Byrnes and Mortimer - [2004] FMCAfam 376

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BYRNES & MORTIMER

[2004] FMCAfam 376

FAMILY LAW – Property – superannuation pension – valuation of assets and contributions – whether appropriate to split superannuation pension – disability pension from superannuation fund.

Family Law Act, 1975, ss.79, 75(2), 90mt

Allen & Allen (Unrep, Sydney, 23 Jan 04)

Biltoft and Biltoft (1995) FLC ¶92–614
Brandt & Brandt (1997) FLC ¶92–758

Cahill & Cahill (Unrep, Canberra, 7 March 2003)
Danielian & Danielian [1999] FamCA 473 (unreported)
De Angelis and De Angelis (2003) FLC ¶93-133
Ennis & Ennis (Unrep, Brisbane, 19 December 2003)

Farmer & Bramley (2000) FLC ¶93–060

Farnell & Farnell (1996) FLC ¶92-681

Ferraro & Ferraro (1993) FLC ¶92–335
Figgins & Figgins (2002) FLC ¶93–122
G & G (1984) FLC ¶91–582
Hickey & Hickey & Attorney–General (C’th) (2003) FLC ¶93–143

Kowaliw and Kowaliw (1981) FLC ¶91-092

Norbis & Norbis (1986) FLC ¶91–712; (1986) 161 CLR 513
Pierce & Pierce (1999) FLC ¶92–844
Q and Q (2003) FLC ¶93–163

Robb & Robb (1995) FLC ¶92-555

Applicant:

KIM PATRICIA BYRNES

Respondent:

ALAN JEARARD MORTIMER

File No:

NCM 5330 of 2002

Delivered on:

29 November 2004

Delivered at:

Melbourne

Hearing dates:

28 & 29 July 2004, 23 September 2004

Last Submission:

25 October 2004

Judgment of:

Riethmuller FM

REPRESENTATION

Counsel for the Applicant:

Mr Theobald

Solicitors for the Applicant:

BL Crane & Associates

Counsel for the Respondent:

Mr Hodgsen

Solicitors for the Respondent:

Christopher Hughes Family Lawyer

ORDERS

The husband sign a transfer of his interest in the former matrimonial home situated at 11 Westview Drive, Goonellabah (Certificate of Title Folio Identified 25/248490) to the wife and provide that document to the wife in registrable form within 90 days of the date of this order in exchange for:
(a)the wife discharging the liabilities of the parties to the National Australia Bank; and
(b)payment to the husband of $67,261.00.
If the wife fails to comply with order 1 or is unable to finance the transfer the husband, the husband is ordered to pay to the wife the sum of $93,034.00 within 60 days of being advised by the wife that she cannot pay out the husband’s interest or the expiration of 90 days (whichever first occurs) in exchange for:
(a)A transfer signed by the wife transferring her interest in the former matrimonial home situated at 11 Westview Drive, Goonellabah (Certificate of Title Folio Identified 25/248490) to the husband; and
(b)the husband discharging the liabilities of the parties to the National Australia Bank
If the wife fails to comply with order 1 and the husband fails to comply with order 2, then the said property is to be sold, and the parties take the net proceeds of sale in the proportion of 58% to the wife and 42% to the husband.
With respect to the husband’s superannuation fund:
(a)this order be binding upon the trustee of the fund;
(b)that pursuant to section 90mt(1)(a) of the Family Law Act whenever a splittable payment becomes payable in respect of the interest of the husband in the fund the wife shall be entitled to be paid 25% thereof and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders.
(c)that order 4(b) have effect from the operative time which shall be 14 business days after service of this order upon the trustee.
(d)that pursuant to section 90mt(1)(a) of the Family Law Act whenever a splittable payment becomes payable in respect of the interest of the husband in the fund the wife shall be entitled to be paid a further 33% of the husband’s interest remaining after order 4(b) is put into effect, and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders (with the effect that after the husband’s pension is commuted to a lump sum, each party will have 2 one quarter interests in the lump sum).
(e)that order 4(d) have effect from the operative time which shall be The Husband’s 60^th birthday.
That an injunction issue, and the husband be hereby required to undertake all steps necessary to commute his superannuation interest to a lump sum at age 60.
An injunction issue, and the husband be required to take all reasonable steps requested of him by the wife to enable her to effect a policy of life insurance with respect to his life if she so chooses.
That the Husband and the wife each retain sole ownership of the chattels and other property or interests in their possession or held in their respective names.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

NCM 5330 of 2002

KIM PATRICIA BYRNES

Applicant

And

ALAN JEARARD MORTIMER

Respondent

REASONS FOR JUDGMENT

Applications

This matter concerns competing applications for property settlement between the husband and wife.
The proceedings were commenced by the wife who filed an application on 1 November 2002. The husband’s amended Response was filed on 20 May 2004.
The proceedings also related to children’s issues, which issues were resolved by consent orders at the commencement of the hearing providing for shared care of the children.

Background

The husband was born on 8 September 1958. He is 45 years of age. The wife was born on 23 September 1961. She is 42 years of age.
The parties were married on 12 November 1988 having commenced their relationship in November 1987. The parties separated on 5 July 2002. The relationship was for a period in excess of 13 years.
There are two children of the marriage, Chanel Elizabeth, born 30 August 1993 and Christopher Ryan, born 31 December 1991. The day to day care of the children is shared equally by parties.
The wife also has two children from a previous marriage, Christopher Mazzorana born 10 February 1982 and Clifford Mazzorana born 13 October 1985.

The law

Section 79(1) of the Family Law Act enables the court to ‘make such orders as the court considers appropriate altering the interests of the parties in the property’. Section 79 sets out a number of significant matters that must be considered in order to determine what orders would be appropriate.
In the 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:
“[39] 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 for 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 identifying and assess the contributions of the parties within the meaning of s. 79 (4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as percentage of the net value of the property of the parties. Thirdly, the court should identifying 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 determine 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.”
In undertaking the first step the various items of property can be identified with reasonable precision and valued. However, in the subsequent steps it is simply not possible to make an adjustment for each relevant factor with mathematical precision. This was clearly stated by Nygh J in G & G (1984) FLC ¶91-582 (at p 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 the High Court in Norbis & Norbis (1986) FLC ¶91-712; (1986) 161 CLR 513 and has been regularly repeated in the authorities: see for example Brandt & Brandt (1997) FLC ¶92-758; 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”: 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: Russell & Russell (1999) FLC ¶92-877.

