Bishop and Lovett
[2010] FamCA 761
•1 September 2010
FAMILY COURT OF AUSTRALIA
| BISHOP & LOVETT | [2010] FamCA 761 |
| FAMILY LAW – PROPERTY – Superannuation – Just and equitable – Interim orders made in February 2001 by consent – Where proceedings adjourned pursuant to s 79(5) of the Family Law Act 1975 (Cth) – Consideration of Gabel & Yardley (2008) FLC 93-386 and the distinction between “interim” and “partial” orders – Where part of the husband’s superannuation interest commuted – Splittable payment order |
| Family Law Act 1975 (Cth) ss 75(2), 79(4), 79(5) Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) s 5(1) Family Law (Superannuation) Regulations 2001 |
| C & C (2005) FLC 93-220 Gabel & Yardley [2007] FamCA 1322 Gabel & Yardley (2008) FLC 93-386 Steinbrenner & Steinbrenner [2008] FamCAFC 193 West & Green (1993) FLC 92-395 |
| APPLICANT: | Ms Bishop |
| RESPONDENT: | Mr Lovett |
| FILE NUMBER: | CAF | 513 | of | 1999 |
| DATE DELIVERED: | 1 September 2010 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Faulks DCJ |
| HEARING DATE: | 6 & 7 March 2008 Written submissions filed by both parties on 17 April 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr G. Howard & Mr S. Bourke |
| SOLICITOR FOR THE APPLICANT: | Farrar Gesini & Dunn |
| COUNSEL FOR THE RESPONDENT: | Ms A. Tonkin |
| SOLICITOR FOR THE RESPONDENT: | Mazengarb Barralet Family Lawyers |
Orders
That in accordance with section 90MT(1)(b) of the Family Law Act 1975 (Cth), whenever a splittable payment within the meaning of section 90ME of the Family Law Act 1975 (Cth) becomes payable to or on behalf of the husabnd (born … 1957, member number …) from his interest in the Defence Force Retirement and Death Benefits Scheme (the DFRDB), the wife (born … 1959) is entitled to be paid by the trustee of the DFRDB 25 per cent of the splittable payment and that there be a corresponding reduction in the amount the husband would be entitled to receive but for these orders.
The operative time for order 1 be 28 days after the service of these orders on the trustee of the DFRDB.
That the trustee of the DFRDB, in accordance with the obligations set out under the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001, do all such acts and things and sign all such documents as may be necessarily to calculate the entitlements of, and make payment to, the wife in accordance with these orders.
That these orders are binding upon the executors, administrators, beneficiaries heirs and assigns of the parties.
The wife indemnify and keep indemnified the husband in respect of any liability owed to Mr Ian Gillespie-Jones (solicitor) by the wife or by the wife and the husband.
(a) In relation to the husband’s mother’s ring, the chaise lounge, the Russian chess set and the Lladro figurines in the possession of the wife, the parties will choose by lot which of them will have first pick; and that party will choose one of the four chattels (or collection of chattels) referred to above; the other party will then choose another of the items; the first chooser another of the items until all the chattels are exhausted.
(b) The parties will confer and agree about how the husband will collect the items from the wife. If the parties choose to have the wife send them to the husband, he will pay for the cost of transport and associated costs such as insurance (if any).
Each party is declared to be the owner both at law and in equity of all other property in possession of such party at the date of these orders, including any superannuation interest other than as specified in these orders.
All extant applications, save as to the question of costs, are discharged.
The matter is removed from the pending cases inventory.
IT IS NOTED that publication of this judgment under the pseudonym Bishop & Lovett is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT CANBERRA |
FILE NUMBER: CAF 513 of 1999
| MS BISHOP |
Applicant
And
| MR LOVETT |
Respondent
REASONS FOR JUDGMENT
Introduction
To say this has been a long and vexed piece of litigation between the parties is something of an understatement. It is therefore necessary to review some of the history of the parties of the litigation to put into context the now comparatively narrow parameters of the dispute between the parties.
Background
The husband was born in June 1957; the wife in June 1959. These dates are relevant because the effect of the dispute between the parties is how, if at all, the parties’ superannuation entitlements should be divided. The husband is at the time of this judgment 53 years old and the wife 51 years old.
The parties were married in September 1981 and separated in October 1998. The parties were together for approximately 17 years. The parties were divorced on 10 October 2000.
There are three children of the marriage, M (who is now 26 years old), N (who is now 23 years old), and J (who turned 18 in May 2010).
