BLANEY & BLANEY
[2011] FMCAfam 15
•20 January 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BLANEY & BLANEY | [2011] FMCAfam 15 |
| FAMILY LAW – Property – valuation of assets and contributions. |
| Family Law Act 1975, ss.75(2), 79 Family Law (Superannuation) Regulations 2001 State Superannuation Act 1988 |
| Brandt & Brandt (1997) FLC ¶92-758; 22 Fam LR 97 C & C [2005] FamCA 429; 193 FLR 9; [2005] FLC 93-220; (2004) 33 Fam LR 414 Farmer & Bramley (2000) FLC ¶93-060; [2000] FamCA 1615; 27 Fam LR 316 Figgins & Figgins (2002) FLC ¶93-122; [2002] FamCA 688; 173 FLR 273; 29 Fam LR 544 G & G (1984) FLC ¶91-582; 9 Fam LR 969 Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143; [2003] FamCA 395; (2003) 30 Fam LR 355 Norbis & Norbis (1986) FLC ¶91-712; [1986] HCA 17; (1986) 161 CLR 513; 65 ALR 12; (1986) 10 Fam LR 819; 60 ALJR 335 Russell & Russell (1999) FLC ¶92-877; [1999] FamCA 1875; 154 FLR 171; 25 Fam LR 629 |
| Applicant: | MS BLANEY |
| Respondent: | MR BLANEY |
| File Number: | MLC 4304 of 2010 |
| Judgment of: | Riethmuller FM |
| Hearing date: | 19 November 2010 |
| Date of Last Submission: | 19 November 2010 |
| Delivered at: | Melbourne |
| Delivered on: | 20 January 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Combes |
| Solicitors for the Applicant: | Clarke & Barwood Lawyers |
| Counsel for the Respondent: | The Respondent appearing in person |
ORDERS
The Husband transfer to the Wife all his right, title and interest in the real property situate at and known as Property M, in the State of Victoria and being the whole of the land more particularly described in Certificate of Title Volume [omitted] (‘the Property M’).
The Husband at his own cost do all such acts and things and sign all such documents as may be required to remove the Caveat forthwith being Caveat No [omitted] over the Property M.
Pending transfer of the Property M property:-
(a)The Wife have the sole right to reside in the Property M and be responsible for making all mortgage payments on it and to pay all apportionable rates, taxes and outgoings of or with respect of the Property M of whatsoever nature and kind;
(b)The parties hold their respective interests upon trust pursuant to these Orders;
(c)Neither party encumber the real property without the consent in writing of the other party.
In the event the Husband refuses or neglects within 14 days to comply with the provisions of paragraph 2 of these Orders:
(a)The Registrar of the Family Court of Australia at Melbourne is hereby appointed to execute all deeds and documents in the name of the Husband and do all acts and things necessary to give validity and operation to the said order; and
(b)The Husband in default is ordered to pay any and all foreseeable damages to the Wife caused by his default; and
(c)The Husband in default is ordered to pay all reasonable solicitor/client costs incurred by the Wife for the purpose of enforcing this Order and providing his damages.
The Wife indemnify the Husband against all payments and liability pursuant to the mortgages over the Property M being the mortgages to the Commonwealth Bank of Australian Nos. [omitted].
The Wife be solely responsible for all amounts due and payable in respect of the Commonwealth Bank of Australia Master Card (‘the CBA credit card’) in the name of the Wife and shall indemnify the Husband in respect of all liability arising under the CBA credit card.
Money standing to the credit of the parties in any joint bank account are to become the property of the Wife.
Unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent Orders each party be solely entitled to the exclusion of the other to all other property and chattels of every nature and kind (including choses-in-action) in the possession of each of the parties as at the date of the making of these Orders. All the furniture, personal possessions and like chattels in the Property M are considered to be in the possession of the Wife.
Pursuant to section 90MT(1)(a) of the Family Law Act 1975 (‘the Act’) whenever a splittable payment becomes payable in respect of the superannuation interest of the Wife interest in the [E] Superannuation Scheme (‘the Scheme’):
(a)The Husband shall be entitled to be paid an amount which is calculated in accordance with part 6 of the Family Law (Superannuation) Regulations 2001 (‘the Regulations’) using the base amount of $28,695 (provided that such base amount shall not exceed the value of the interest determined under section 90MT(2));
(b)There be a corresponding reduction in the superannuation interest of the Wife to whom the splittable payment would have been made but for the Order.
