BOYLE & BOYLE
[2014] FCCA 2576
•21 November 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BOYLE & BOYLE | [2014] FCCA 2576 |
| Catchwords: FAMILY LAW – Property settlement – marital relationship – capital gains tax – possible inheritances – claim under the Fair Entitlements Guarantee Act 2012 – possible lump sum under WorkCover – chattels. |
| Legislation: Fair Entitlements Guarantee Act 2012 Family Law Act 1975, ss.72(1), 75(2), 79, 79(1), 79(2), 79(4), 79(4)(d), 79(4)(e), 79(4)(f), 79(4)(g), 90MT(1)(a), 90MZA, 106A Family Law (Superannuation) Regulations 2001, regs. 12, 13, pt.6 |
| Cases cited: Aleksovski v Aleksovski (1996) 135 FLR 131; (1996) 20 Fam LR 894; (1996) FLC 92-705 Bevan & Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116 Burke v Burke (1992) 112 FLR 250; (1992) 16 Fam LR 324; (1993) FLC 92-356 Rosati v Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38 Stanford v Stanford (2012) 247 CLR 108; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; (2012) 293 ALR 70; [2012] HCA 52 White and Tulloch v White (1995) 127 FLR 105; (1995) 19 Fam LR 696; (1995) FLC 92-640 |
| Applicant: | MR BOYLE |
| Respondent: | MS BOYLE |
| File Number: | MLC 4059 of 2012 |
| Judgment of: | Judge Riley |
| Hearing dates: | 2, 3 and 16 October 2014 |
| Date of last submission: | 12 November 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 21 November 2014 |
REPRESENTATION
| Counsel for the applicant: | Mr McLeod |
| Solicitors for the applicant: | Danielle Webb Lawyer |
| Counsel for the respondent: | Mr James |
| Solicitors for the respondent: | Ross Legal |
ORDERS BY CONSENT
The wife do all necessary acts and things and sign all necessary documents to transfer to the husband at the expense of the husband all of her right, title and interest in the property at Property D more particularly described in certificate of title volume (omitted) folio (omitted) (“the Property D property”).
The husband return to the wife within seven days:
(a)the Lego table;
(b)all children’s toys not in the children’s possession;
(c)all of X’s personal belongings;
(d)the (omitted) bedsheets and doona covers;
(e)the wife’s book collection;
(f)the wife’s craft items including dollhouse; and
(g)X’s cross pendant necklace (which the husband will give to X himself).
The husband do all necessary acts and things and sign all necessary documents to transfer to the wife at the expense of the wife all of his right, title and interest in Property A (“the Property A property”) more particularly described in certificate of title volume (omitted) folio (omitted) and the wife ensure that all mortgages over the Property A property including but not limited to the (omitted) Bank bank mortgages numbered (omitted) and (omitted) (“the Property A loans”) be discharged or refinanced in the wife’s sole name.
In the event the wife fails to refinance the Property A loans into her sole name within 60 days of the date of these orders, the Property A property be forthwith sold altogether out of court (“the sale”) and the proceeds be distributed as follows:
(a)firstly, to pay the costs and commissions of the sale;
(b)secondly, to discharge all mortgages attached to the Property A property;
(c)thirdly, to pay all taxes, rates and outgoings attached to the Property A property; and
(d)fourthly, the balance then remaining to be paid to the wife.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent 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 as at the date of these orders (the furniture, personal possessions and like chattels in the Property A property being deemed to be in the possession of the wife and chattels in the Property D property being deemed to be in the possession of the husband);
(b)monies standing to the credit of the parties in any bank account are to become the property of the owner named thereon;
(c)insurance policies remain in the sole property of the beneficiary named therein;
(d)each party be solely liable for an indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
In the event that the husband or wife refuses or neglects to execute a deed and/or instrument in compliance with the provisions of these orders, a Registrar or Deputy Registrar of the Family Court of Australia at Melbourne is hereby appointed pursuant to s.106A of the Family Law Act 1975 to execute all deeds and/or instruments in the name of the husband or wife and do all acts and things to give validity and operation to the deeds and/or instruments.
