal.
(iv) The challenge to the Federal Magistrate’s approach to the parties’ superannuation entitlements
In support of the wife’s complaints relating to the adequacy of his Honour’s reasons and the treatment of the parties’ superannuation, it was submitted by her counsel that it appeared from the asset pool, set out in paragraph 21 of his Honour’s reasons, and then from his consideration of the parties’ financial contributions in paragraph 24, that his Honour proposed to deal with the superannuation and the non-superannuation assets as one pool; but that then in paragraph 27 and later paragraphs, he seemed to move to a two pool approach.
We agree that his Honour does appear to have moved from a one pool approach in paragraphs 21 and 24 of his reasons to a two pool approach in paragraphs 27, and also then in paragraphs 40 and 41.
It was open to his Honour on the basis of authorities such as Coghlan & Coghlan (2005) FLC 93-220 to treat the superannuation and non-superannuation assets either as one pool or as two pools. But it was, of course, necessary for the treatment to be consistent throughout his reasoning.
We did not understand senior counsel for the husband to assert that there was not an inconsistency in his Honour’s approach. Rather the position taken on behalf of the husband appeared to be that nothing of real consequence could flow from any such inconsistency because in a short marriage between relatively young people their contributions to each other’s superannuation entitlement would be minimal, and that in such a case it would be just and equitable for each to retain their own superannuation entitlements.
It seems to us having regard to what his Honour said in paragraph 27 of his reasons, that this was also broadly his reasoning, although he also appears to have recognised a greater contribution by the husband to the parties’ superannuation entitlements overall. This must, in our view, have been a correct assessment given the much longer period for which the husband had through his employment been contributing to his superannuation.
That having been said, however, it also has to be said that his Honour’s reasoning in relation to the parties’ superannuation entitlements is not sufficiently clear to enable us to be satisfied that his orders, in so far as they either related to the future division of those entitlements, or were dependant on an assessment of contributions to those entitlements, were just and equitable. Indeed the following calculation by counsel for the wife indicates that the ultimate result may well not have been just and equitable to the wife:
“… The wife received 55% of the non superannuation assets and just 19% of the superannuation interests. The husband received 45% of the non superannuation assets and 81% of the superannuation interests. As a result the value of the property and superannuation received by the wife was about 33% of the total net asset pool of $317,214.00 …”
The wife’s case in relation to the inadequacy of her entitlement would seem to receive further support when regard is had to the s 75(2) adjustment made in her favour, which was only made in relation to the non-superannuation assets. We therefore turn now to consider that adjustment.
(v) The challenge to the s 75(2) adjustment made by the Federal Magistrate
In the context of recording the factual background to this case, having observed that the husband had “no health issues”, his Honour made the following findings having regard to the evidence concerning the wife’s health problems – the wife raises no issue with respect to any of these findings:
5.… [The wife], however, suffers from migraine headaches and has a medical condition called essential thrombocytosis (a benign bone marrow disorder), which is a chronic myeloproliferative disorder caused by an underlying condition known as essential thrombocythaemia. Her condition is controlled by medication.
6.While [the wife’s] GP’s report was more concerning regarding the prognosis and [the wife’s] capacities for work and beyond, that of her treating specialist haematologist, [Dr P], was rather more hopeful. His unchallenged report (attached to his affidavit of 13th August 2008) regarding her condition stated (at par.4): “[it] can usually remain under good control with ongoing medication … for many years. Apart from the inconvenience of taking regular medications and attending for follow up consultations every 2-3 months, this condition does not appear to be impacting severely on her quality of life. … [Based on various studies] and her clinical situation I would estimate [the wife] would have a life expectancy of greater than 20 years from the time of diagnosis in 2003.” (footnote omitted)
7.[Dr P] also stated in the same report (at par.5): “[the wife’s] capacity for work should not be significantly impaired.” [Dr P] concluded by stating that, in his view, [the wife’s] condition should be stable “for at least the next five years.” At the very least, it is clear that [the wife’s] has a medical condition where [the husband] does not, and that she will require some degree of medication for the rest of her life. Thus, “health” is a particular consideration in these proceedings.
When he then came to consider whether an adjustment was required on account of the s 75(2) matters, his Honour said:
29.To a significant degree, I have already adverted to if not addressed the main factors in this regard. They relate to [the wife’s] health issues, the income disparity between the parties (which is likely to extend to the capacities and opportunities for further advancement in their respective areas of employment), their relatively young ages, the disparity in their current superannuation entitlements, and their current levels of indebtedness, which are relatively modest apart from the mortgage.
30.[The wife] seeks an adjustment in her favour of 10%, or perhaps even 15%, in relation to income and health issues. I have some sympathy towards such a submission. Methinks, however, that the higher figure might be pitched a tad high in the light of recent jurisprudence. Be that as it may, in my view it is best to speak about and deal with such matters in the context of a consideration of what is “just and equitable”, which (as indicated) also requires an appraisal of recent cases that deal with relatively short marriages, of which this is something of an example. (footnote omitted)
Having referred to certain cases, his Honour then observed in paragraph 33 (which is set out earlier in these reasons) that the financial contributions which favoured the husband and the s 75(2) factors which favoured the wife “almost cancel each other out”. He can be seen as making a similar observation again in paragraph 39, before concluding in paragraph 40 that he “would allow [the husband] 10% in relation to financial contributions, and 15% adjustment to [the wife] under s.75(2) … [which] would leave a net adjustment in favour of [the wife] of 5%”. But he then added (without apparent explanation) that this adjustment would only apply in relation to the non-superannuation assets.
The wife relies on this application of the s 75(2) adjustment only to the non-superannuation assets to demonstrate the inadequacy of the award to her (in addition, of course, to her other complaints previously discussed).