Standard of proof and findings

The appropriate standard of proof which I have applied, subject to the gravity of the particular factual issues, is the civil standard, namely the balance of probabilities. I have had the benefit of observing the husband and the wife and the wife’s father in the witness box, on their oath, when each gave evidence and were cross examined. Such observation of witnesses giving their evidence is, a valuable means to assist in arriving at the truth of the matter. In what follows statement of fact constitute findings of fact of which I am satisfied on the balance of probabilities after taking into account the evidence and my observation of the witnesses.

The Property of the Parties

The property pool in this case (other than superannuation) is relatively small, consisting of a small number of chattels, including motor vehicles that each of the parties operates, some furniture, a boat and a small parcel of Commonwealth bank shares and a house.
It is agreed the furniture has been spilt roughly equally between the parties at separation. In the circumstances I do not propose to make further orders with respect to the furniture.
It is also agreed that each party had a motor vehicle at separation, which has been sold to purchase the currently owned vehicles. The wife’s vehicle was sold for $7,500.00 and the husband’s for $5,000.00. The parties agreed to adopt these amounts as the values of vehicles for the purpose of the property settlement proceedings, rather than attempting to consider the post separation receipt of those funds and contributions with respect to the motor vehicles. This seems an appropriate method to minimise a relatively small issue for the purpose of these proceedings.
There was no evidence as to the value of the husband’s boat and trailer. As these are used for the benefit of the children the wife did not pursue this issue at the trial.
The shares have an agreed value of $2,944.00. The parties own a home with an agreed value of $260,000.00.
The wife has been involved in a business with her father known as "Hector's Place", which the wife says is effectively worth nothing as it will be closing down once the lease finishes in August of this year. The husband advanced a case that the business had a greater value. The evidence of the value of the business comes primarily from the wife’s father. The books of the business show that the business owes the wife’s father around $13,000.00 and the wife $1,000.00 with the balance of any sale proceeds net of expenses to be shared equally. The only offer that the wife and her father have had on the business is for the purchase of the plant and equipment at $13,000.00, which they rejected in the hope of a better offer. No better offer has been forthcoming and the wife’s father is considering placing the equipment in storage. The only other asset of the business is around $2,000.00 in the bank.
On the material available I am not satisfied that the mother is likely to receive any significant sum from the business, rather it is more likely than not that she will receive nothing from the closure of the business, other than the release from the lease. I am satisfied on the evidence that the most likely outcome is that the business will close insolvent and that the wife’s father will retain the plant and equipment which he will most likely sell for less than the amount owing to him in the business loan account. Ultimately, I am not satisfied that the wife’s father will press her for any payment due to him now or consequent upon the winding up of the business (Biltoft and Biltoft (1995) FLC ¶92-614) Accordingly, I find that the wife will receive no further benefit nor suffer any detriment as a result of her involvement in this business. It follows that I have not attributed a value to the wife’s business interests when I have identified the assets divisible between the parties.
In the first financial statement filed by the wife in September 2002 she deposed that she had a credit of $8,000.00 in the bank. In cross-examination at the wife denied that this was the case saying that the statement must have been completed in error. The wife's denials in this regard appeared most convincing. There is no other evidence to indicate that this was anything other than a mistake. In the circumstances I do not accept the wife had a further $8,000.00 from some unknown source in a bank account.
During cross-examination of the husband it transpired that he owns a one half share of a bull and a few cattle on his brother’s property. That was not disclosed in the husband’s financial statement. Importantly, the issue of cattle ownership had been raised in the wife’s affidavit of 1 March 2004 at paragraph 23. In response the husband swore that:
Admitted to the extent that some years prior I had agisted about 20 cattle on a property my father looked after. Since doing so my father had been solely responsible for attending to the cattle and maintaining them and I had not paid any agistment fee. When I came to ask my father to sell the cattle I became aware that he had sold the cattle. I do not know what the proceeds of sale were used for but estimate they would have been no more than $3,000.00. I did not argue the point with my father given that he had maintained and bore the cost of the cattle for a number of years without any agistment fee being paid by me. Admitted that I did not put any sum toward the purchase of the former matrimonial home although I was a joint borrower in respect of the mortgage advance.
Unfortunately there is no evidence of the value of the cattle, other than the bull that was purchased for around $300.00, according to the husband. The husband clearly has an interest in a small number of cattle
The wife also has an endowment policy with an agreed value of $2,685.00.
The parties have secured debts to the National Australia Bank of $103,772.00. Some $19,790.00 of this sum is the amount used by the wife to enter into the business with her father whilst the parties were together. Only a day before separation a further $11,400.00 was drawn on one of the loan accounts by the wife. This money was placed in the business account of “Hector’s Place” and ultimately used in the day to day operation of the business. It appears to have taken some months for this sum to be used up in the business. I reject the wife’s evidence that the money was immediately required, but accept that it was ultimately used up in running the business and accept her father’s evidence that this is reflected in the business loan accounts. The debt is therefore a liability of the parties to be taken into account in determining the pool.
The property pool, apart from superannuation, is therefore as follows:
a)The Home at Goonellabah  $260,000.00
b)The wife’s motor vehicle  $7,500.00
c)The husband’s motor vehicle  $5,000.00
d)The bull  $300.00
e)The wife’s shares  $2,944.00
f)The wife’s endowment policy  $2,685.00
Total     $278,429.00
After deducting the debts of the parties of $99,704.00 (as agreed at trial) this comes to a net pool of non-superannuation property of $178,725.00.