The wife hold her (omitted) doll and (omitted) crystal collections on trust for the child, X.
ORDERS BY THE COURT
Within 14 days:
(a)the wife give the husband the original photographs related to his family and his childhood photographs;
(b)the wife obtain copies of the children’s photographs and the children’s school photographs and give half of the originals and half of the copies to the husband;
(c)the husband pay the wife half of the cost of obtaining copies of the children’s photographs and the children’s school photographs;
(d)the wife give the husband any of his original personal paperwork, such as schooling records, diplomas and framed certificates, remaining at the Property A property.
Within 28 days, the wife sell the (omitted) figurine for the best price reasonably obtainable and divide the proceeds of sale between herself and the husband in the proportions of 57.5% and 42.5% respectively.
Within 60 days, the husband pay the wife $28,575.91.
In accordance with s.90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to or on behalf of the husband, Mr Boyle, from his interest in the (omitted) Superannuation Fund, the wife, Ms Boyle, is entitled to be paid the amount calculated in accordance with pt.6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $103,396 and there be a corresponding reduction in the entitlement the husband would have had but for these orders.
The operative time for these orders is four business days after the service of final sealed orders on the trustee of the (omitted) Superannuation Fund.
Until the happening of:
(a)the establishment of a separate account in the name of the wife, Ms Boyle, in the (omitted) Superannuation Fund; or
(b)the transfer or rolling over into another superannuation fund of the payment split created by order 11 hereof; or
(c)the wife satisfies the conditions of release and is paid the payment split which was created by order 11 hereof; or
(d)the wife executing a waiver of rights within the meaning of s.90MZA of the Family Law Act 1975 in relation to the payment split created by order 11 hereof;
the husband is hereby restrained by himself and his servants and agents from executing a death benefit nomination in favour of any person, or doing any act or thing which would render any part of his interest in the (omitted) Superannuation Fund a non-splittable payment within the meaning of regs. 12 or 13 of the Family Law (Superannuation) Regulations 2001 and the trustee is to give effect to this order.
The husband, the wife, and the trustee of the (omitted) Superannuation Fund have liberty to apply in relation to the implementation of the orders affecting the husband’s superannuation interest.
IT IS NOTED that publication of this judgment under the pseudonym Boyle & Boyle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 4059 of 2012
| MR BOYLE |
Applicant
And
| MS BOYLE |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property adjustment under s.79 of the Family Law Act 1975 (“the Act”).
The husband and wife commenced cohabitation in 1980 and were married on (omitted) 1982. They had three children. They separated under one roof on 15 October 2011. The husband left the former matrimonial home on 12 February 2012. The parties were divorced on 29 December 2012. They lived together for about 31 years.
The legislation
Section 79 of the Act gives the court power to alter the interests of the parties to a marriage in the property of the parties to that marriage. Sub-section 79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:
(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
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)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 matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(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; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) 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; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The approach to applications under s.79
In Stanford v Stanford (2012) 247 CLR 108; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; (2012) 293 ALR 70; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act as follows:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. … The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order. (emphasis added)
38.Secondly, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. …(footnotes omitted)
39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered. (emphasis added and footnotes omitted)
40.Thirdly, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. (emphasis added and footnote omitted)
…
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4). (emphasis added and footnotes omitted)
In Stanford, the critical fact was that the parties had not separated.
The wife had suffered a stroke and had moved into a nursing home, but the parties’ marriage was intact. It was the wife’s case guardian, a daughter from an earlier marriage, who sought the alteration of property interests.
The wife died while the judgment of the Full Court of the Family Court was reserved. Consequently, when the Full Court of the Family Court came to re-exercise the discretion, the wife had no future needs, but the husband did. The High Court noted at [47] that the courts below had not adequately considered the consequences for the husband of the orders made, namely, that his home would have to be sold.
Against that backdrop, the High Court emphasised that the just and equitable requirement of s.79(2) of the Act is not necessarily satisfied merely by a consideration of the contributions of the parties as described in s.79(4) of the Act. However, in the usual case before this court, where the parties have separated, the High Court acknowledged at [42] that the just and equitable requirement would be “readily satisfied”.