After separation, proceedings began between the parties in the Family Court of Australia when an application was filed by the wife in February 1999.
These proceedings precipitated an order by consent on 1 March 1999 that, inter alia, required the husband to commute part of his Defence Force Retirement and Death Benefits Scheme (DFRDB) entitlement.
The husband had been in the Defence Force since 1975 or some 6 years before the parties married.
The husband has re-partnered and works through a company known as K Pty. Ltd. The wife has also re-partnered and is a public servant based in Canberra where it is asserted that she and her present husband have a joint income in excess of $120,000. The wife has a superannuation interest.
The husband also has income from his DFRDB pension to supplement the income he derives from his business.
It is a point of contention between the parties as to what the husband’s income from his business actually is.[1] The husband asserts that his income through his company was about $400 per week and that he received, in addition, $560 per week from his pension.
[1] Submissions of the husband, filed 29 April 2008.
In more recent submissions of 14 December 2009, the husband sought to adduce evidence of his present financial circumstances and the wife resisted this application. The grounds for opposition were that this would simply be to repair omissions or gaps in the evidence in the original proceedings before the Court. I accept that submission but comment that in the overall consideration of the issues for determination at present such information would be unlikely to affect the outcome.
The evidence in the original proceedings before the Court, (including the cross‑examination of the husband) did not provide satisfactory evidence about the nature of his income from his business. I am unable to make any satisfactory findings about the husband’s level of income. His answers in cross‑examination were precise but evasive.
As is common with Defence Force families, this family moved quite a lot during the time it was together. The parties purchased a property in Y, Australian Capital Territory (ACT) in 1986 initially as an investment, but later moved into that house in January 1987.
Two years later they moved to Melbourne and thence to regional Victoria, returning to Canberra in 1993. The parties had purchased (in the husband’s name) an investment property in E, ACT in September 1992.
In November 1993, an investment property was purchased (“P property”) which has been a significant focus for the litigation in this Court. P property was a development which involved a series of apartments. This investment was in the wife’s name and was substantially mortgaged.
The parties separated in October 1998. On separation, the husband assumed responsibility for the outgoings in respect of the two investment properties and also P property.
The husband left the Defence Force in October 1999. During 1999, the wife sold shares and retained the proceeds, totalling approximately $5,000.
The husband concedes that in June 1999 he ceased making any payments in respect of the P property investment. What has become a matter of contention between the parties is what happened thereafter in relation to P property.
In November 1999, the wife commenced litigation in the Supreme Court of the ACT by joining a class action in respect of P property. The husband asserts this was done without informing him or obtaining his consent. I shall return to some of the details of this, to the extent it is relevant to the dispute between the parties.
Subsequently, the wife sold further shares worth some $7,500. The husband sold the E property and applied the net proceeds towards the reduction of the mortgage on the P property investment. Shortly after that time, the husband sold the Y property and applied further proceeds of some $1,800 to reduce the mortgage on the P property.
In 1999, the husband then established K Pty. Ltd. In January 2000, the husband moved to Brisbane.
On 22 February 2001, orders were made (the precise nature of the orders is a matter of contention) about the property – the relevant orders appear as Annexure “1”. Orders about the children were also made. The orders about the children have not been the subject of contention.
As appears from Annexure “1”, one of the orders made had the effect of requiring the parties to arrange the transfer of the investment in the P property to both parties as tenants-in-common and required them to be jointly responsible for the “outgoings” on the P property.
The orders which were in part described as “interim” also provided that the wife receive $82,500 in cash from the commutation of the husband’s DFRDB lump sum entitlement; a further $27,472.14 was preserved. The husband received $5,526.07 in cash.
As appears from the orders made by consent, the proceedings were to be adjourned until the completion of the litigation in relation to the P property. Although each of the parties now sees these orders from a different angle, it is reasonably fair to infer that at that point there was some optimism that the litigation would be successful and there would be a net return on the P property investment through the Supreme Court.
Although not expressed in these terms in the orders, it would also be fair to say that the husband expected that he would get a share of the fruits of a (positive) judgment.
Sadly, the outcome of litigation is never certain and the worst fears of the parties were realised when the litigation failed. This resulted in a debt for costs. In June 2005 the wife consented to the class action being dismissed.
In the meantime, the husband stated that, finally in response to his urgings and sometime after he had “washed his hands” of the litigation, the P property investment of the parties was sold at a loss ($34,741.44). The parties shared (not quite equally) in that loss at the time of the sale, with the wife bearing $17,790.48 and the husband bearing $16,950.96.
