Carbonne and Carbonne

[2018] FamCA 550

FAMILY COURT OF AUSTRALIA

CARBONNE & CARBONNE [2018] FamCA 550

FAMILY LAW – PROPERTY – Alteration of property interests – Where matter proceeded on an undefended basis – Where mother has sole care of the children – Where father does not financially contribute to children – Where the main asset is the parties’ self-managed superannuation fund – Just and equitable division – Where a splitting order is made in favour of the wife.

Family Law Act 1975 (Cth) s 75, 79

Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Mr Carbonne

RESPONDENT: Ms Carbonne

FILE NUMBER: TVC 46 of 2009

DATE DELIVERED: 24 July 2018

PLACE DELIVERED: Townsville

PLACE HEARD: Cairns

JUDGMENT OF: Tree J

HEARING DATE: 20 June 2018

REPRESENTATION

THE APPLICANT: No appearance

SOLICITOR FOR THE RESPONDENT: Ms Everett

Orders

1. That within thirty (30) days of the date of this Order the Applicant’s interest in the German motor vehicle be transferred to the Respondent provided that:-

   (a)The Respondent shall indemnify the Applicant against all monies owing with respect to the German motor vehicle to National Australia Bank by way of the lease secured over the said vehicle.

2. That within seven (7) days of the date of these Orders the parties in their capacities as the Trustees for the Carbonne Superannuation Fund will do all such acts and things necessary to:-

   (a)Engage C Accountants to prepare the 2018 tax return for the self-managed superfund.

   (b)To instruct C Accountants to pay existing tax liabilities for the Carbonne Superannuation Fund from the funds presently held with the National Australia Bank account BSB: … Account no: …01.

   (c)To pay any outstanding accounting fees owing to C Accountants for the preparation of the previous tax returns for the Carbonne Superannuation Fund from the funds presently held with the National Australia Bank account BSB: … Account no: …01.

   (d)To pay C Accountants any fees relating to the preparation of the 2018 tax return for the Carbonne Superannuation Fund from the funds presently held with the National Australia Bank account BSB: … Account no: …01.

   (e)To pay any tax liability arising from the preparation of the 2018 Carbonne Superannuation Fund tax return from the funds presently held with the National Australia Bank account BSB: … Account no: …01.

   (f)To instruct C Accountants that subject to Order 7 hereof to wind up the Carbonne Superannuation Fund.

   (g)That the parties will do all such things and sign all necessary documents to declare that the Carbonne Superannuation Fund is a compliant superannuation fund as at the date of these Orders.

3. That upon the payment of all of the tax liabilities and accounting fees referred to in paragraph 6 hereof, the remaining funds held to the account of the Carbonne Superannuation Fund, at the point of winding up, shall be divided as follows:-

   (a)That pursuant to Section 90MT(1)(b) of the Family Law Act 1975 whenever a splittable payment becomes payable to the Wife in respect of her interest in the Carbonne Superannuation Fund, the Husband is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 such that 20 per cent of the Wife’s entitlement be rolled over into a compliant superannuation fund nominated by the Husband.

   (b)That pursuant to Section 90MT(1)(b) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the Husband’s interest in the Carbonne Superannuation Fund, that the Wife be entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 such that 80 per cent of the Husband’s entitlement in the fund shall be allocated to a compliant superannuation fund nominated by the Wife.

   (c)That after the operation of 3(a) and 3(b) hereof, that the balance of the Wife’s entitlements under the Carbonne Superannuation Fund shall be rolled over into a compliant superannuation fund as nominated by the Wife.

   (d)That the balance of the Husband’s superannuation entitlements in the Carbonne Superannuation Fund shall be rolled over into a compliant superannuation fund nominated by the Husband.

   (e)That upon the completion of the superannuation splitting orders contained herein and the rollover of the balance of the parties’ entitlements in the fund pursuant to these Orders, the parties in their capacity as Trustees of the fund shall do all acts and things necessary to wind up the Carbonne Superannuation Fund.