Following Stanford, it is no longer appropriate to think of “contribution based entitlements” or the “adjustment” based on future factors. Rather, the court is required to take into account all the relevant matters and then determine what order, if any, is just and equitable. It is also no longer appropriate to think of a pool of assets.[1]
[1] Parkinson, Patrick Family Property Law and the Three Fundamental Propositions in Stanford v Stanford (2013) 3 Fam L Rev 80 at 88.
Additionally, and significantly for this case, the High Court emphasised that marriage, at common law, does not create a community of ownership: [39]. The rights a person might have in his or her partner’s property and income arise from the Act, notably s.79(4) and s.72(1) respectively.
In relation to income, s.72(1) of the Act provides that:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
In other words, there is not an absolute right to share equally in the income of a partner. Rather, such a right only arises where a person is not able to adequately support himself or herself and the other party is reasonably able to support the first-mentioned party. Consequently, there is no obligation to contribute all of one’s earnings to the matrimonial endeavour. However, if one party to a marriage spends a substantial part of his or her income on extraneous pursuits, it will obviously have an effect on that person’s contributions to the parties’ assets.
Stanford requires the following matters to be determined in applications brought under s.79 of the Act:
a)whether the parties have separated;
b)the assets and liabilities of each party;
c)the contributions of each party;
d)the future needs of each party;
e)bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and
f)what orders, if any, are just and equitable in all the circumstances of the case.
Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above. It does not seem to me to be possible to determine whether it is just and equitable to make an order altering the parties’ interests in their property without the other matters mentioned above having been previously determined. That seems to be clear from the opening words of s.79(4) of the Act, which are that:
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account [the various matters set out in s.79(4)] … .
The approach outlined above is consistent with the decision of the Full Court of the Family Court in Bevan & Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116. I note that in that case, the Full Court said at [89]:
In our view, it will be less likely that the separate issues arising under s 79(2) and (4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.
I also note that, in Bevan, at [79] the Full Court said, in relation to addbacks:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amendable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Whether the parties have separated
The parties agreed that they had separated.
Agreed assets and liabilities
The parties agreed that their assets and liabilities included the following:
| Joint assets | Value |
| Property A | $580,000 |
| Property D | $425,000 |
| Total joint assets | $1,005,000 |
| Joint liabilities | |
| Mortgage on Property A | $55,700 |
| Total joint liabilities | $55,700 |
| Total joint assets less liabilities | $949,300 |
| Husband’s individual assets | |
| two quad bikes | $2,000 |
| trailer | $3,000 |
| mower | $2,000 |
| car | $30,000 |
| Husband’s total individual assets | $37,000 |
| Husband’s individual liabilities | |
| loan on car | $30,000 |
| personal loan from (omitted) Bank | $20,000 |
| loan from son, Z | $7,000 |
| borrowing from X’s trust account | $4,000 |
| loan from a friend | $12,000 |
| credit card | $4,000 |
| Husband’s total individual liabilities | $77,000 |
| Husband’s total individual assets less liabilities | -$40,000 |
| Wife’s individual assets | |
| car | $17,000 |
| Wife’s total individual assets | $17,000 |
| Wife’s individual liabilities | |
| (omitted) Bank personal loan | $5,000 |
| master card | $15,500 |
| Wife’s total individual liabilities | $20,500 |
| Wife’s total individual assets less liabilities | -$3,500 |
| Total combined assets less liabilities | $905,800 |
| Husband’s total individual superannuation | $239,229 |
| ($175,000 approximately at separation) | |
| Wife’s total individual superannuation | $12,436 |
| ($11,000 approximately at separation) | |
| Total combined assets less liabilities plus superannuation | $1,157,465 |
In addition, the parties agreed that the wife’s collections of crystal and dolls would be held by her on trust for the parties’ daughter. Consequently, those collections will be excluded from the pool.
Disputed assets and liabilities
The parties were in dispute, to some extent, about the following matters.
a. capital gains tax
The husband said he had a liability of $68,625 being the capital gains tax liability on the parties’ holiday house at Property D. The husband is presently living in that house. He said he has no present intention of selling it. He did not provide any expert evidence about the amount of capital gains tax that would be payable if he were to sell it now. The figure he gave was his own estimate.