The wife then, in effect, re-commenced proceedings in this Court by filing an “amended” application on 10 March 2006. A further minute of orders sought was filed by the wife on 1 February 2008, which appears at Annexure “2”. In essence, the wife sought a splitting order in relation to the husband’s remaining superannuation entitlements and an order requiring the husband to contribute to the costs incurred in respect of the failed litigation.
The matter proceeded to a hearing before me initially on 21 November 2006, and then subsequently on 6 and 7 March 2008.
The husband, who filed a response on 2 May 2006, sought simply that the wife’s application be dismissed and that, in effect, things remained as they were as a result of the orders of February 2001. The husband filed a minute of orders sought on 31 January 2008 (which appears at Annexure “3”).
Proceedings adjourned; Gabel & Yardley (2008) FLC 93-386
The matter was adjourned in part to await the outcome of other litigation (not involving the parties) before the Full Court of the Family Court. This was directed to the way in which the Court should deal with orders made and adjourned pursuant to s 79(5) of the Family Law Act 1975 (Cth) pending some significant financial event.
The submissions in this matter were directed in part to whether the original orders made in February 2001 were “interim” or “partial” orders, and whether that classification made any difference to the Court’s ability to make orders dividing superannuation between the parties in the enlivened proceedings.
After the adjournment, and certainly within the contemplation of the parties at the time when the original orders were made, the Family Law Act 1975 (Cth) was amended to provide that superannuation entitlements might be split.[2]
[2] As a consequence of the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth).
The operative provisions of the amending legislation are contained in s 5 of the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth). Section 5 relevantly provides:
5Application of superannuation amendments
(1)Subject to this section, the superannuation amendments apply to all marriages, including those that were dissolved before the startup time.[3]
(2)Subject to subsections (3) and (4), the superannuation amendments do not apply to a marriage if a section 79 order, or a section 87 agreement, is in force in relation to the marriage at the startup time.
(3)If a section 79 order that is in force at the startup time is later set aside under paragraph 79A(1)(a), (b), (c), (d) or (e) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the order is set aside.
(4)If an approval of a section 87 agreement that is in force at the startup time is later revoked on a ground specified in paragraph 87(8)(a), (c) or (d) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the approval is revoked.
(5)Part VIIIB of the Family Law Act does not apply in relation to a financial agreement that was made before the startup time.
[3] The startup time was 28 December 2002.
The decision of the Full Court of the Family Court in Gabel & Yardley[4] was delivered on 30 October 2008. The delay in delivery of the judgment subsequent to the delivery of Gabel & Yardley is entirely my responsibility and my fault. I unreservedly apologise to the parties for any emotional and financial difficulty my delay may have occasioned to them.
[4] Gabel & Yardley (2008) FLC 93-286.
Orders sought; Orders made by consent 22 February 2001
The issues between the parties can be relatively simply stated. Neither party seeks to disrupt or to interfere with the division of property effected by the orders made by consent on 22 February 2001.
The wife seeks that she should receive from the husband a payment, in effect, to represent his share of the expenses of the litigation in relation to the P property investment. The wife also seeks that the husband’s existing superannuation entitlements in the DFRDB scheme should be split to enable her to receive 50 per cent of his pension. This is in addition to the substantial proportion of commuted lump sum in relation to the same pension she received in February 2001.
For his part, the husband resists any suggestion that he should contribute to the P property investment expenses. The husband also seeks that the wife’s application in relation to his superannuation pension be dismissed.
It should be noted that while the question of a possible future division of the superannuation remained open in 2001, it does not appear to have been the catalytic factor in the orders made pursuant to s 79(5) of the Family Law Act 1975 (Cth).
Because the orders were made by consent, it is difficult to know exactly what the parties contemplated. To the extent that the orders reveal their state of mind, it appears that they were, at that stage, concentrating on the potential result of the litigation relating to the P property investment.
The wife’s submissions might be summarised as follows. The orders that were made in February 2001 were, within the terms of the superannuation amendments to the Family Law Act 1975 (Cth), “interim” orders. Accordingly, the Court has the power to make a splitting order and should do so. Moreover, the wife argues that the husband was by orders of the Court responsible for payment of the expenses in relation to the P property investment and responsibility should extend to the expenses of the litigation. Consent order 7 provided:
That pending determination of the matter, the parties shall each pay half of the outgoings on [the P property] after the application of rent received towards outgoings.