The operative time for these Orders is four (4) business days after the date of service for the final sealed orders on the [E] Superannuation Board.
There be liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
If as a result of termination of her employment the Wife becomes entitled to a benefit prior to the [E] Superannuation Board making a payment under section 59AC of the State Superannuation Act 1988, she shall provide to the [E] Superannuation Board all such forms as shall be necessary to enable the Trustee to determine the nature and quantum of the superannuation entitlement and any other related information it may reasonably require, within 7 days of that entitlement arising.
IT IS NOTED that publication of this judgment under the pseudonym Blaney & Blaney is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 4304 of 2010
| MS BLANEY |
Applicant
And
| MR BLANEY |
Respondent
REASONS FOR JUDGMENT
The applicant applies for orders pursuant to s.79 of the Family Law Act1975 dividing the property of the parties. The applicant was born in 1964 and the respondent in 1968. In 1988, the applicant purchased property in country Victoria (the Property M property). In 1990, the parties commenced a relationship and began cohabiting. Their first child, A, was born in 1992. In 1994, they married and later had their second child, G. Their third child, M, was born in 1996. Unfortunately, in March 2009, their marriage broke down irretrievably following which an intervention order was obtained. This intervention order was extended in October 1999 for a further six months.
The children presently live with the wife, A being 18 years of age,
G, 16, and, M, 14.
Section 79 of the Family Law Act 1975 (‘the Act’) enables the Court to make appropriate orders altering the interests of parties in their property. Section 79 of the Act sets out a number of significant matters that must be considered in order to determine what orders would be appropriate.
In Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143 the Full Court of the Family Court conveniently summarised the preferred approach as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
The approach taken in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143 must now be read subject to the decision in C & C [2005] FamCA 429 (with respect to superannuation), where Bryant CJ, Finn and Coleman JJ said:
43. Thus, the way in which s 90ms is drafted leads us to the view that superannuation interests are another species of asset which is different from property as defined in s 4(1), and in relation to which orders also can be made in proceedings under s 79.
44. However s 90ms(1) does have the effect, in our view of requiring that in a case where the Court intends to make orders in relation to superannuation interests of the spouses, it must do so “under” s 79 (although s 90ms(2) makes it clear that the Court cannot make an order in relation to a superannuation interest except in accordance with Part VIIIb). In other words, the Court must apply to superannuation interests the matters to be taken into account under s 79.
…
63. …we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise). This of course is the approach which the trial Judge adopted in this case.
In undertaking the first step the various items of property should be identified with reasonable precision and value. However in the subsequent steps it is not possible to make an adjustment for each relevant factor with mathematical precision. This is clearly stated by Nygh J in G & G (1984) FLC ¶91-582 (at page 79,697), where his Honour said that:
It cannot be required of the Family Court that it assesses contributions with mathematical precision with respect to each item.
This observation was approved by Mason J (as his Honour then was) and Deane J in Norbis & Norbis (1986) FLC ¶91-712. This observation has regularly been repeated by the authorities: see for example Brandt & Brandt (1997) FLC ¶92-758 and Farmer & Bramley (2000) FLC ¶93-060. Of course, ‘Judges [and Federal Magistrates] are obliged to exercise their discretion judicially and should explain the broad nature of their reasoning that leads to their conclusion’: see Figgins & Figgins (2002) FLC ¶93-122.
With respect to the final step it is important to note that it is the justice and equity of the actual orders that the Court must consider: see Russell & Russell (1999) FLC ¶92-877.
Neither party sought to cross-examine the other, seeking to have the matter decided on the papers and submissions.
The property pool
The parties are agreed that the pool of assets in this case is as set out in exhibit 1, which is as follows:
| Asset | |
| Property M | $235,000.00 |
| Wife’s motor vehicle | $4,000.00 |
| Wife’s furniture | $2,000.00 |
| Husband’s Holden Ute (disposed of as scrap metal) | $238.00 |
| Husband’s tools | $2,000.00 |
| Wife’s superannuation | $58,065.00 |
| Husband’s superannuation | $675.00 |
| Total | $301,978.00 |
| Liabilities | |
| Mortgage on Property M | $144,136.00 |
| Wife’s credit card | $3,531.00 |
| Rates | $5,335.70 |
| Power bill | $1,500.00 |
| Telephone bill | $300.00 |
| Unpaid school fees | $3,600.00 |
| Total liabilities | $158,402.70 |
| Total Assets after deduction of liabilities | $143,575.30 |
| Total Non-superannuation | $84,835.30 |
| Total Superannuation | $58,740.00 |
Contributions of the parties
Section 79(4) of the Family Law Act requires consideration of the contributions of the parties. The relevant parts of section 79(4) are as follows:
79 [Alteration of property interests]
…
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
…
It is relevant, when considering the various contributions, to also consider the times when these contributions were made: see Pierce & Pierce (1999) FLC ¶92-844; [1998] FamCA 74; (1998) 24 Fam LR 377, where the court was considering the weight to be given to various contributions, having regard to the time of those contributions, and the importance of them.