Superannuation Interests of the Parties

Pursuant to section 90mc of the Family Law Act, superannuation is treated as property of the parties and must be valued.
The husband has a superannuation entitlement from the New South Wales Police Service superannuation fund. This is a defined benefit fund. As result of the husband's disability that superannuation policy is in the payment phase, providing him with an income of approximately $41,524.32 per annum. This pension is indexed for movements in the CPI and will continue until he attains 60 years of age. Once he attains 60 years he has the option of commuting the pension to a lump sum or continuing to receive the pension. The pension payable pursuant to the superannuation scheme is able to be split with a splitting order under the Family Law Act. Similarly any lump-sum payable when many husband attains 60 years is also able to be split.
With respect to the superannuation issue Mr Bourke was called as a witness to provide some explanation of the superannuation scheme. He and Mr Gaudion both provided reports, reaching substantially the same valuation figures for the superannuation fund using a method analogous to that set out in the Regulations.
As there is no prescribed method for valuing this particular superannuation interest the court must value the superannuation by whatever method it considers appropriate: s. 90mt(2)(b) of the Family Law Act.
The trustee of the husband’s superannuation fund are presently seeking a scheme specific valuation from the Attorney General. It is not known how far this application has progressed nor when the outcome may be achieved. I was not asked by either party to delay my determination of this matter until after the outcome of the trustee’s specific factors application is known. Having regard to the types of orders that I propose to make and the overall justice of the case, I am satisfied that I ought to deal with the matter now on the evidence before me rather than to delay this matter until such time as an outcome of the application for a scheme specific valuation method is obtained.
I have considered the method of valuation provided and agreed to by the two experts. I accept the figures reached by them as the valuation for the superannuation interests in this case
Mr Bourke was cross-examined about whether or not the current pension, being a pension because of disability, could be the subject of a splitting order. Mr Bourke confirmed that this was not an insured component as the husband's superannuation scheme is a self-insurer, and therefore the pension falls within the existing legal framework of splittable interests.
Mr Bourke explained that if I were to make an order requiring the husband to commute the pension to a lump sum at age 60 then I would have the option of either setting a base amount to be paid to the wife or making a percentage splitting order. If I were to set a base amount that base amount would be indexed at a rate set by government from year-to-year. The commuted pension value would be increased at a rate set under the scheme that operates for New South Wales’ police. There is no way of knowing whether the increase in the amount set as a base amount would be the same as that under the scheme, and in any event it appears that the wife would not be able to withdraw or transfer any of the base amount to an alternative scheme before the husband attains 60. For these reasons it seems to me that the appropriate method of splitting would be by way of percentage.
I take into account that the commuted pension amount available when the husband attains 60 would not be sufficient to buy a similar pension at commercial rates. Any order requiring the husband to commute the pension at age 60 will therefore be to his detriment, however the assets of the parties are such that there may not be any other alternative if a ‘just and equitable’ result is to be achieved. Indeed, even on the husband’s case the pension must be commuted at age 60 and split between the parties.

In this case the lump-sum value of the pension is somewhat academic as there are certainly not sufficient assets of the parties to make an appropriate property division without splitting the superannuation, and the pension cannot be commuted to a lump sum until the husband attains 60. On the husband attaining 60 years then either the whole of the pension must be commuted to a lump sum or none at all.
The valuation of the fund was agreed by the experts called on behalf of the wife and the husband in the sum of $767,385.00, assuming that the whole of the interest was taken as a lump sum. The value of the superannuation interest if commuted to a lump sum on the husband attaining 60 years was $315,664.00. I accept these valuations for the purpose of this case.
The wife also has a small superannuation fund valued at $2,530.00.
The total property pool is therefore, on a global approach, $948,340.00. Of course, the different characteristics of the various items of property must be considered in order to determine the appropriate division of property of the parties, particularly in a case such as the present where the non-superannuation assets are a very small proportion of the overall pool.
The pool is perhaps better described as consisting of three main categories:
a)Assets presently able to be liquidated:  $178,725.00
b)Superannuation lump sums on retirement:  $318,194.00
c)
Lump-sum value of the superannuation pension

to 60:  $451,721.00
Counsel for the husband argued that the superannuation interest of the husband, at least in so far as it was represented by a pension to age 60, ought to be treated as a financial resource and not as property. This argument was said to rely upon the unreported decision of Coleman J in Cahill and Cahill (Unrep, Canberra, 7 March 2003). In that case his Honour did accept that a DFRDB pension was property, but declined to make a contribution finding with respect to the DFRDB pension, preferring to consider it a factor under s.75(2). Importantly, however, in that case the parties had agreed that the case be determined on the basis that the husband would retain all of his superannuation entitlements (see para [2]).
I was also referred to a decision of O’Reilly J in Ennis and Ennis (Unrep, Brisbane, 19 December 2003). In that case, O’Reilly J concluded that the capitalised value of the superannuation interest must only be added to the pool of property if the court were minded to make a splitting order (see para [86]). In determining whether to make a splitting order with respect to a superannuation interest in the form of a pension her Honour stated:
87. In this case, it appears to me that a splitting order would not be just and equitable, for three reasons. First, a just and equitable property division can be achieved without it. That is to say, it is not as if the DFRDB scheme interest is the only item of property, or that it is the principal item of property with modest other assets in the pool. Secondly, there is the real concern of an inequitable result for the wife, if I should split the pension, so that it must come into the pool at the capitalised value, if the husband should then predecease the wife. Thirdly, there would be no inequitable result for the husband by not splitting the interest. The husband would receive the same percentage or division of all other assets as I determine is just and equitable, plus the full value (not just half of it) of the pension (whether that is regarded by him as the capitalised value of $506,508.00, or the Perrett value).
In Allen and Allen (Unrep, Sydney, 23 Jan 04) Chisholm J dealt with a superannuation pension as property, by simply applying the current provisions of the Family Law Act.
I prefer the approach of Chishom J which appears to simply apply the legislation as written. In any event, the present case clearly fails the first of the tests suggested by O’Rielly J in Ennis. The present case is also very different to the circumstances dealt with by Coleman J in Cahill. In this case, a superannuation splitting order is not only open but ultimately required, in one form or another, on each of the versions of the final orders sought by the parties.
For the above reasons, I do not propose to treat the parties’ superannuation interests as financial resources, but rather to treat them as property under the Family Law Act