In accordance with the decision of the Full Court of the Family Court in Rosati v Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38 at [6.36], there is no proper basis upon which the court could take into account the prospective capital gains tax on the holiday house at Property D. The husband accepted that position by the end of the trial.
b. the husband’s inheritance from his father
There was a suggestion that the husband was entitled to an inheritance from his father. The husband’s father died in December last year. He had previously lived in a house with his second wife, Ms E. The husband gave evidence, which was not challenged, and which I therefore accept, that the house was in the name of Ms E. Following the separation of the husband’s father and Ms E, court orders were made for 50% of the value of the house to be paid to the husband’s father. However, shortly before his death, he made a will which left his share of the property to Ms E. A copy of the will was provided during the hearing to counsel for the wife. The effect of it was not disputed. There was no suggestion that the husband’s father had any other assets to leave. In all the circumstances, there is no reason to believe that there is any realistic prospect of the husband inheriting anything from his father.
c. the wife’s inheritance from her father
The wife acknowledged that her father suffers from dementia and she is his guardian. She said that she manages his finances on his behalf. There was no evidence to suggest that the wife’s father is likely to die in the short term. There was no evidence about the contents of any will he may have prepared already or about whether his dementia is so severe that he lacks testamentary capacity. In all the circumstances, the prospect of the wife inheriting something from her father appears to be too remote and vague for the court to give it any significant weight. See White and Tulloch v White (1995) 127 FLR 105; (1995) 19 Fam LR 696; (1995) FLC 92-640.
d. the husband’s entitlement under the Fair Entitlements Guarantee Act 2012
The husband’s employer went into liquidation in November 2013 owing the husband $57,299 in entitlements. The husband has applied for assistance under the Fair Entitlements Guarantee Act 2012. At the time of trial, the court was provided with an email dated 8 October 2014 from the (omitted)[2], which appears to administer the scheme. It said that the husband’s claim was still being assessed. The writer of the email was unable to advise the amount in unpaid entitlements the husband may be eligible to receive and was unable to advise when the husband’s claim would be finalised.
[2] Exhibit “B” to the husband’s affidavit sworn on 13 October 2014
However, following the hearing, when judgment was about to be handed down, the parties advised the court that the husband’s entitlement had been assessed. The matter was listed for directions. At the directions hearing, a letter outlining the amount that the husband had actually received was tendered. It indicated that, after tax, the $35,960.78 that the husband had received was broken down as follows:
a)annual leave $8,092.49
b)payment in lieu of notice $10,855.75
c)redundancy $12,775.00
d)long service leave $4,237.54
The husband worked for the company in question for almost 20 years from 14 February 1994 to 19 November 2013. About 90% of the husband’s employment with that company occurred during the parties’ cohabitation. The husband’s application[3] under the fair entitlements guarantee scheme indicated that his claim of $57,303.16 was made up as follows:
a)annual leave of 210.89 hours: $12,050.25;
b)annual leave loading on 210.89 hours: $2,108.79;
c)payment in lieu of notice: 190 hours: $10,856.60;
d)redundancy: 456 hours: $26,055.84; and
e)long service leave: 109.06 hours: $6,231.68.
[3] Exhibit “A” to the husband’s affidavit sworn on 13 October 2014
The outstanding annual leave of 210 hours amounts to 5.25 weeks. Assuming that the husband was entitled to the standard four weeks annual leave, all of the outstanding leave and leave loading would be referable to the period since separation. About 10% of the payment in lieu of notice and the redundancy payment would be referable to the period since separation. The long service leave component is not clear on the evidence. The husband has utilised or cashed out a considerable amount of long service leave over the years. The amount of outstanding long service leave represents about 2.725 weeks’ work. It seems to me that it is likely that all of the husband’s present entitlement to long service leave has accrued since separation.