For his part, the husband states that the orders made in February 2001 were “partial” orders and that the only issue remaining to be resolved and in relation to which orders might be made is the P property litigation. There was no profit or property resulting from it and hence no order should be made. In the alternative, the husband argues that if the Court were minded to proceed on the basis that the original orders might be properly categorised as interim orders or that the power of the Court to make a determination under s 79 of the Family Law Act 1975 (Cth) had not yet been “spent”, the Court’s discretion should be exercised so as to make no further division of property or order about superannuation – except an order for costs in his favour. He also sought reimbursement for some of the expenses paid by him in relation to the P property investment.
The husband submits that he did not consent to the wife’s involvement to the litigation on behalf of them (or at least on his behalf). In fact, the husband opposed the wife’s involvement either on their joint behalf or on his behalf or even on her own behalf. The husband urged her to mitigate her loss by selling her investment at an earlier point than she did. Accordingly, the husband argues that he should not be required to make any payment toward the litigation costs.
Further, even if it is legally possible for the Court to make a splitting order, the husband submits that it should not do so as the wife had received the bulk of his superannuation entitlement as it was in February 2001 when the first orders were made. The husband also submits that his present pension entitlement is modest and ought to be left intact. He asserts the evidence is that the wife is in, what was described at trial, reasonably well-remunerated employment and she is married to a person who is also in secure employment.
A lot of heat and energy was devoted to what the wife did with the money that she received as a result of the orders of February 2001. The wife states that she spent it on: a car (which is now worth a lot less than when she bought it); in paying her legal fees; and on living expenses.
Although a significant number of words and time were devoted to these issues, they would appear to be irrelevant as neither party seeks to disrupt the original orders. Each of the parties, however, in fairness seeks to put a different complexion on the final balance sheet as between the parties. If there are to be further orders and the Court is finally to make its final orders about the division of property between the parties, it is appropriate for the Court to take account of how the property was distributed between the parties as a factor under s 75(2) of the Family Law Act 1975 (Cth) (possibly s 75(2)(o)). However, in any event, such a consideration is necessary to determine whether it would be just and equitable for any (further) order to be made.
On both sides, this is something of an exercise in futility. The division of the property at the time that the consent orders were made reflected the property as it was at that time. The value of that property, or whether it has subsequently been spent on living expenses (or anything else), or whether it might have returned something more if it had been invested prudently (as the husband suggests it should have been), is, within the terms of the dispute between the parties, largely irrelevant.
The valuation of the superannuation at that point is also substantially irrelevant as the Family Law (Superannuation) Regulations 2001 which provide for the proper valuation of superannuation were not in existence at that time. To apply these Regulations retrospectively to the parties and to the arrangements they reached by consent at that point would seem not only inappropriate, but, in large measure, irrelevant.
Moreover, the valuation of the husband’s superannuation at this point is not necessarily the most appropriate way of considering how the Court should deal with the parties’ present entitlements. Having commuted what he could at the time of the March 1999 orders, the husband is now receiving a pension. That pension is modest as mentioned above. That is not in any way to diminish the value to parties of modest means in having a secure income for their retirement.
Discussion
The expenses relating to the P property litigation
This claim on the part of the wife is misconstrued if it is sought as a property order. In essence, it is an order that the husband pay a debt. If it were the only property between the parties, this would be an inappropriate or possibly ultra vires exercise under s 79 of the Family Law Act 1975 (Cth). I might add that the same comment might be made about the husband’s claim for reimbursement of an obligation he consented to without there being any prescribed termination date or terminating event.
It is clearly permissible for the Court to make a distribution of the liabilities of the parties in circumstances where this amounts to a division of the net property of the parties. That situation might be said to apply to these parties. It is true that there were assets divided between the parties, if the wife’s submissions are to be accepted on an interim basis, in 2001. Accordingly, this might be categorised as a somewhat late re-organisation of that division of net property by ascribing a particular debt to the husband or causing the wife to reimburse the husband for a debt paid by him.
Nevertheless, in the circumstances as they exist where neither party seeks to disrupt the earlier orders, this application (or perhaps more accurately this particular order sought by the wife at least) is in the nature of enforcement of the earlier orders requiring the husband to contribute to the expenses in relation to the P property investment or if it is simply an order seeking that the husband pay a particular debt of the wife or of the wife and husband. While I have no specific evidence about it, it is likely that the money has been paid by the wife, so this is, in effect, a reimbursement of the money that she has paid.