Contributions of the parties

I now turn to the second of the steps in the exercise under section 79, namely an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). These provisions are as follows:
79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, 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;
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;
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.
At the commencement of the relationship the husband was already employed as a police officer in New South Wales and a member of the Police Superannuation Scheme. He had been a member of the scheme for some 45 months, or thereabouts. This scheme is run pursuant to the provisions of the Police Regulation (Superannuation) Act 1906 (NSW) and the State Authorities Non-contributory Superannuation Act 1987 (NSW). The scheme is a defined benefit scheme for police officers. For this reason the amount of the present entitlements are governed by the rank and service of the husband. His period of service as a police officer before the relationship therefore contributed to the amount of the present entitlements. There was no evidence before me as to the amount of the husband’s pre-cohabitation contributions to superannuation. In any event, the basis of the husband’s right to his present entitlement to an indexed pension until the age of 60 years and, thereafter, a pension commutable to a lump sum, arises as an incident of the husband’s work related illness and his rank at the time of discharge from service rather than years of service or amount of contributions
The wife states that the husband had some credit card debt ($2,000.00) at the commencement of the relationship, which the husband does not dispute.
The wife brought to the relationship a home from a former marriage with an equity of around $40,000.00 at the commencement of the relationship.
The initial contribution of the wife was clearly substantial, and should not be minimised, despite the length of the relationship. I note that the Full Court of the Family Court in the Pierce & Pierce (1999) FLC ¶92,844 at page 85,873 said as follows:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weight the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home…
Whilst the husband was employed as a police officer he earned a greater income than the wife. The extent of the disparity can be seen in the income amounts set out in the husband’s affidavit.
I am satisfied that he made far greater direct financial contributions to the household.
It was put to the wife that she used her income mainly from her own purposes, and in particular reference was made to the MG motor vehicle that was operated by the wife. The car was not a particularly expensive purchase, although no doubt a luxury given the financial position of the parties. The wife pointed out that she also assisted in payments for the overseas trip that the parties took, medical and veterinary expenses, presents for children, and payments on a lounge and a bed.
The husband also had hobbies or interests as are recounted by the wife in her affidavit, where she states:
78. It seemed [the husband] would get a high when planning things, whether that be a holiday all renovations to the house will buying a new car, a racing bike, gym equipment or flying lessons. He would spend a lot of time planning, gathering information and prices and then embark upon the purchase by borrowing on the equity in the home or personal lines from the Police Credit Union. He would usually badger me until I agreed to the purchase of the item. Once the items purchased he would lose interest in it.
It does not appear to me that either party’s recreational interests have been outside the normal ebb and flow of a relationship, nor significant enough to result in finding that this in some way meant that the assessment of the husband or wife’s contribution to the overall assets of the parties ought to be reduced (see, for example, the comments in De Angelis and De Angelis (2003) FLC ¶93-133 at [74] and following, where the court briefly discussed the need to determine whether the expenditure was such as to treat it as a wastage of assets or negative contribution).
A similar argument was advanced by the husband as to “negative contributions” or waste was raised with respect to the losses flowing from the wife’s business. I do not accept that “negative contributions” is a concept accessible under Section 79. However, wastage is a recognisable concept. Before me, counsel for the husband argued that the wife’s business losses amounted to wastage. The wife argued that the business losses should not be taken into account in determining the asset pool.
I agree with the comments of Baker J, in Kowaliw and Kowaliw (1981) FLC ¶91-092 at 76,645 as follows:
“If a party has acted in the manner to which I have referred earlier either by:
(a) embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value,
then such conduct in my view and the economic consequences which flow therefrom are clearly matters to which the Court may have regard pursuant to the provisions of sec. 75(2)(o)”.
If, on the other hand, losses of a financial kind have been suffered by the parties to a marriage in the course of the pursuit of matrimonial objectives, such as the gaining of income or the acquisition of assets whether the liability for such losses be joint or several then, in my view, such losses should be shared by the parties (although not necessarily equally) and taken into account when altering property interests.'
I am satisfied that the wife’s business venture with her father was a genuine attempt to earn income for the family. She had some experience in the industry. There is nothing to indicate that the venture was reckless or wanton. I reject the husband’s submissions in this regard.
In considering indirect contributions I have regard to the comments of the court in Ferraro & Ferraro (1993) FLC ¶92-335:
"The task of evaluating and comparing the parties’ respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a “level playing field”. Firstly, it involves making a crucial comparison between fundamentally different activities, and a comparison between contributions to property and contributions to the welfare of the family. Secondly, whilst a breadwinner contribution can be objectively assessed by reference to such things as that party’s employment record, income and the value of the assets acquired, an assessment of the quality of a homemaker contribution to the family is vulnerable to subjective value judgments as to what constitutes a competent homemaker and parent and cannot be readily equated to the value of assets acquired. This leads to a tendency to undervalue the homemaker role."
In this case, whilst the wife has worked for various periods throughout the relationship, I am satisfied that the wife was the primary homemaker. I find that she provided considerable support which would have been necessary for the husband to work as a police officer.
I also accept that the husband also contributed as a homemaker and parent around the home, as his hours of employment and state of health enabled him to do. I take into account the extent to which the husband assisted the wife in the discharge of her obligation to care for her two older children Christopher and Clifford, in the context of the section 75(2) factors.
The husband also worked on renovations of and around the home. Although there as no evidence of the extent to which the value of the home was enhanced as a result of the renovations, I accept that the effect of that work improved the value of the home.
The husband’s mental state deteriorated during the relationship. This impacted significantly upon his capacity for employment, leading to him ceasing work and receiving a disability pension.
The husband and wife are at odds with respect to the contributions of the husband around the time that he ceased working and thereafter. The wife says that this was a difficult period. She sets out a summary of the events that occurred at this time in paragraphs 70 to 86 of the affidavit. The husband was suffering anxiety, depression and stress, and would be happy and energetic for short periods and then depressed for lengthy periods. He commenced tasks and did not complete them. I accept the wife's evidence on this point.
The wife, in her affidavit material sets out some of the behaviours of the husband which, with the benefit of hindsight, appear to be linked to his illness:
70. Alan has been diagnosed with anxiety, depression and stress and has been medically retired from the Police Force.
71. From the time Chanel was born I began to notice Alan’s mood swings became wider and more frequent. Alan would be happy and energetic for short periods of time and then very depressed and tired a lot of the time.
72. During this time he tired working 12 hour shifts in the cells but his mood swings got even worse. He was tired and slept more. At the same time he embarked upon renovations to our home. These renovations were not completed and the house fell into disrepair. There were leaks to the roof, lights hanging from the ceiling, tiles not glued to the floor and rooms not painted.
73. I recall the first time I became aware Alan had a psychiatric problem was in or about 1995. I came home from work one day and found Alan at home, sobbing. He said to me:
“I can’t take it anymore”
74. Alan then went and saw Dr Witt. He started taking a lot of sick leave from work. He was referred to Dr D Whitehead, a psychiatrist in Lismore and then to another psychiatrist in Bangalow.
75. Sometime later he was placed on anti-depressant medication which seemed to make him even more moody and difficult to copy with.
76. Alan was off work and/or trying a return to work program for approximately five years (1996-2001).
77. During these five years the mood swings were worse. When Alan was particularly depressed he would not get out of bed.
78. It seemed Alan would get on a high when planning things, whether that be a holiday or renovations to the house or buying a new car, a racing bike, gym equipment or flying lessons. He would spend a lot of time planning, gathering information and prices and then embark upon the purchase by borrowing on the equity in the home or personal loans from the Police Credit Union. He would usually badger me until I agreed to the purchase of the item. Once the item was purchased he would loose interest in it. (sic)
79. Alan found it increasingly difficult to go back to work at the Lismore Police Station. He could not even look at the Police uniform.
80. Alan liked to restore cars and he would buy them, do a little bit of restoration work on them and then sell them unfinished and not restored. At one point in time we had one MG, one old caravan that he started restoring then wanted to turn into a river boat, that could be towed like a caravan. Alan eventually lost interest in this project and left he caravan lying around the yard. Later is was broken down and used as flooring in the garden shed. Alan also had a jeep that was never finished.
81. Eventually Alan had a complete breakdown. He could not remember where he left the car. He rang me at work and said he had lost the car. After this day, he came home and from that day stayed in bed all the time. He was not capable of even attending to the most basic of parenting functions around the home. I was working to supplement our income. Christopher was assisting with the two younger children to a very significant degree, cooking meals and bathing them.
82. Alan was eventually medically retired from the Police Force in August 2001.
83. During the final year of our marriage Alan purchased a television, video player, washing machine and freezer on hire purchase. Alan did not consult me regarding these purchases and I came home to find these new things in the house. These impromptu purchases were heavily straining our finances even further at the time.
84. Alan purchased a bull, which as far as I am aware is held at his father’s property.
85. Alan purchased an old caravan which he wanted to turn into a river boat. He spent a lot of time and money on it and then left it laying round the yard.
86. Alan started a project of building gun safes. He spent a lot of money on materials to build the safes. When he sold the safes he did not contribute any of the money to the household expenses.