The part of the claim that is referable to the relationship is about 90% of the pay in lieu of notice and about 90% of the redundancy payment. The amount that the husband has received for those two claims totals $23,630.75. Ninety per cent of that figure is $21,267.67. Whether the wife should get some or all of that amount is considered further below, in the light of Burke v Burke (1992) 112 FLR 250; (1992) 16 Fam LR 324; (1993) FLC 92-356.
e. the husband’s alleged nondisclosure
The wife appears to have been firmly convinced that the husband had failed to disclose significant assets. It appears that the wife through her own endeavours identified a bank account in (country omitted) that was in the husband’s name. There is no suggestion that it presently contains any money. It also emerged during cross examination that the husband had an outstanding claim under the fair entitlements guarantee scheme. Otherwise, there is no material before the court which would justify a finding that the husband has failed to disclose any assets of significance.
f. the wife’s WorkCover claim
The wife has been on WorkCover following an injury at work in February 2009. There was a suggestion that she might be entitled to a lump sum payment. However, she gave evidence, which was not challenged, that she expected to return to work. On the other hand, she said that she did not know whether she would receive a payout from WorkCover.
However, at the directions hearing following the final hearing, documents were tendered which indicated that the wife had signed an application for an impairment benefit on 31 May 2014. The documents indicated that an impairment benefit is separate from weekly payments and the payment of medical services. The documents indicated that the claim had been lodged by the wife’s solicitors on or about 3 October 2014.
In addition, the documents included a letter dated 24 October 2014 indicating that the wife had requested a conciliation conference regarding the termination of her weekly payments. It appears that the request was accepted but a date for the conciliation conference had not been appointed.
It seems that the wife’s application for a lump sum payment is at a very early stage. There is no material on which I could form any assessment about the likelihood of the wife receiving any amount by way of a lump sum, or when any such sum might be payable, or how much any such sum might be. Obviously, any lump sum payment would be received after separation. The claim relates to an injury received by the wife in February 2009, about 2½ years before the end of the 31 year relationship.
The wife’s claim for a lump sum payment could be regarded as a presently existing asset consisting of a chose in action of unknown value. The husband submitted that the matter could be dealt with by way of an order that he receive a particular percentage of any lump sum that the wife might receive in the future. Such a course would have the undesirable result of continuing the financial connection between the parties for some time, possibly for years. For that reason alone, I am not persuaded of the virtue of that course.
It seems to me that the wife’s application for a lump sum payment is an unquantifiable, possible, future, financial resource. No particular value can be attributed to it. The prospect of the wife receiving a lump sum payment at some time in the future is too remote and vague for the court to give any significant weight to it.
g. the distribution of assets and liabilities
Notwithstanding the various assets and liabilities that the parties now have, they proceeded in closing submissions on the basis that:
a)the wife would keep the Property A property, with the attached mortgage, her car and the mower (agreed value of $543,300);
b)the husband would keep the Property D property, the trailer and the quad bikes (agreed value of $430,000);
c)their superannuation would be equalised; and
d)they would each keep their own liabilities, which accrued post separation, except for the mortgage on the Property A property, which the wife would keep.
However, the wife argued that, in addition, the husband should give her a payment of $40,680, which would mean that her share of the parties’ assets was 60%. Furthermore, the wife argued that she should also be given 60% of any payment that the husband received under the fair entitlements guarantee scheme.
On the other hand, the husband argued that the equalisation of superannuation should be on the basis of the amount of superannuation that the parties had at the time of separation. The wife argued that the equalisation should be on the basis of the amount of superannuation that they have now, less about $20,000 which consisted of the husband’s post separation superannuation contributions and the interest thereon. The husband conceded that the post-separation increase in his superannuation was partly an increase arising from the fund manager’s investment of the amount existing at separation and partly the result of his post-separation employer contributions and the return thereon. The husband agreed that, post-separation, his only superannuation contributions consisted of the standard employer contributions. This matter is considered further below.
The husband submitted that there should be no additional payment from either party. On that basis, the wife would receive 55.82% of the parties’ non-superannuation assets. The husband submitted that if the wife were to receive a proportion of any payment to the husband under the fair entitlements guarantee scheme, the husband should receive a corresponding proportion of any payments the wife received from WorkCover.
Finally, there was also a dispute about some chattels. That is discussed further below.