While not precisely argued in this way, the husband asserts that this is a post‑separation debt of the wife. Irrespective of whether or not it might in some way be categorised as an expense relating to the P property investment, it is an expense that was incurred by the wife against the will of the husband, in fact contrary to his instruction when he was urging her to “cut their losses” as they may have then been and to get out of the litigation and out of the investment.
It is, therefore, understandable that the husband might feel aggrieved that he be asked to pay for expenses which he neither consented to, was willing to be involved in, and indeed, counselled the wife against. The husband might say that even if it might be said that the expenses was incurred in relation to what became after the February 2001 orders a joint investment, it bears all the characteristics of a post-separation debt incurred by the wife of her own volition.
I accept that submission in large measure. It is no criticism of the wife particularly that she accepted the advice of her lawyers at the relevant time in pursuing the P property litigation. Nevertheless, it has to be said that no litigation is entirely free from risk and while she was no doubt fixed on what she hoped would be the positive outcome of the litigation, it did not prove so to be. It is hard in those circumstances where there is no mutuality in the commitment to argue that the consequential loss ought to be borne equally between the two parties to these proceedings.
This, however, does not detract from the proposition that such a debt is a factor which might properly be taken into account as a relevant matter under s 75(2) of the Family Law Act 1975 (Cth) – if it should become appropriate to do so. The money the husband paid pursuant to the earlier orders is equally not a proper amount to be recovered in the circumstances of this matter particularly when it was an obligation freely entered into by him.
Whether the orders of February 2001 were “interim” orders; evidence of the parties
When the proceedings were first re-opened before me through the wife’s application in March 2006, there was some confusion in the legal authorities about the nature of adjournments under s 79(5) of the Family Law Act 1975 (Cth). In particular, this included how such adjourned proceedings might be interrelated with the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth).
The decision of the Full Court in Gabel & Yardley has (largely) put an end to that confusion. Without putting too fine a point on it, their Honours (Bryant CJ & Coleman J, and Finn J – who effectively arrived at the same conclusion) determined that there is one exercise of power in dividing property under s 79 of the Family Law Act 1975 (Cth), but until that power is spent, any orders that might be made must necessarily be “interim” orders, certainly, so far as any application of the superannuation proceedings is concerned. Bryant CJ and Coleman J relevantly stated:[5]
59. When any supposed distinction between “interim” and “partial” orders for settlement of property is removed, and it is accepted that the Court’s power may be exercised by a series of orders before the power is necessarily exhausted or “spent”, the nature of the orders made in the exercise of the power to make orders for settlement of property becomes clearer.
60. We conclude that the critical issue is whether or not the Court’s power to make orders for settlement of property has been exhausted or “spent” rather than the effect on property with respect to which orders are made in the partial exercise of the power. The fact that the beneficial ownership of a particular item of property may have been affected by “interim” or “partial” orders made pursuant to section 79 of the Act does not in our view preclude such orders from being “interim” for the purposes of the superannuation amendments.
[5] Gabel & Yardley (2008) FLC 93-386, 82-957 – 82,958 (Bryant CJ & Coleman J).
The distinction explored by me in the first instance proceedings in Gabel & Yardley[6] between “partial” and “interim” orders has, sensibly, with respect to their Honours in the Full Court, been set to one side. There can now, be no serious argument in this matter that the orders in February 2001 were “interim” orders. Until final orders resolving matters about the property of the parties have been made, the power under s 79 of the Family Law Act 1975 (Cth) is not spent and the Court has the power to make further orders.
[6] Gabel & Yardley [2007] FamCA 1322. This was the litigation pending before the Full Court referred to above.
In doing so, the Court must make orders which are just and equitable and, in arriving at that conclusion, must make determinations about the factors under s 75(2) of the Family Law Act 1975 (Cth). This process necessarily involves a consideration of the nature of the orders that have been made, the overall division of the property between the parties thereby effected and the financial circumstances of each of the parties at the time of the orders.
This is an exercise customarily undertaken by the compilation of a table of assets and liabilities, noting the division of those assets and liabilities as a result of the Court’s consideration of the contribution factors pursuant to s 79 of the Family Law Act 1975 (Cth) and the “s 75(2) factors” and then determining whether the nature of the orders and the way in which they are applied would constitute a just and equitable of property between the parties.