4. That the parties in their capacities as the trustees of the Carbonne Superannuation Fund acknowledge that they have been afforded procedural fairness in the making of these Orders.

5. This Order binds each of the parties in their capacity as a trustee of the Carbonne Superannuation Fund.

6. That unless otherwise specified in these orders and except for the purpose of forcing the payment of any monies due under these orders:-

   (a)Each party be solely entitled to the exclusion of the other to all property in the possession of such party as at the date of these orders;

   (b)Monies standing to the credit of either party in any separate bank account is to remain their own separate property;

   (c)Each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other;

   (d)All insurance policies to become the sole property of the beneficiary named thereunder; and

   (e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

7. That these orders are binding on the parties’ heirs, executors and assigns.

8. That each party have liberty to apply back to the court in relation to the terms of these orders upon the giving of seven days’ notice to the other party.

9. In the event that either party fails, refuses or neglects to execute (within ten (10) days of a request to do so) any documents or do anything necessary to give effect to the terms of these orders, then pursuant to section 106A of the Family Law Act 1975 as amended:-

   (a)The Registrar of the Family Court of Australia at Townsville shall be and is hereby appointed to execute any deed or instrument in the name of the defaulting party and to do all such acts and things necessary to give validity to the operation of the deed or instrument and to give validity and operation to these orders; and

   (b)The affidavit of the solicitor for the party seeking to give effect to these orders shall be sufficient proof of the default of the other party.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Carbonne & Carbonne has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CAIRNS

FILE NUMBER: TVC 46 of 2009

Ms Carbonne

Applicant

And

Mr Carbonne

Respondent

REASONS FOR JUDGMENT

Introduction

1. This proceeding seeks a division of the parties’ matrimonial property. Although when they were commenced in June 2013, Mr Carbonne (“the husband”) was the moving party, by notice filed 13 November 2017, he discontinued all extant applications, both in relation to property and parenting. Then on 29 May 2018, Ms Carbonne (“the wife”) also filed a Notice of Discontinuance, albeit only in relation to parenting proceedings. That left on foot her application for the division of the parties’ property, and although given his having filed a Notice of Discountenance, it was anticipated that the husband would remain disengaged from the proceedings, in fact he thereafter re-engaged, and appeared when the matter was listed for an undefended hearing before me on 6 June 2018.

2. By then he had filed an affidavit, and indicated that he was not merely going to oppose the orders which the wife sought, but to seek competing orders in his favour. The matter was then set down for hearing on the 20 June 2018, however on that occasion the husband did not appear and the matter proceeded in his absence. I reserved my decision, and since then, no application to reopen the matter has been filed by the husband.

3. This is my decision arising from the hearing of 20 June 2018, and the reasons for it.

BACKGROUND FACTS

1. The mother was born in 1970, and hence is presently 47 years of age. The father as born in 1972, and hence is presently 46 years of age. The parties commenced living together on the 24 May 2002, and married in 2004. Two children were born to the relationship; the oldest is D, born in 2003 and hence presently 15 years of age, and the youngest is E, born in 2005, and hence presently 12 years of age. The parties separated on 7 June 2013, and hence the relationship spanned a little over 11 years.

2. On 24 February 2017, the husband was declared bankrupt, and accordingly all his property vested in his trustee, although any superannuation is a protected asset, and hence did not vest.  The trustee has not sought to stay these proceedings, or intervene in them.

RELEVANT LEGAL PRINCIPLES

1. Section 79 of the Family Law Act deals with the division of property of parties to a marriage which has broken down. It has long been established that the preferred approach to be adopted to determining property disputes under s 79 is a four step one which involves:

   ·The identification of the property of the parties including their assets, financial resources and liabilities;

   ·The evaluation of the “contributions” or s 79(4)(a), (b) and (c) issues;

   ·The evaluation of the matters referred to in s 79(4)(d), (e), (f) and (g) including, by reference to s 79(4)(e) the matters set out in s 75(2); and

   ·A determination as to whether the result is just and equitable by reference to s 79(2) of the Act.