Contributions
a. Initial contributions
Neither party made any submission to the effect that their initial contributions were anything other than equal. In any event, after a 31 year relationship, any disproportionate initial contributions would have diminished in significance.
b. Contributions during the marriage
The parties ultimately did not seek to argue that their contributions during the marriage were anything other than equal. The parties largely had a traditional division of labour with the husband being the principal wage earner and the wife being the principal homemaker. The husband during the course of the proceedings emphasised that he had earned virtually all of the money, personally built the parties’ holiday house at Property D and cashed in various leave entitlements. However, ultimately, the husband appears to have recognised that these financial contributions did not outweigh the wife’s homemaker contributions. Obviously, if the wife had not been caring for the children, the husband would not have been free to build the holiday house.
I note that in 2004, the husband received $40,000 in workers’ compensation. There was no material before the court about whether that amount was for pain and suffering or for lost earnings or past or future medical expenses. In those circumstances, and in view of the fact that the payment was well before separation, it does not appear to me that any particular weight can be given to that payment: Aleksovski v Aleksovski (1996) 135 FLR 131; (1996) 20 Fam LR 894; (1996) FLC 92-705.
c. Contributions post separation
Since separation, the wife has continued to live in the former matrimonial home. She has paid the mortgage and other outgoings on that property. The husband since separation has lived in the parties’ holiday house at Property D. There is no mortgage on the Property D property. The husband has paid the other outgoings on that property.
The oldest child of the relationship, who is a son aged 26, has lived independently since separation. The second child of the relationship, who is a son aged 22 and who earns a modest income, has lived with the husband since separation. The youngest child of the relationship, who is a daughter who turned 15 on (omitted) 2014, has continued to live with the wife since separation. The sons are estranged from their mother. The daughter is estranged from her father.
The s.79(4)(d), (e), (f) and (g) and the s.75(2) factors
The husband is 55 years old. The wife is 53 years old.
The husband claims to have anxiety and depression resulting from the stress of the breakdown of his marriage and the fact that his father and a brother died recently of bowel cancer. The husband did not provide an affidavit from a medical expert concerning his alleged anxiety and depression. However, the husband is currently in receipt of income protection insurance payments of about $50,000 per annum. The husband said, without challenge, that the insurance company accepted that he was unable to work for medical reasons. I infer from the fact that the husband is in receipt of income protection insurance payments that he does in fact have a medical reason for not working at present.
Previously, the husband was employed as a (occupation omitted) earning between $90,000 and $100,000 per annum. The husband ceased working on 19 November 2013 when his employer went into liquidation. The husband had another job for a short time but is presently not working for health reasons. It seems likely, and the husband did not dispute, that once these proceedings have finalised the husband’s anxiety and depression will resolve and he will be able to return to work at a level commensurate with his previous experience.
The wife previously worked as a (occupation omitted) in (employer omitted). She has been on WorkCover payments since November 2012. They work out to about $18,400 per annum. The wife said without challenge that she will not be able to return to her former type of employment and will be retrained for a new career. She said in cross-examination that she intends to return to work in the foreseeable future. It seems unlikely that the wife will be able to earn more than a modest income. As mentioned above, the wife’s weekly payments appear to have been terminated.
The financial resources of the parties are discussed elsewhere.
The wife has the care and control of a child of the marriage who has not attained the age of 18 years.
Each party has the usual commitments to enable them to support themselves and, in the case of the wife, their daughter. There was no suggestion that either party has a duty to maintain any other person or the responsibility to support any other person.
The wife is in receipt of family tax benefits A and B of about $305 per week. As mentioned the husband receives an income protection insurance payment. Otherwise, neither party is in receipt of a pension, allowance or benefit.
A reasonable standard of living for the parties in this case would be in the average range.
There was no claim for spousal maintenance. There was no suggestion that any proposed order would have any impact on the ability of a creditor to recover the creditor’s debt.
Except as mentioned elsewhere, there was no suggestion that either party had contributed to the income, earning capacity, property or financial resources of the other party.
The marriage lasted 31 years. The wife does not have a great earning capacity but whether that is because of the duration of the marriage is not known.