I was left to meet all the expenses in relation to the children including school fees, medical bills, dental expenses, medicines, ballet, drama fees, clothing…
88. The loss of our child Thomas, considerably affected Alan’s mental state. He would not let it go and we moved to Urbenville to get out of the house and try to get over it. We had several good years at Urbenville and then moved back to Lismore for Christopher to start High School. Alan’s behaviour and temperament changed. He was irritable most of the time and picked on the children more. He was showing signs of being depressed and wanted to be in bed all the time. We returned from Urbenville in early 1994. Chanel was 5 months old.
89. Alan was always very hard on Christopher and Clifford. Clifford was a quite sickly child and was often in a lot of pain. Alan was prone to outbursts of anger and would hit him, usually belt him with his hand or a belt, across his backside and legs. On two occasions, he left bruises on him. Clifford had hyperspadias and underwent 14 operations in total to correct this problem. This naturally required me to give him more attention and also made Clifford a more demanding child. Alan was always jealous of the attention the children received. Clifford would often by crying or whingeing. Clifford had sight problems and is an asthmatic.
90. Alan would start an argument with me and he would then yell and swear and would lash out physically and verbally at Clifford. Clifford was 8 or 9 years old and very vulnerable. Alan would be very strict and specific with his instructions to Clifford and would not talk to him in a kind and caring matter. I was extremely concerned about the way he was treating him and when I would try to speak with him about his treatment of Clifford and try and stop him from hitting Clifford about the ears, he would say to me words to the effect:
“Shut up and mind your own business, I’ll do what I like.”
91. When Clifford was about three or four years of age Alan beat him with his hand and left bruises on his bottom, thighs and legs. This was the first time I had seen Alan be so physically aggressive with the children.
92. When Clifford was 7 years of age Alan hit him with a belt because he had hidden a pet chicken that had died.
93. On another occasion when Clifford was about 10 years of age I noticed Clifford was very bruised on his outer hip and thigh when I was checking on him whilst he was having a bath. I asked him what happened and he said to me words to the effect:
“Daddy smacked me.”
The previous evening I had been at work and Alan had been caring for the children. I then confronted Alan about this and said to him:
“I want to know what happened to warrant such a hiding.”
He replied,
“He was playing up in the bath.”
I then told him not to do something like that again and if he did I would leave him.
94. As Clifford grew older the physical abuse worsened as Clifford started back chatting him. Alan would strike him on occasions with blows to the side of the head. Alan was careful not to leave any bruises on Clifford when he would do this.
95. In 1999 Alan built Clifford a room in the house by enclosing part of the garage. It was a very cold room and there was not enough money for carpet so my mother purchased carpet for the room. As Clifford got older he often left his room in an untidy state. One day Alan just dismantled the room and moved Clifford’s belongings out whilst Clifford was at School. Alan had little regard for the effect this action may have Clifford.
96. Alan’s relationship with Alex is quite strong. Alex is attached to him and enjoys a close relationship with his father. I am concerned, however, that the nature of the attachment is not healthy for Alex’s emotional well being.
97. Alan doted on Alex but was mean to Chanel. I can recall him calling her “a little bitch”, when during a meal time she knocked something over. Alan would physically discipline Chanel regularly with smacks to her backside and legs.
98. As a result of his treatment of her, Chanel did not have much to do with her Father.
99. As this behaviour by Alan continued over a period of time, Christopher, Clifford, Chanel and I became afraid and wary of his moods and anger.