When superannuation entitlements are involved, as prescribed in Coghlan & Coghlan,[7] the Court may, in appropriate circumstances, include the superannuation value in the list of assets of the parties, or it may treat it separately.
[7] C & C (2005) FLC 93-220.
In this matter, the standard process described above would be highly artificial, given that the parties divided so much of their property so long ago. Moreover, neither party seeks to disrupt that original division of property.
It is also apposite to note that what the parties expected would be the result of the adjournment was there would be some asset or benefit to be divided from the proceeds of the P property investment litigation. That situation has not eventuated or, at least, not in the way the parties originally contemplated that it might.
The accessibility of the husband’s superannuation entitlements by way of a splitting order was not something then contemplated and given that it now falls within the scope of the litigation between the parties, it would seem to be appropriate to deal with it separately from the other assets of the parties.
Accordingly, one way of analysing the overall situation of the parties is that the assets of the parties so far as they are concerned have been satisfactorily divided other than in relation to the P property litigation and the superannuation.
The litigation, as I have indicated, did not produce a benefit or asset. The superannuation is capable of some evaluation in the history and circumstances of the parties separately from the other assets.
For the reasons I have articulated above, it seems to me that the costs of the litigation, presumably already paid by the wife, ought to remain with her. That cost is a debt which was incurred, to some limited extent, as a failed enterprise of both parties and it is properly a factor to be taken into account under s 75(2) of the Family Law Act 1975 (Cth). Equally the husband should not recover the money he paid in relation to the investment. That, does not mean that any division of the superannuation entitlements should simply be another way of making an order for payment of the costs of Mr Ian Gillespie-Jones as the wife seeks.
The superannuation entitlements are in a slightly different category. There was already a division of some superannuation entitlements at the time of the February 2001 orders. This was, however, a division significantly favouring the wife.
The wife argues that that sum has been dissipated since by her obligations for meeting her living expenses and those of the children. The husband argues that she dissipated the sum unreasonably and that he had made contributions for the children through his child support obligations. Those child support obligations and the payment of school fees and the like were the subject of cross‑examination. Each of the parties in cross‑examination was careful in his or her responses, gave nothing away and argued with virtually everything that was put to them.
This meant that at the end of the evidence very little satisfactory information was adduced about the precise nature or reasonableness of the wife’s application of the funds, or for that matter, the husband’s contributions to the children and the effect it had upon his lifestyle. I do not doubt that the sum the wife received was spent largely on living expenses for her and the children. But it might have been spent on anything for that matter without necessarily altering the fact that she had received as part of the agreement between the parties in the orders of the Court a substantial proportion of the husband’s superannuation.
Section 75(2) of the Family Law Act 1975 (Cth) and justice and equity
The question remaining, therefore, is would it be fair and reasonable, or just and equitable, if she were to receive a further sum in the nature of a share of his pension?
The wife contributed indirectly during the period of cohabitation and marriage of approximately 17 years to the acquisition of the husband’s superannuation. The husband, for his part, contributed to his superannuation for about 7 years prior to the commencement of the relationship, and for 2 years after separation. On that basis, without applying a West & Green[8] approach to the division of property between the parties, but considering the overall contribution of the parties to this asset and the nature of it as superannuation, for the wife to receive as she seeks 50 per cent of his pension on a contribution basis alone would not, in my opinion, be just and equitable.
[8] West & Green (1993) FLC 92-395.
Irrespective of the present day value of what she did receive in February 2001 if it had been preserved as a lump sum or invested in some way, and irrespective of the valuation of the present superannuation entitlements in applying the Family Law (Superannuation) Regulations 2001, it cannot be just or equitable that the wife should receive 50 per cent of what is after all a relatively modest pension.
By the same token, there is no doubt, for the reasons I have outlined above, that it is appropriate that there should be some entitlement on her part to a share of a valuable asset, particularly as the parties get nearer to the age of retirement. The husband asserts that his income from his business is modest as well. He may be right, however, he did not demonstrate this effectively in his evidence. It is reasonable to conclude as was urged by me by counsel for the wife that some of the payments that were made by the husband could not have been made if his income was as modest as he suggested.
In short, in my opinion, it is reasonable that as the ability to effectively demonstrate his income lay exclusively with the husband, if I am not satisfied that his income is as modest as he asserted, it is because of the husband’s failure to adequately discharge his evidentiary onus. I could not be satisfied about the level of his income.