It was not suggested in this case that it is necessary to protect the party who wishes to continue that party’s role as a parent.
It was not suggested that either party is cohabiting with another person, save that each party is residing with one of their children. The 15-year-old daughter presumably does not earn any money. The husband said without challenge that his son earns a modest amount.
The terms of any order to be made under s.79 of the Act will be determined in these proceedings.
The husband has paid child support for the parties’ daughter as assessed. That amount has reduced since the husband’s employer went into liquidation and since the husband has begun receiving income protection insurance payments.
There are no other factual circumstances which the justice of the case requires to be taken into account.
There was no suggestion that there is any financial agreement that is binding on the parties.
Whether it is just and equitable to alter the parties’ property interests
The parties agreed that it would be just and equitable to alter their property interests in this case. In view of paragraph 42 of Stanford, the fact that the parties are no longer living in a marital relationship and the various findings made above in relation to contributions and future needs, I also consider that it would be just and equitable to alter the parties’ property interests in this case.
What order is just and equitable
Taking into account all of the matters addressed above, it seems to me to be just and equitable that the wife receive:
a)57.5% of the parties’ assets;
b)50% of the parties’ present superannuation entitlements, less $20,000, which represents the approximate amount of the husband’s employer’s post separation contributions and the interest thereon; and
c)57.5% of 90% of the payment the husband has received under the Fair Entitlements Guarantee Act 2012 as a payment in lieu of notice or as a redundancy payment.
That adjustment takes into account the respective contributions of the parties over the years and their respective future needs. Of particular significance is the fact that the wife has the care of the only child of the relationship who is under 18 years of age and the wife has a lesser earning capacity than the husband.
In relation to the parties’ assets as they were known at trial, it was agreed that the wife would keep assets worth $543,300 and the husband would keep assets worth $430,000 (leaving aside their post separation debts). That makes a total of $973,300. Of that figure, 57.5% equals $559,647. As the wife is to retain assets worth $543,300, that figure should be taken from $559,647. That leaves $16,347 which the husband should give to the wife to raise the wife’s share of the assets that were known at trial to 57.5%.
In addition, the wife should receive from the husband 57.5% of 90% of the payment the husband has received under the Fair Entitlements Guarantee Act 2012 as payment in lieu of notice or as a redundancy payment. That is, 57.5% of $21,267.67 which equals $12,228.91. Adding that figure to the $16,347 equals $28,575.91 which the husband should give the wife.
It seems to me that the proper approach to the equalisation of superannuation is to equalise the parties’ present superannuation entitlements, less the amount that has accrued to the husband post separation from his post separation employer contributions and the interest thereon. The husband’s superannuation since separation has obviously grown substantially simply because the fund manager has well managed the amount that accrued during the relationship. There is no reason that the husband should have the benefit of that increase to the exclusion of the wife.
The husband’s present superannuation entitlement is $239,229 and the wife’s is $12,436. That makes a total of $251,665. Taking $20,000 from that figure (as a reasonable estimate of the husband’s post-separation employer contributions and the interest thereon) leaves $231,665. That figure divided by two leaves $115,832. The wife already has $12,436, which should be taken from that figure. That leaves $103,396 that should be the base amount in the superannuation splitting orders. Procedural fairness has been afforded to the trustee of the husband’s superannuation fund.
There will be orders giving effect to this distribution.
Chattels
The parties were also in dispute about some chattels that are variously of no, negligible or unknown financial value.
The first item was a (omitted) figurine that is currently in the possession of the wife. It was given to the husband and wife jointly. As no valuation evidence was provided in relation to this item, the only realistic approach is to order the wife sell it for the best price reasonably obtainable and distribute the proceeds between herself and the husband in the proportions 57.5% and 42.5% respectively.
The next items are the husband’s tools and personal property in the shed, garage and under the house. There was no detail about what these items were. The wife said that the only tools at the Property A property were her father’s. She said the only things the husband had left at the Property A property were broken tools and things discarded from previous renovations all of which had been thrown out. I accept the wife’s evidence about these matters.