The husband’s health is the subject of a report by Associate Professor Quadrio, a consultant psychiatrist. Associate Professor Quadrio recounts that from about 1997 onwards the husband was involved in a couple of major incidents which had a huge impact upon him. She sets out that “he got up one morning and ‘and just couldn't go on’ and was feeling 'teary'". Before this there had been stresses involved in the husband's work where he had been undertaking 12 hour shifts from 6.00 p.m. until 6.00 a.m. sleeping in the daytime. The husband commenced to take time off on sick leave in February 1999: he attempted to return to work in May 1999 and went reasonably well for about 12 months.
The husband recounted to associate Professor Quadrio that “when [he] went off sick in 1999 it put ‘quite a bit of pressure’ on the marriage so he suggested that he and his wife, Kim, have a holiday overseas”. It appears that this holiday did not go particularly well.
Since April 2000 the husband has not worked. Associate Professor Quadrio took the view that the husband didn't take much pleasure in having time to himself. The husband continues to take antidepressant medication which he has tried to decrease but finds that he gets very edgy without medication. Associate Professor Quadrio reports that the husband recounted that “he can't stick to anything”, his memory is terrible, if he tries to do something at home he just can't keep a sequence of ideas in his head, that he feels muddled in his thinking at times. Associate Professor Quadrio noticed that the husband was very laboured in his thought processes. She also noted that the husband was not falling asleep until midnight and was waking several times. She noted that the husband is nervous and jittery at home especially when he's on his own, that he doesn't have much pleasure in anything and has no motivation.
Associate Professor Quadrio diagnosed the husband as suffering a chronic depressive disorder. He has also had marked symptoms of anxiety including panic attacks. Whilst the husband ‘has made improvement over the past two years he continues to have severe depressive symptoms, marked insomnia, forgetfulness, difficulty concentrating, focusing, loss of interest, motivation and pleasure in things.’ I note that the husband has been incapacitated to an increasingly significant degree since 1997 or 1998, ultimately taking sick leave from work for various periods form February 1999 through to his medical discharge in August 2001.
Associate Professor Quadrio concluded that the husband ‘is not employable as he would not have the capacity to focus on the task’ and that as he has been unable ‘to rehabilitate himself over a period of five years with reasonable treatment and psychological intervention is unlikely that he will progress much further.’
The husband's condition is clearly quite severe. He has ceased work and receives the pension under the superannuation scheme guidelines rather than continuing to work and maintain a normal family life.
I find that the husband’s non-financial contributions were not as great as the husband would have them. I prefer the evidence of the wife on this issue. I accept that during this period the wife has made greater contributions to family life, to the benefit of the parties and the children in difficult circumstances.

Contributions after separation

From the date of separation on 5 Jul 2000 until trial the husband has had the benefit of occupation of the former matrimonial home. However, the husband has continued to meet the mortgage payments on the home together with the rates and other incidental outgoings. The mortgage repayments and are around $150.00 per week. The husband continued to receive the totality of the superannuation pension, save for child support payments to the wife (which he unilaterally ceased but later resumed at one stage leading up to the trial).
After separation the wife was paying rent of $180.00 per week until December 2003 when she moved in with her grandfather. At present she doesn't pay rent but continues to pay water, electricity, and telephone bills. Following separation the children spent Thursday to Sunday with the husband and half school holidays, which was altered to six nights per fortnight by consent order in December 2003.
The husband has had the use of the former matrimonial home, which has provided him with considerable security and some financial savings. He has also had the full value of the superannuation pension since separation whilst the wife has been on a minimal income. During the period from separation until trial the wife had a larger amount of time with the children in her care, increasing the financial burden of the children upon her compared to the husband.

Contributions

Considering the matter as a whole I am satisfied that the contributions of the parties at the commencement of the relationship, during the relationship and since separation have been different at different times, both financial and non-financial, direct and indirect to the acquisition, conservation and improvement of the property of the parties, or either of them. Similarly, the contribution of each of the parties in the capacity of home maker and parent has been significant, although for reasons I have set out above, I find that the wife’s contributions in this regard are greater than those of the husband in this regard
Of course, there is no easy or obvious mathematical method of assessing and balancing all of the differing contributions of the parties. However, I have regard to the wife’s significant initial contribution by way of her pre-marital interest in real property and her contribution as a homemaker and parent both of which I find require a recognition in favour of the wife on the assessment of contributions.
Having regard to all of the contribution issues as specified in s 79(4) of the Act, I assess the overall contributions of the wife as being greater than the husband in the proportion of 55/45 in favour of the wife.

Section 79(4)(d) to (g)

I now turn to specifically consider the factors relevant to the third step in the process of apportioning the assets available for distribution between the parties.

Section 79(4)(d) The effect of any proposed order upon the earning capacity of either party to the marriage

The orders that I propose making in this matter will not affect the earning capacity of either party to these proceedings, however earning capacity is a central issue in this case. I will deal with this issue below.

Section 79(4)(e) The matters referred to in sub-section 75(2) so far as they are relevant