In this case the differences in contributions to superannuation and other assets are insignificant, and therefore I have noted the proportion of property that is superannuation but dealt with property and superannuation globally, until considering how to effect the property division.
At the commencement of the cohabitation the wife owned property in country Victoria, the Property M property, which was purchased with a $35,000 mortgage: see paragraph 7 of the wife’s affidavit filed on
15 November 2010.
In 1990, $30,000 was spent on renovations to the home and the lifestyle of the parties pursuant to a drawdown on the home’s mortgage. A further $25,000 was drawn down in 1993 and a further $15,000 in 1999. In 2003 and 2006, $20,000 drawdowns were made and in 2009, a $20,300 drawdown was taken. The result is that the parties now have equity in the home, as a result of the increase in mortgage and increase in value of the home, of approximately $91,000.
During the course of the relationship, the wife worked and the husband was in sporadic employment. In her affidavit, the wife states she worked full time as a [omitted] and that almost the entirety of her income was used pay to both the children’s expenses and the expenses for the Property M property. This included mortgage repayments, the rates and the household expenses. The husband was a self employed [omitted] throughout the marriage. The wife asserts that the husband earned a limited income, to the extent that he was not required to lodge a tax return. Her affidavit alleges that the husband’s abuse of alcohol and drugs impacted on his work. While the husband disputes having a problem with drug abuse, stating the only drug he has had a problem with is alcohol, he admits to having used cannabis and illicit drugs occasionally. The wife also alleges that the husband’s earnings were predominantly used to fund his own needs rather than to contribute to the household.
The children were cared for in day care for a significant part of the time. The wife argues for an 90% assessment of her contributions based upon her initial contribution of the house and the conduct of the parties during the course of the marriage. In her affidavit she states that she attended to the housework, cooking, washing and ironing. During the course of the marriage she was the children’s primary carer. She alleges that the husband played a limited role in the children’s upbringing, rarely attending school activities and contributed little to household chores. The husband points out that the wife worked full time night duty and that, at least during the evenings, he cared for the children and that the wife still does work in those hours.
In reality the parties have supported their standard of living by using up capital from the home. I accept that the husband has cared for the children when the wife works in the evenings. Otherwise, the version of the wife appears more likely in the factual matrix of this case.
Having regard to the size of the pool, the initial contributions, the financial contributions during the relationship and the involvement of the parties in the relationship and care for their children during the marriage, I assess the contributions at 60/40 in favour of the wife.
Section 79(4)(d) to (g)
I now turn to the third step in the process of apportioning the assets available for distribution between the parties and consider the matters set out in s.74(d) to (g).
The effect of any proposed order upon the earning capacity of either party to the marriage: s.79(4)(d)
The orders that I propose making in this matter will not affect the earning capacity of either party.
The matters referred to in sub-section 75(2) so far as they are relevant: s.79(4)(e)
a) The age and state of health of each of the parties
The husband is 42 and the wife is 46 years of age. Both parties are in good health.
b) The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The husband has applied to attend university next year as he wants to become a [omitted]. This will involve four years of study. Thereafter, he is likely to earn a similar amount, if not slightly more than the wife. At present, he is qualified as a [omitted] but has not been engaging in that area of work. He is currently unemployed.
The wife is capable of employment, and continues to be employed on a full time basis by [omitted].
c) Whether either party has the care or control of a child of the marriage who has not obtained the age of 18 years
There are two children under 18 years of age who are in the wife’s care.
d) Commitments of each of the parties that are necessary to enable the parties to support himself or herself or a child or another person that the party has a duty to maintain.
Neither of the parties has commitments other than those necessary to support himself or herself and their children.
e) The responsibilities of either party to support any other person;
Neither party has a responsibility to support anyone other than each other (to the extent such maintenance may be required) and their children.
f) The eligibility of either party for a pension, allowance or benefit.