The next item is original photographs related to the husband’s family, the children’s photos, and the husband’s childhood photos. The wife maintained that some photographs from her husband’s family were given to her because she was doing genealogical research. However, I consider that she was only given those photographs because she was married to the husband. It is possible to get good quality reproductions of printed photographs without any need to have the negative.
It seems to me that the wife should give to the husband within 14 days the original photographs related to the husband’s family and the husband’s childhood photographs. If the wife wants a copy for herself, she can obtain them at her own expense.
In relation to the children’s photographs, it is proper that each parent have a copy of every photograph that they want. In the absence of any ability of the husband and wife to go through the photographs together and select those that they might want, the wife should obtain a copy of all of the children’s photographs. Within 14 days, she should give half of the originals and half of the copies of the children’s photographs to the husband and he should give her half of the cost of obtaining the copies.
The next item is the husband’s original paperwork such as schooling records, diplomas and framed certificates. These are clearly the husband’s documents. The wife should return any of them still remaining in the Property A property to the husband within 14 days.
The next item is a family tree wall display relating to the husband’s genealogy. The wife said, without challenge, that the husband’s uncle had provided two copies of the family tree, one was framed and is hanging in the Property A property and the other is unframed and is at the Property D property. It seems to me to be reasonable that each party keep the copy of the family tree that they have. If the husband wants his copy framed, he can attend to that himself.
The next item is Z’s scout gear, uniforms and camping equipment. The wife said that these items were still at the Property A property.
She said, without challenge, that Z had told her to burn them but she did not. The husband evidently asked for these items because Z is living with him. Z and Y are estranged to from their mother. She says that, if Z and Y ask her for their possessions, she will give them to them. Z is an adult. If he wants these items, he can ask his mother for them.
The next item is Z’s original school records, certificates and VCE certificate. The wife said, without challenge, that she had looked for Z certificate but had not been able to find it. She said that she found a related document which she sent to Z by registered post. She said that the education department said that a copy of the VCE certificate could be provided to Z at a nominal price.
The wife did not say what had become of Z’s other school records. However, it seems to me that, as Z is an adult, he should ask his mother for his school records if he wants them.
The next item is Y’s and Z’s original school photographs. The wife said that she had purchased these photographs, still had them and intended to put them in albums and retain them in the children’s keepsake boxes. Clearly, the wife purchased those photographs out of family money. Clearly, both parents would want copies of the children’s school photographs. It seems to me that the appropriate course is for the wife to obtain copies of the original school photographs and provide half of the originals and half of the copies to the husband within 14 days. The husband should pay the wife half of the associated costs.
The next item is Y’s school documents, certificates, psychologist folder and reports. The wife said that she had retained these documents. She said that they are the property of the parents as they were given by the education department to them. However, she did say that she would give them to her son at a future date. In my view, Y is an adult. If he wants those documents he should ask his mother for them.
The next item is Y’s furniture, being a double bunk, two mattresses and two white cabinets. The wife said that these items were in her garage. She said that she had sent a message to Y asking when he would like to collect them but had not received a reply. As mentioned, Y is an adult. If he wants these items, he should ask his mother for them.
The last items are the keepsake boxes of Y and Z. The wife explained that she had collected bits and pieces for the children throughout their babyhood. The wife, without challenge, said that she intended to give the keepsake boxes to the children when they want them, hopefully when they are reconciled to her. As stated previously, Y and Z and adults. If they want these items, they should ask their mother for them.
It was suggested a third party be used to pass any chattels between the husband and the wife pursuant to the orders in this proceeding. However, there was no suggestion as to who the third party should be. In the circumstances, it seems to me to be preferable to leave the husband and the wife to sort out this aspect of the matter themselves, as they are also adults.
I cannot help but remark that it is very sad that Y and Z are estranged from their mother and that X is estranged from her father. Ideally, the husband and wife would be willing to facilitate family therapy to enable all of their children to have ongoing relationships with both of their parents. Presumably, both the husband and the wife are partly responsible for the present situation. Consequently, if they are able to embark on family therapy, the husband and the wife ought to pay for it in equal shares. Obviously, the court cannot make orders for family therapy in this proceeding as it is confined to property matters.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Judge Riley
Associate:
Date: 21 November 2014
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