2. After the High Court’s decision in Stanford v Stanford[1] it may be taken as commonly accepted that the first step requires the identification of the parties existing legal and equitable interests in property, and thereafter, it is incumbent upon the court at the outset to determine whether or not it is just and equitable to make an order altering the interests of the parties in that property.  However as the High Court itself indicated in Stanford, in many cases that step will be uncontroversial; for instance, if there is jointly owned property which is impracticable for the parties to jointly enjoy consequent upon separation, such as a former matrimonial home.

   [1](2012) 247 CLR 108.

IDENTIFICATION OF PROPERTY AVAILABLE FOR DIVISION

1. There is no dispute as to the identity of the property left available for division, which principally comprises a German motor vehicle in the wife’s possession, and $12,000 worth of household contents and jewellery, also in her possession. The wife says that the total value of those items is $54,550, against which however there are liabilities, which she says in her most recent financial statement total $47,400.

2. As I understand it, the husband, when he was engaged in these proceedings, accepted that the liability attaching to the motor vehicle likely equalled or exceeded its value, and on that basis in his affidavit filed 25 May 2018 agreed that there should be an order transferring his interest in that motor vehicle to the wife, so long as she indemnified him against all monies owing in relation to the vehicle.  (Of course, given he is bankrupt, he no longer has any interest in property, as any interest he may have had has vested in his trustee).

3. That affidavit did not traverse the wife’s attributed values to other chattels and liabilities, and I accept them.

4. The only other asset of substance is the parties’ self-managed superannuation fund, the assets of which are simply cash invested in bank accounts. The total value of those funds as at the date of hearing before me was said to be in the order of $150,000.00, and I accept that evidence. According to the most recent member statement, the husband’s preserved entitlement to that fund was $65,779.11, whereas the wife’s was $83,919.00. That translates to the husband’s interest being in the order of 44 per cent, and the wife’s interest in the order of 66 per cent.

PARTIES CONTRIBUTION TO ASSETS BOTH FINANCIAL AND NON-FINANCIAL

1. There is little evidence before me as to the parties’ contributions to the assets which they accumulated during the course of the relationship, however I am satisfied that the parties contribution to the only asset left in dispute, namely the superannuation, is as calculated by the accountants, namely 44 per cent to the husband and 66 per cent to the wife.

2. Further, I am satisfied that, if there be any equity in the motor vehicle, which is not contended by the husband, then because the wife has made all of the repayments to the vehicle post separation, inevitably she has wholly contributed to any such equity.

SECTION 79(4)(c), (d), (e), (f) and (g) MATTERS

1. I am satisfied that, up to the point of separation, the parties likely equally contributed to the welfare of the family in a broad sense.  However post separation, the father has spent little time with the children, and therefore inevitably it has been the mother who has shouldered the responsibility for raising the children, with no child support whatsoever being paid by the husband post March 2014. As the wife said at paragraph 15 of her affidavit filed 5 April 2018, since then she has been solely financial responsible for their care. In her most recent financial statement she deposes to weekly personal expenditure in the sum of $1,115.00, and whilst no attempt is made to delineate what parts of that expenditure is in respect of herself, and what is in respect of the children, plainly the costs of raising the children from March 2014 will have been substantial. Further, given the age of the children, those expenses will continue for some years to come, and likely at least another six years for E.

2. The division of the parties’ superannuation will not impact upon the earning capacity of either party.

3. Turning to the matters listed in s 75(2), the parties are both in their mid-forties, and as I understand it, both in fair health.

4. The husband is an undischarged bankrupt, having filed a debtor’s petition which saw a trustee appointed on 24 February 2017. In that petition he apparently described himself as employed in retail, but otherwise I have no information as to his present income.  I infer that he may have some limited personal chattels of little value. I am not satisfied that he has any financial resource beyond the superannuation the subject of these proceedings.

5. I have already indicated that the mother will continue to have the exclusive care of both children of the marriage, and it is unlikely that the husband will make any contribution to the costs of their raising.

6. The relationship was of some eleven years duration, and does not appear to have affected the earning capacity of either the husband or the wife.

7. The mother cohabits with her daughter from a previous relationship, whose income is $645.00 per week. Otherwise I know little of the circumstances relating to the cohabitation with the daughter.

8. I have noted that the husband paid a small amount of child support post separation, but from March 2014 onwards has not paid, and seems unlikely to pay in the future.

9. There is a further matter which the husband in his affidavit contends is relevant, and that is that he says that the appointment of administrators over the parties’ business in 2014, and the subsequent sale of it to the wife’s parents, was part of a deliberate plan on the part of the wife and her parents to ensure that there was no prospect of him receiving a fair division of assets, and that, in effect, the sale to the parents was a sham.

10. However the husband did not appear at the final hearing to advocate that, and in any event I note that the affidavit that he filed on 25 May 2018 was objected to by the wife, and plainly much of the way in which it was cast or purported to annexe documents would have made it highly problematic for the husband to rely upon in any event.

11. The material does not enable me to make the conclusion contended for by the husband in his affidavit.

ALTERATION AT ALL?

1. Plainly where these parties have been separated since 2013, engaged in highly acrimonious family (and criminal law) proceedings, and yet remain financially intertwined by virtue of their interests in the self-managed superannuation fund, it is appropriate to make an order ensuring that their financial interrelationship is terminated. 

JUST AND EQUITABLE DIVISION

1. The husband concedes that it is unlikely there is any equity in the wife’s motor vehicle, and in any event as I have observed, even if there be some slight equity, the wife has been the exclusive source of the funds which have been used to repay the loan associated with the car, and hence create any equity. I am otherwise satisfied that the chattels in the wife’s possession should remain hers, and likewise any chattels in the husband’s possession should remain his.

2. That then leaves only the division of the parties’ superannuation. I have observed that their legal entitlements are 44 per cent of the fund to the husband and 66 per cent to the wife.

3. The wife contends that there should be an adjustment in her favour of a further 14 per cent, reflective of the fact that since separation she has solely raised the children, and since March 2014 has been solely responsible for meeting their financial costs. She will likely continue to be solely responsible for the children into the future. In money terms, the adjustment she seeks is approximately $21,000.00.

4. When the father last engaged in the proceedings, and according to the material which he filed in May 2018, his position was that he should take 100 per cent of the superannuation fund, it being in substance the only asset of any value that is left available for distribution. He appears to say that his entitlement is justified because the sale of the business to the wife’s parents was undervalued and “carefully orchestrated”.

5. However I have already observed that, on the evidence ultimately before me, given that the husband did not appear at the hearing, such a conclusion is not open. Further, even if the husband had appeared, the problems with his material would likely have seen most of it excluded, and hence likely that no different material would have ultimately been before me in considering the appropriate division of property.

6. In my view the division contended for by the wife is a just and equitable one, precisely because of the reasons she proffers, namely that she has been solely responsible for raising the children since separation, and exclusively financially responsible for them since March 2014.  Further, while it is almost inevitable that she will continue to be the carer of both children into the future, it is quite likely that the husband will not make any financial contributions to the costs of their upkeep, and certainly has not done so in the past four years.

7. On one view, $21,000.00 is a very modest adjustment to make, given the likely costs that have been, and will be, expended in raising the children, but I note that in any event the superannuation asset will not be accessible to the wife until she retires.

8. I am therefore satisfied that a just and equitable division of the parties’ assets sees the wife retain the items presently in her possession, for the husband to do likewise, and for there to be a superannuation splitting order effecting a division of the parties’ self-managed superannuation fund, such that the wife receives 80 per cent and the husband receives 20 per cent.

CONCLUSION

1. For these reasons there will be orders as set out at the commencement of this judgment.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 24 July 2018.

Associate: 

Date: 24 July 2018