Consequently, I cannot determine the extent of which it would be reasonable or fair to take that in any definitive way into account in determining what share if any the wife should have with his superannuation pension.
Taking account of the present circumstances of each of the parties so far as they are in evidence before me, it seems that each of the parties has successfully re‑partnered. There is a measure of financial security for each by reason of the financial circumstances of their respective partners and own present arrangements about superannuation, details of which I have only in the most general of terms.[9] Surprisingly little evidence was directed to this matter in the course of the proceedings before me. I note there is little disagreement about the overall beneficial effect of their respective new arrangements and relationships.
[9] An invitation to the parties to adduce further evidence did not elicit this information.
The wife has the debt she sought to impose upon the husband and the wife no longer has, relevantly under the Family Law Act 1975 (Cth), the responsibility of the parenting of the youngest child of the parties.
I should perhaps digress to say that the wife would be entitled to claim as a contribution from the time of the orders in February 2001 until the present time her parenting in respect of the youngest child.
Of course, pursuant to s 79(4)(g) of the Family Law Act 1975 (Cth), the husband is entitled to claim that his own contributions which to some extent offset the physical contributions of the wife. As I have suggested above, the extent to which this has occurred and where any shortfall might properly be allocated is not clear on the evidence before me.
In my opinion, there should be a modest adjustment to the orders that I make as final orders incorporating the earlier orders which were, in effect, made by consent and re-affirmed by consent for the financial circumstances of the wife in having the debt relating to what was a joint investment.
That leaves to a conclusion as an exercise of my discretion that, there should be a splitting order giving the wife a quarter of the husband’s pension income.
This determination comes about as a result of the following factors, although I do not attach any particular significance to any one of these factors.
First, the division of property on an interim basis between the parties meant that effectively the wife received $82,500 of the available liquid assets of the parties. The husband received approximately $33,000 (including the rolled over part of his preserved entitlement).
Second, the wife expended the sum that she had received. What the husband did with his share is not clear from the evidence before me.
Third, the wife continued to make a contribution as a parent for some years after separation. The husband continued to pay child support.
Fourth, the ability to divide the husband’s superannuation in the pension phase was not available to the parties when the original orders were made by consent in February 2001. As a result of my determination about the nature of the orders previously made, this is now possible in the present proceedings.
Fifth, the husband made greater contributions both directly and indirectly to the superannuation than the wife.
Taking all of those factors into account, it seems appropriate that this asset, while modest in one sense, should still be shared between the parties as a matter of justice and equity. This decision is the “intuitive synthesis”[10] of the need to acknowledge the respective contributions of the parties directly and indirectly to the superannuation itself and their respective contributions to the parenting and financial support of their children and to the limited extent I am able to do so on the somewhat unsatisfactory evidence before me, the present financial circumstances of the parties including on the wife’s part the debt she has for the P property investment.
[10] See Coleman J’s comments in Steinbrenner & Steinbrenner [2008] FamCAFC 193, [234].
Miscellaneous items of property
I have not dealt with the other dispute between the parties relating to four miscellaneous items which are said to be in the possession of the wife. These are clearly identified by each of the parties and well known to them. They might be summarised as: the husband’s mother’s ring; a Russian Chess set; an antique Chaise Lounge; and four Lladro figurines.
Each of the parties claims in his or her submissions that each item is of sentimental value to him or her and there are some disputes about whether they were gifts from one party to the other (principally the husband to the wife) or whether they were joint assets or perhaps some form of investment. There is nothing between the parties on the evidence and in their submissions which would lead me ineluctably to the conclusion that they should remain either with the wife or be handed back to the husband. In the circumstances, it seems to me that equality is equity and the parties should divide these items between themselves equally, at least by category if not by value.
The way in which I propose that the parties should resolve their differences on this matter is that they should choose by lot which of them shall have first pick of the four categories of items. The person so chosen shall have first choice of each of one of the four items. The other person will have next choice. The first named person will have third choice. The second named person will have the last choice. The husband will then be responsible for the collection of the items that he has so chosen from the wife, or alternatively will pay for their transport if the wife should arrange their delivery to him.
Otherwise each of the parties shall retain what he or she has either as a result of the earlier division or as has been subsequently acquired.
Conclusion
I make orders in accordance with my judgment. The matter is removed from the pending cases inventory.
Costs
I have not any specific submissions about costs. In particular, I am necessarily unaware of any offers of settlement which may have passed between the parties. However, absent any relevant offer, it seems to me that it is unlikely that any other factors pursuant to s 117(2A) of the Family Law Act 1975 (Cth) would persuade me to make a costs order in favour of one party or the other.