a) The age and state of health of each of the parties

The husband is 45 years of age. The wife is 42 years of age. The husband is no longer able to work and unlikely to engage in gainful employment or income earning in the future. My assessment of the evidence in relation to the husband’s medical condition and capacity for employment in the future is fully set out in the context of the assessment of contributions above.
The wife is in reasonably good health although starting to have some complaints when lifting or carrying for extended periods.
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 a ‘nil’ income from personal exertion.
The wife will be able to continue to work in the future as a waitress or kitchen hand in the hospitality industry. I accept that the wife has an earning capacity of approximately $20,000.00 per annum. She is in reasonable health and currently working on a full time basis in the work force. I have no reason to believe that she will not be able to be employed in the foreseeable future. However, given the nature of the industry in which she works and the type of employment role she has it is not unrealistic to expect that she will be unlikely to continue working beyond the time when the husband attains 60 years, nor is it likely that she would still be engaged in full time work by then.
The wife says that she expects to work around 35 hours per week and earning $350.00 to $400.00 per week in the future. This will begin once she is able to close down ‘Hector's Place’ which she is operating with her father. Counsel for the wife submitted that the income of the parties could be equalised by splitting the pension payments payable between now in the proportions of 25% of the wife and 75% of the husband. This, coupled with the wife’s earning capacity would place the parties in roughly equal financial positions with respect to income. I accept that submission.
I do not accept that it is reasonable to expect the wife to work more than 35 hours per week having regard to her age, responsibility for children, and the industry in which she is working. Nor do I accept that it would be reasonable to expect her earnings to be greater than that suggested, given her background and experience, and the type of industry in which she will be working. Rather, I expect that her earnings will probably reduce over the forthcoming years. I make these conclusions bearing in mind my observations of the wife in the witness box.
There is therefore a significant disparity in income and earning capacity of the parties into the future and that disparity is a factor which I find should be recognised by some allowance being made in favour of the husband
c)Whether either party has the care or control of a child of the marriage who has not obtained the age of 18 years
The parties have now agreed on shared care, no doubt having regard to the strong recommendations in the family report. The husband has been assessed to pay child support to the wife, although he ceased making payments in December 2003 only to resume in March 2004. He is repaying the arrears at the rate of $20.00 per month. I accept that this imposed a significant additional financial burden upon the wife at a difficult time, although ultimately (over a very long time). He will receive payment of that child support.
The responsibility for the children will now be shared substantially equally by the parties.
d)Commitments of each of the parties that are necessary to enable the parties to support:
(i)himself or herself;
(ii) 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;
The wife has an ongoing responsibility to her adult children who are completing their education and training. However this does not involve significant expense.
f)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 any other 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;
In this case I propose to deal with the husband's superannuation pension as an asset of the parties for division, and therefore it is not appropriate to make a further adjustment under section 75(2)(f) in this regard. The parties will have substantially similar entitlements to social security pensions.
g)Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There can be no doubt that the wife has suffered a significant deterioration in her standard of living since the parties separated. She was renting for a period and is now living with her grandfather. However, the realities are that neither party will be able to maintain the standard of living that had when the parties were together once they assets of the parties are split. Both of the parties have similar needs in this regard.
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;
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;
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;
This is not a case where either party makes application in respect of spousal maintenance.
l)The need to protect a party who wishes to continue that party’s role as a parent;
As a result of financial necessity, the wife has returned to the work force sometime ago. Once again, given the length of the marriage and the circumstances, I do not believe that this is a significant consideration.
m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
Neither party is cohabiting with another person nor is it likely in the foreseeable future that this situation will change.
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;
To the extent that child support is payable by one party to the other this is simply a reflection of the differential in the income and a time when there were substantially sharing the care of the children. This is not a factor, which in the context of this case leads me to the view that a further adjustment with respect to property would be warranted.
o)Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
At the commencement of the relationship, the wife had two children, Christopher aged 22 years and Clifford aged 19 years Although some child support was received for the children it clearly was not enough to fully support them. The husband was involved in the day-to-day care of Christopher and Clifford. Associate Professor Quadrio recounts in her report that "slowly over time [the husband] came to regard [the stepchildren] as his own children."
I accept that the husband participated in the financial support of Christopher and Clifford. Whilst the husband participated in the emotional support of the children it appears clear that this was not always an entirely positive participation by the husband.
As was discussed by the Full Court, comprising Lindenmayer, Finn and Joske JJ in Robb & Robb (1995) FLC ¶92-555, the correct approach to be adopted by a Court where the husband (on the facts of this case) has made contributions to the wife’s children is for account to be taken thereof under s.75(2)(o). The Full Court further considered the appropriateness of having regard to contributions made by the wife to her own children pursuant to her legal duty to so maintain them.
The Full Court said (at 81,547):
This raises the question whether the fact that a party to a marriage contributes during that marriage to the welfare of his or her own children of a prior marriage is a fact or circumstance which the justice of the case requires to be taken into account in that party's favour, at least, in circumstances where the other party's contribution to that welfare has been taken into account as a fact or circumstance in that party's favour.
In considering whether the justice of a case requires some act done by a party to be taken into account under s. 75(2)(o), the Court should, we think, have regard primarily to the existence or otherwise of any legal obligations, as between the parties, in relation to the doing of that act, and also, perhaps, to ordinary notions of justice and equity between the parties.
The Full Court continued (at 81,587):
Accordingly, in contributing to the support of these children the wife was merely honouring a legal obligation which she owed to the children, whilst the husband, in making his contribution, was acting essentially as a volunteer assisting the wife in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the husband's contribution to be taken into account under s. 75(2)(o), the same cannot be said of the wife's contribution. In making that contribution the wife was in no way discharging or assisting to discharge any legal obligation of the husband.
Turning, then, to ordinary notions of justice and equity, we are of the view that such notions do not call for any allowance to be made in the wife's favour, in the property proceedings between the husband and wife, because she honoured her legal obligation to maintain her own children of a prior marriage. We believe that a failure to make such an allowance would not offend the ordinary reasonable man or woman's notions of justice.
Accordingly I have evaluated the husband’s contribution made to Christopher and Clifford under section 75(2)(o) and I find that this factor gives rise to a further adjustment being made in favour of the husband.
I also take into account as a factor in favour of the wife that the costs of obtaining insurance on the husband’s life (for the reasons set out below at paragraphs ‎116 to ‎118). It was agreed by the parties that the present day cost of insuring the husband’s life for $400,000.00 to age 60 would be $36,359.00. If one half of the husband’s lump sum and ¼ of the pension were insured, this would require insurance of around $78,916.00 and $225,861.00 – a total of around $304,777.00. The insurance costs would therefore be around $27,000.00. One half of this around $13,000.00. I take this into account as a factor in favour of the wife, in that she must incur this expense, or effectively take the risk by self insuring.

79(4)(f) Any other order made under this Act affecting a party to the marriage or a child of the marriage

There are no other orders made under the Family Law Act 1975 which affect a party or the child which needs to be taken into account, save for the parenting orders which will be made in this matter and which will result in the children continuing in the shared care of the parties. A situation that has come about with the consent of each of the parties.

79(4)(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

These provisions have been considered in relation to section 75(2)(na) above.

Summary

The most significant factor to be taken into account in respect of the ‘other factors’ is the differences in earning capacity of the parties in the future.
I have identified that the pool of assets of the parties is around $948,340.00. The contributions of the parties are not equal.
The future needs of the husband are substantially greater having regard to his lower earning capacity. I also have regard to the support that the husband provided for the step children and the costs of insurance that will be incurred by the wife if she is to protect her interest in the pension. In this regard an increase in the husband’s entitlement of 15% is appropriate.
This means that the husband is entitled to a 60/40 split in his favour.

What split would be ‘just and equitable’

Counsel for the wife suggested that the husband receive 75% of the superannuation pension until the husband attains 60 years of age, in order to substantially equalise the day-to-day income of the parties. With respect to the other assets of the parties she suggested a 50/50 split of the total value of the home and commuted lump sum available when the husband attains 60, by way of allowing the wife the equity in the home and around 37% of the commuted lump sum. On my calculations this would result in an ultimate split of around 61/39 in favour of the husband.