Given the difficulties which we have earlier found with his Honour’s reasoning in relation to the parties’ contributions and the consequent need for our intervention, little purpose will be served by saying more about his s 75(2) adjustment. It is sufficient to say only that while his findings regarding the wife’s health problems cannot be criticised, it is his apparently inconsistent approach to the treatment of the parties’ superannuation assets which have made it impossible for us to be satisfied about the overall justice and equity of his orders.
Re-determination of the property settlement proceedings
As mentioned earlier, both parties sought that if we found merit in the grounds of appeal (as we have), then we should endeavour to re-determine the matter ourselves on the basis of the material which was before the Federal Magistrate. This is not an easy task given the lack of findings by his Honour, particularly in relation to the parties’ non-financial and homemaker contributions. However, it is obviously preferable that we do endeavour to re-determine the matter rather then subject the parties to a new trial, particularly given the limited value of their property.
Ultimately in a case such as the present, where the non-superannuation assets comprise only one item of any substance being the equity in the home, it would seem to matter little whether the case is approached on the basis of one or of two pools, provided that if there are to be two pools, both are considered against the matters in s 79(4) which are relevant in the particular case.
We consider that the simplest and most intelligible approach in this case is to proceed on the basis of two pools, being the superannuation interests pool and the non-superannuation asset pool.
So far as the pool comprising the superannuation interests is concerned, it can simply be said that in the circumstances of this relatively short marriage, where both were working for much of the time, it is artificial at least on the available evidence and as was effectively submitted by senior counsel for the husband to regard either party as having made any indirect contribution of any real worth to the other’s superannuation interest. Both should be regarded as having made the sole contribution to his or her own superannuation interest. That does not, of course, mean that those interests should then be overlooked (as his Honour appears to have done) for purposes either of considering whether a s 75(2) adjustment is required, or assessing the justice and equity of the ultimate orders. The disparity in their respective superannuation interests is itself a matter for consideration under s 75(2).
However, given that neither party ultimately sought a splitting order in relation to the other’s superannuation interest, it is unnecessary to attempt to make any adjustment of either party’s superannuation interest on the basis of the matters in s 75(2). Rather any s 75(2) entitlement or adjustment in relation to either’s superannuation interest is more appropriately satisfied out of the non-superannuation assets.
As to the non-superannuation assets, it appeared common ground that the husband had made the greater financial contribution to such assets. However, given the status of the parties’ evidence concerning their non-financial contributions to their property and their homemaker contributions, particularly the lack of cross-examination of the wife in relation to her affidavit evidence in this regard (Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 419), such contributions on the part of the wife must be seen as greater than those of the husband. In our view, such contributions would counter balance the husband’s greater financial contributions (to the non-superannuation assets). While it may well be possible in the case of a relatively short marriage to demonstrate more effectively than in the case of a longer marriage, the superiority of the financial contributions of one party (as senior counsel for the husband endeavoured to do in this case), non-financial and homemaker contributions must also in relatively short marriages be given appropriate, and not just token weight (Mallet v Mallet (1984) 156 CLR 605).
We would therefore divide the parties’ non-superannuation assets, which have a net value of $120,722.00 (being the value of the house at $355,000.00 less the mortgage ($213,000.00) less the wife’s credit card debts ($21,278.00)), equally between them on the basis of their financial, non-financial and homemaker contributions.
On this basis, each party would have net non-superannuation assets to the value of $60,361.00. But the husband would also have his superannuation interest with a value of $158,791.00 and the wife her interest with a value of $37,701.00.
So far as the s 75(2) matters are concerned, these matters would obviously favour the wife on account of the findings by his Honour in relation to her health, her apparently more limited earning capacity and consequent more limited capacity to increase her superannuation entitlements, and also the husband’s greater existing superannuation entitlements. These matters would, in our view, warrant a further 20 per cent (of $120,722.00 = $24,144.00) in favour of the wife.
This would mean that the net non-superannuation assets of the parties would be divided 70 per cent/30 per cent in favour of the wife, with no division of their superannuation interests.
In monetary terms therefore, the net value of the non-superannuation assets of $120,722.00 would be shared as to $84,505.00 to the wife and $36,217.00 to the husband with each retaining his or her own superannuation interest. We consider this to be a just and equitable result in the circumstances of this marriage and having regard to the net value of the non-superannuation assets and the length of time before the parties receive their superannuation entitlements.
If the wife wishes to retain the home she will need to pay the husband 30 per cent of the net value of the non-superannuation assets (of $120,722.00), being $36,217.00. If she cannot raise this amount, the home will have to be sold and its net proceeds shared in the proportions of 70 per cent to the wife and 30 per cent to the husband.
Costs
Given the success of the appeal and having regard to the submissions made on behalf of the parties in relation to the costs of the appeal, we propose that there should be no order for costs in relation to the appeal and that the parties should receive certificates under the Federal Proceedings (Costs) Act 1981 (Cth) in respect of those costs.
In relation to the matter of costs we were informed at the conclusion of the hearing of the appeal against the property settlement orders, that the Federal Magistrate had made a costs order in favour of the husband and that the wife may wish to appeal that order. If so, the wife would need an extension of time to file the necessary notice of appeal to which there would, we were informed by senior counsel for the husband, be no objection. However, in order to avoid the necessity for a further hearing, directions would need to be made by us for the filing of the necessary notice of appeal, appeal book (the contents of which are to be settled by the Appeal Registrar in default of agreement between the parties) and written submissions. We propose to make such directions.
I certify that the preceding fifty five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 17 September 2010.
Associate:
Date: 17 September 2010
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