I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 1 September 2010.
Senior Legal Associate:
Date: 1 September 2010
Annexure “1”
Relevant property orders made by consent on 22 February 2001
(NB: Reproduced without correction)
[Relating to children issues]
[Relating to children issues]
That the parties do all acts and things and sign all necessary documents to:
a)Cause the lump sum component of the husband’s superannuation with Defence Force Retirement and Death Retirement and Deaths Benefits Scheme commuted by the husband pursuant to orders made by the Family Court on 1 March 1999 to be paid:
i)as to $82,500 net of tax to the wife;
ii)the balance to the husband or as he may direct.
b)Cause the amount of the husband’s superannuation required to be preserved to be paid to the rollover fund of the husband’s choice.
c)To pay the husband’s pension entitlements to the husband.
That each of the husband and wife be solely entitled to all items of personal property in his or her possession at the date of these orders.
That Orders 3 and 4 are interim orders for property settlement and the proceedings for property settlement be otherwise adjourned until the conclusion of the litigation in relation to the property known as [P property] in the A.C.T being all the land described in Crown Lease Volume […] Folio […].
That pending the final hearing of the matter, the parties hold the property at [P] as tenants in common in equal shares and the wife shall sign such documents as are tendered to her by the husband to give effect to this order.
That pending determination of the matter, the parties shall each pay half of the outgoings on [the P property] after the application of rent received towards outgoings.
That the orders made by consent on 1st March 1999 be discharged.
Annexure “2”
Minute of orders sought by the applicant wife (filed 1 February 2008)
(NB: Reproduced with only one correction)
That in accordance with Section 90MT(1)(b) of the Family Law Act 1975 (“the Act”), whenever a splittable payment within the meaning of section 90ME becomes payable to or on behalf of [Mr Lovett], (date of birth: […] 1957) (member umber: […]) (“the Husband”) from his interest in the Defence Force Retirement and Death Benefits Scheme (“the Fund”), [Ms Bishop] (“the Wife”) be entitled to be paid by the trustee of the Fund (“the Trustee”) 50% of each splittable payment and that there be a corresponding reduction in the amount the Husband would be entitled to receive but for these Orders.
That the operative time for Order 1 be 7 business days after the service of these Orders on the Trustee.
That the Trustee, in accordance with the obligations set out under the Act and Family Law (Superannuation) Regulations 2001, do all such acts and things and sign all such documents as may be necessary to calculate the entitlements of, and make payment to, the Wife in accordance with these Orders.
That these Orders are binding upon the executors, administrators, beneficiaries, heirs and assigns of the parties.
That within 30 days the Husband pay the following:
d)$21,000 to Iain Gillespie-Jones solicitor; and
e)$1,340.45 to the Wife.
and [thereafter] indemnify the Wife in relation to any amounts owing to Iain Gillespie-Jones.
That unless otherwise specified in these Orders:
a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party at the date of these Orders.
b)Each party forego any claims he or she may have to any superannuation benefits belonging to or earned by the other.
c)Insurance policies remain the sole property of the owner named therein.
d)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.
Annexure “3”
Minute of orders sought by Mr Lovett – Respondent Husband
(NB: Reproduced without correction)
That the Terms of Settlement number 3,4,5,6,7 of the Orders made in the Family Court of Australia on 22 February 2001 be discharged.
That the husband be entitled to the exclusion of the wife to all of his superannuation entitlements and benefits with Commonwealth life Personal Superannuation Fund, Unisuper and the DFRDB.
That within 30 days of the date of these Orders, the Wife pay to the Husband the amount of $25,174.36.
That within 30 days of the date of these Orders, the Wife pay to Ian Gillespie ones, solicitor, all outstanding amounts and indemnify the Husband in relation to any other amounts owing in respect of litigation commenced by her over the [P] investment unit.
That the wife return to the husband, at her expense, with only fair wear and tear, the following items currently in her possession:
a)The Husband’s mother’s ring, together with a current valuation prepared by a qualified gemmologist with such valuation to be at the wife’s expense.
b)The Russian Chess Set
c)The Antique Chaise Lounge
d)The four Lladro Figurines
That unless otherwise specified in these Orders:
a)Each party be solely entitled to the exclusion of the other to all other property in the possession of such party at the date of these Orders.
b)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.
0
2
3