At present, the husband is in receipt of Newstart allowance and will be attending university. The wife’s current employment means she is unlikely to be eligible for a pension or benefit.
g) Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
The husband’s standard of living will be commensurate with that of a person on a Newstart pension or student benefit. The husband is currently living in his brother’s home. To the extent that he receives a proportion of the asset pool, it will improve his standard of living.
The wife’s standard of living is impacted upon not only by the care of the three children, but also the level of debt she has accrued. In her affidavit, she states that all her wages are used to meet the property’s expenses including mortgage repayments, the rates and the household bills. She is approximately $5,335.70 in council rates arrears. The wife also owes approximately $1,500 on the power bill, of which she is on a payment scheme. The wife stands to be significantly affected by the impact of the property proceedings if it results in her losing the home.
h) The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no claim for spousal maintenance, nor is it likely that it could increase the earning capacity of the wife who already has full time employment. The husband does not seek spousal maintenance and would not be able to obtain it given his earning capacity as a [omitted] and the wife’s financial circumstances.
k) The duration of the marriage and the extent to which it has affected the earning capacity of the parties;
In this case the marriage has been quite long in duration, lasting for 15 years. The wife has had some periods on maternity leave, and had worked part time for a period of six months, however the likely impact upon the wife’s earning capacity has been limited. The wife was employed throughout the marriage on a full time basis so the marriage has not otherwise impacted upon her earning capacity. There is nothing due to the marriage that appears to have impacted on the husband’s earning capacity.
l) The need to protect a party who wishes to continue that party’s role as a parent;
In this case, the wife has two dependents under 18 and a child who is now attending university and partially self supporting, earning $100 per week. The wife will have the ongoing care of the two younger children although the husband says that G would like to live with him. On the material before me it appears that both children will continue living with the wife. Therefore, the children’s care will have a significant impact upon the wife.
Whilst the wife has worked full time when she was the children’s primary carer during the course of the marriage, the added pressures of single parenthood should be taken into consideration.
m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
Neither party is cohabitating with another person.
n) Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage;
The wife alleges that the husband is in child support arrears. In her affidavit the wife asserts that on 11 November 2010 the Child Support Agency (‘CSA’) advised her that the husband has been assessed to pay child support at the rate of approximately $41.40 per fortnight. The CSA further advised that the husband’s debt currently consists of approximately $1,613.38 in child support arrears.
Tangible evidence of the assessable child support is provided by the husband as an annexure to his affidavit. It is a receipt for $654.44 and a child support account statement issued on 21 May 2010.
o) Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
There is no other fact or circumstance in this case that is significant.
Any other order made under this Act affecting a party to the marriage or a child of the marriage: s.79(4)(f)
There are other orders made under the Family Law Act 1975 which affected the parties and the children that need to be taken into consideration. On 20 April 2009 the wife obtained an intervention order against the husband. The wife’s affidavit states that she had concerns for the safety of children and of herself due to the husband’s erratic behaviour. The husband disputes such behaviour. However, the wife was able to obtain an extension of the intervention order for a further six months on 19 October 2009.
Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage: s.79(4)(g)
These matters have been considered in relation to s.75(2)(n) above.
The result of s.79(4)(d) to (2) factors is that an adjustment is required in favour of the wife due to her role as the children’s principle carer, with minimal child support from the husband, and little prospect of any significant financial support for several years. I find that an adjustment in favour of the wife in the order of 20% is called for in this case.
Is the result just and equitable?
The home is in need of further renovations of around $60,000. This is due to the incomplete renovations of the family home. It is clear that the wife will have the financial burden of the children through to their majority. The wife is concerned that as a result of the levels of debt she will be unable to continue to retain the home if she is required to make an adjustment in the husband’s favour other than through superannuation. In reading this view I have had careful regard to the difficulty of leaving the husband without liquid assets. However, the sale of the home would cause real hardship to the wife and the children. If the husband were suffering equivalent levels of hardship it is likely that he could obtain a hardship payment from his superannuation.
Taking these matters into account, I have come to the conclusion that the orders sought by the wife, which effectively provide for her to retain the real property, the husband receive half of the superannuation and the parties to return their respective chattels, is a just and equitable adjustment in a case involving such a small pool, children to maintain and minimal child support.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Riethmuller FM
Date: 11 January 2011
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