Counsel for the husband suggested that the parties split the equity in the home equally and that the wife receive 20% of any commuted lump sum when the husband attains 60. This results in a split of around 83/17 in favour of the husband. Such an outcome could not be considered just and equitable in the circumstances of the case.
My concerns with regard to the submissions of the counsel for the wife are that they result in the husband having no assets at present. In Allen and Allen (Unrep, Chisholm J, 23 Jan 04, Sydney) Chisholm J considered this issue saying:
99. Firstly, I think it is appropriate that the Court should accept that the figure that emerges from applying the regulations that have been laid down for the valuation [Section 90MT(2), (2A)] of superannuation interests should be treated as the best indicator of the actual value of the interest. While in cases where no splitting order is sought valuation under the regulations is not mandatory, it is obviously an appropriate basis, and in this case the only valuation evidence is of this kind. It would be wrong, in my view, for the Court to draw up a list of assets which includes the superannuation asset with a value calculated according to the regulations but then, at a later stage of the judgment, in effect say that this is not the real value at all, and that the Court should make orders that give effect to the real value of the superannuation interests.
100. On the other hand, there may be particular circumstances in a case which make it appropriate, when the Court comes to consider what orders are just and equitable (stage 4) to divide the assets in a way that departs from the percentage division reached as a result of the application of the first two or three stages.
101. It may be that such a departure, in cases where it is justified, would form part of stage 3, arising under s 75(2)(o). But, the question whether some matter should be dealt with in the third stage or the fourth stage is probably more a question of presentation than of substance. The important thing is that the relevant matters need to be carefully considered before the Court reaches a conclusion on what orders to make. Perhaps the real value of the fourth stage is to emphasise that the Court should stand back and give consideration to the practical impact of the orders it proposes to make, lest it lose sight of the bigger picture when considering percentages and particulars.
102. Turning, then, to the circumstances of the present case, it is true that the husband’s superannuation interest is of a different nature to that of the wife. Her interest is, in effect, money sitting in the bank, while his is a pension for life. I imagine that circumstances could arise where one or other is more advantageous. For example, if both parties live quite a short time, it might be said that the wife’s lump sum would be more use to her during the short remainder of her life than the husband’s pension would be to him. On the other hand, if both parties were to live for a long time, it might be argued that the husband would receive a greater benefit from his continuing pension than the wife would have from her lump sum. Perhaps other variables could be imagined, such as changes in interest rates or other financial changes, which might operate to make one form of interest more attractive than the other. The figure given for the capitalised value of the husband’s pension represents, as I understand it, the outcome of a formula designed to take into account the person’s life expectancy, and is thus a valuation based on the best available prediction of the future. There was no evidence or submission to show that there was anything inappropriate about the application of the valuation formula in the present case.
102. Although it is obvious that the husband’s and wife’s interests are different, I do not think there is any particular evidence in this case to show that the husband is disadvantaged in relation to the wife by having his interest in the form of a life pension. As I have attempted to show, I do not think it can be said either in general or in this case that one form of interest is inherently better or worse than the other.
103. In those circumstances, I am not persuaded that there should be an adjustment in the husband’s favour because of the nature of his interest.
One of the difficulties presented by the unusual nature of the assets in this case is that a split that leaves the husband with only his pension interest (or part thereof) and now presently available capital. It would not be just and equitable to leave the husband without capital now, nor to leave him in a significantly better or worse position than the wife when he attains 60.
The matter was the subject of further submissions long after the trial on the issue of how to split the assets. It is clear that under the particular superannuation scheme, even if a splitting order is made, the wife would be without real security as the payments of the pension cease on the husband’s death. Thus, the wife’s interests pursuant to any splitting order are contingent upon the husband’s life. This is a powerful argument in favour of providing the wife with the majority of the presently available assets.
It appears to me that a split involving such risk to the wife would be unjust to the husband as he would be left without presently available assets. It is also clear that a simple solution is for the husband to comply with reasonable requests by the wife to allow her to insure his life for an appropriate sum. The parties have provided some evidence of the approximate cost of such insurance.
The need for insurance arises through no fault of either party, but is simply an incident of the nature of the pension scheme. The same risk applies to the husband, however he has no need for insurance in this regard as his needs would also cease on his demise. It is therefore appropriate that the cost of the wife effecting that insurance be notionally shared equally.
I also note that the wife will obtain some extra superannuation as a result of her employment until retirement that must also be taken into account. On the material available it is impossible to determine these figures with precision. I am satisfied that it is appropriate to make no further adjustment with respect to these two contingencies which run for and against the wife.
I have taken into account the evidence before me, the agreed facts and the findings I have made in relation to matters not agreed between the parties. I am mindful of the comments of the Full Court in Danielian & Danielian [1999] FamCA 473 (unreported) that:
… it is important to remember, as was pointed out by Ellis, Strauss and Lindenmayer JJ in Harris (1991) FLC ¶92-254; (1991) 15 Fam LR 26, and by Fogarty and Finn JJ in Beneke (1996) FLC ¶92-698; (1996) 20 Fam LR 841, the task of the court in proceedings under s 79 is not akin to an accounting exercise. The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s 79 principles.
In the circumstances of this case, I find that it is just and equitable for the alteration of property interests to be 60/40 in favour of the husband.
I find that it is just and equitable that the alteration of property interests be effected by the parties:
a)Sharing equally in any superannuation of the husband once commuted at age 60.
b)Sharing in the pension in the proportions of 75/25 in favour of the husband as suggested by the counsel for the wife, as this roughly equalises their income now, although leaves the wife in a position where her income is likely to decrease and the husbands will continue to increase by CPI.
c)Adjusting their interests in the other assets to reflect an overall split of 60/40 in favour of the husband. I calculate that this requires a payment of $67,261.00 to the husband by the wife if she retains the matrimonial home, or alternatively a payment of $93,034.00 by the husband to the wife if he retains the matrimonial home.
Orders that effectively split the superannuation interest twice (now with respect to the pension, and in the future with respect to the lump sum) were proposed to the trustee who advised that there was no objection to orders to this effect. It appears to me that a splitting order requiring the wife to receive 25% of the payments made from a date 14 days after judgement, and an order splitting 1/3 of the husband’s remaining interest in favour of the wife, on his attaining 60 years together with an order requiring him to commute the pension at age 60 will achieve this purpose.
Both parties desire to retain the matrimonial home. The husband’s desire appears to have arisen only recently as it does not appear on his material. It is more realistic for the wife to pay out the husband, as she has the lesser sum to borrow.
I propose making an order that wife retain the matrimonial home and pay out the husband within 90 days. If the wife is unable to finance this then the husband will have the option of paying out the wife $93,034.00 within 60 days of being advised by the wife that she cannot pay out the husband’s interests or the expiration of 90 days (whichever first occurs). If the property is to be sold, then the parties should receive the net proceeds of sale in the proportion of 42% to the wife and 58% to the husband.

I certify that the preceding one hundred and twenty-five (125) paragraphs are a true copy of the reasons for judgment of Mr Riethmuller FM

Associate:

Date: