Cardus and Cardus
[2011] FMCAfam 434
•17 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CARDUS & CARDUS | [2011] FMCAfam 434 |
| FAMILY LAW – Property settlement – spousal maintenance – separation 15 years ago. |
| Family Law Act 1975, ss.75(2), 77A, 79(2), 79(4) |
| Hickey v Hickey (2003) FLC 93-143 |
| Applicant: | MS CARDUS |
| Respondent: | MR CARDUS |
| File Number: | MLC 11456 of 2007 |
| Judgment of: | Riley FM |
| Hearing dates: | 4 & 5 May 2011 |
| Date of Last Submission: | 5 May 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 17 June 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Skerlj |
| Solicitors for the Applicant: | M K Steele & Giammario |
| Counsel for the Respondent: | Mr Hall |
| Solicitors for the Respondent: | Harwood Andrews Lawyers |
ORDERS
The balance of the proceeds of the sale of Property D, [D] held on trust with Wightons Lawyers of Geelong be paid as follows:
(a)$12,125.88 to the wife; and
(b)$5,000 to the husband.
These orders are binding on [U] Super the trustee of [C] (“the fund”).
The base amount to be allocated to the applicant wife, Ms Cardus, out of the interest of the respondent husband, Mr Cardus, is $42,370.56.
Pursuant to s.90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest of the respondent husband Mr Cardus in the fund, the trustee of the fund pay to the applicant wife Ms Cardus $42,370.56 of such splittable payment and there be a corresponding reduction in the entitlement that the respondent husband Mr Cardus would have had but for this order.
Order 4 has effect from the operative time.
The operative time for the purposes of order 5 of these orders is four business days after the date of service of these orders upon the trustee of the fund.
There be liberty to each party and the trustee to apply in relation to the implementation of these orders.
Until the happening of any of:
(a)the establishment of a separate account in the name of the said applicant wife in the fund; or
(b)the transfer or “rolling over” into another superannuation fund of the payment split created by order 4; or
(c)the applicant wife satisfying a condition of release and being paid the payment split created by order 4; or
(d)the applicant wife executing a waiver of rights within the meaning of section 90MZA of Family Law Act 1975 regarding the payment split created by order 4,
the respondent husband be restrained by himself, his servants or agents from executing a death benefit nomination in favour of any person or doing any other act or thing which would render any part of his interest in the fund “a non splittable payment” within the meaning of regulation 12 or 13 of the Family Law (Superannuation) Regulations 2001 and the trustee of the fund give effect to this order.
Unless specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)insurance policies remain the sole property of the beneficiary named therein;
(c)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; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Section 77A of the Family Law Act 1975 applies to these orders.
$36,400 of the superannuation split is attributable to the maintenance of the wife.
These orders are intended to end the financial relationship between the parties and avoid further proceedings between them.
IT IS NOTED that publication of this judgment under the pseudonym Cardus & Cardus is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 11456 of 2007
| MS CARDUS |
Applicant
And
| MR CARDUS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property settlement. The application was filed on 24 November 2008. The hearing of the application was delayed pending the determination of the wife’s action for damages in the County Court of Victoria and the subsequent appeal to the Court of Appeal of the Supreme Court of Victoria.
The husband agreed with, or did not dispute, the following chronology that was put forward by the wife. (To avoid confusion, [W] is not the biological child of the husband. [X] is the child of both the husband and the wife in this proceeding. [Y] and [Z] are the children of the husband’s relationship with Ms G.)
1949 Wife born
1954 Husband born
1972Husband commences employment with US [employer omitted].
1979Wife working as [omitted] in Germany.
March 1979Parties commence cohabitation in Germany.
1979[W] born.
October 1980 Husband transferred to Nevada, United States of America.
December 1980 Wife’s contract with [German employer] expires.
December 1980 Wife and [W] join husband in Nevada.
1980Parties marry.
1981Wife commences employment full time as a [omitted] in Las Vegas.
1981/1982Wife receives approximately $6,000US superannuation refund from work in Germany.
1982[X] born.
April 1982Wife returns to work as a [omitted] in Las Vegas.
1984Husband transferred to [omitted], Germany. Wife and children move to Germany with him. Wife works as a [omitted].
1984-1987
Husband is transferred to England for
5 months. Wife and children remain in Germany.
1987Husband is transferred to [omitted], California. Wife and children move with him. Wife obtains employment as a [omitted].
December 1990 Husband transferred to [omitted], Korea.
25 December 1990 Wife and children move to Australia. Wife falls ill.
March 1991Wife and children join husband in Korea and wife works as a [omitted].
1992Husband retires from US [employer omitted] and parties and children relocate to Australia.
1992Husband commences to receive US [omitted] pension.
1992-1996Parties live in rented accommodation in the [D] area.
1994Husband commences employment with [A].
1994[Y] is born.
1996Parties purchase vacant land Property D, [D] and contract for the construction of a dwelling.
Mid 1996Wife becomes aware that the husband has fathered a child outside the marriage. Parties sleep in separate rooms at Property D, [D].
1998[Z] is born.
1999Husband admits that he has fathered two other children.
1999Wife working full time for [omitted] in Geelong.
1999Wife receives $50,000 from the estate of her late mother.
2000Wife commences employment with [omitted].
2002Wife suffers injuries to her left wrist and shoulders when she falls down stairs in the course of her employment.
2002Wife commences to receive Workers compensation payments.
2004Husband receives payout of $52,000 gross from [A] and commences employment as a [omitted].
2006 – 2007 Wife withdraws superannuation entitlements from [V] super fund of $12,222 and $3,311
October 2007 Workers compensation payments cease and wife commences to receive disability pension.
March 2008[D] property sold. Net proceeds $27,493. Wife commences to reside in [E] with Mr S.
September 2008 Mr S sells property at Property E, [E] and leaves the property. Wife remains residing at Property E paying rent to the new owners.
January 2009 Wife receives $2,500 from the proceeds of the sale of [D] pursuant to the Order of the Court made 6 January 2009.
September 2009 Wife’s weekly workers compensation payments were reinstated and she receives a lump sum payment of $40,871.00 of which $26,547.21 was repaid to Centrelink, leaving a net amount of $14,323.79
October 2009 Wife commences renting at Property L.
2009Wife undergoes back surgery.
February 2010 Wife’s claim for damages in the County Court unsuccessful.
March 2010Each of the parties receive $5,000 from the proceeds of sale of [D] by agreement.
2010Wife sells 1996 Holden Calais for $900
7 April 2011 Court of Appeal dismisses wife’s appeal from the jury verdict.
There was some disagreement as to when separation occurred. The wife initially said in this proceeding that it was in 1998. In her divorce application, which was uncontested, the wife said separation occurred on 1 February 1999. The husband said separation occurred in 1996. In cross examination, the wife conceded that the parties separated under one roof in 1996 and the husband moved out of the matrimonial home in 1998 (transcript page 43).
In addition, the husband said that, in May 2009, he and Ms G ceased cohabitation and the husband moved to [T]. I accept that the husband stopped living with Ms G at that time, although the wife doubted it, because of the husband’s evidence given in cross examination that he started living with a woman called Ms M in about 2009.
Proposals
The wife sought orders that:
a)the balance of the proceeds of the [D] property be paid to her;
b)the husband pay the wife spousal maintenance of $300 per week; and
c)the wife receive 100% of the husband’s superannuation.
The husband sought orders that:
a)$5,000 of the balance of the proceeds of the [D] property be paid to the husband and the remaining $12,125.88 to the wife;
b)the wife receive 15% of the husband’s superannuation; and
c)the wife’s application for spousal maintenance be dismissed.
The legislation
Section 79 of the Family Law Act1975 (“the Act”) defines the court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the court must take into account when considering what orders should be made for the alteration of the interests of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The four step approach
In Hickey v Hickey (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
STEP 1: The assets and liabilities
The parties agreed that their assets are as follows.
| ASSETS | HELD BY | VALUE |
| Proceeds of the sale of the [D] property held on trust | Husband and Wife | $17,125.88 |
| TOTAL ASSETS | $17,125.88 | |
| SUPERANNUATION | ||
| [C] Superannuation | Husband | $95,335 |
| TOTAL SUPERANNUATION | $95,335 | |
| TOTAL ASSETS PLUS SUPERANNUATION | $112,460.88 |
The parties agreed that their liabilities included the following.
| LIABILITIES | ||
| [omitted] Credit Co-Operative overdraft | Wife | $1,450 |
| Debt to Wighton’s Lawyers | Wife | $1,910 |
| GE Finance Credit Card | Husband | $2,700 |
| NAB Visa | Husband | $7,500 |
| Westpac Bank Mastercard | Husband | $8,500 |
| TOTAL LIABILITIES | $22,060 |
The wife also acknowledged that she owed legal costs in relation to her County Court and Court of Appeal proceedings. However, the quantum of those costs had not been ascertained. Similarly, the husband and wife both have legal costs for the present proceedings, but the quantum is unknown. Nevertheless, the parties agreed that their liabilities should not be taken into account when calculating the asset pool, but only when considering the s.75(2) factors. They seemed to take the view that the liabilities were post separation debts that should lie where they fall. Accordingly, the liabilities will be dealt with on that basis.
The asset pool
In view of the parties’ various agreements, the asset pool is $112,460.88, including superannuation.
Financial resources of the parties
In addition to his salary, the husband receives a [omitted] pension. The amount depends on the exchange rate between US dollars and Australian dollars. The Australian dollar in recent times has been at an historic high. At the time of trial, the husband’s [omitted] pension was paid at $A279 per week.
STEP 2: Contributions
Initial contributions
It was not submitted that either party brought any assets of value to the marriage, except that the husband had begun to accrue his right to a [omitted] pension in 1972, about eight years before the relationship commenced.
Contributions during the marriage
The parties both worked during the marriage, although the husband’s earnings were generally greater than the wife’s. The wife was the primary home maker and the primary carer of the children.
The wife argued that her employment capacity was affected by the frequent relocations required by the husband’s employment. It appears that most of the wife’s jobs were in the clerical area. There was no particular evidence about the level of the wife’s employment, or how it might have been affected by the frequent relocations. There is no proper basis upon which the court could conclude that the wife could have risen in her employment to a significantly higher level if the parties had remained in the one place.
The wife also argued that the husband’s contributions during the marriage were reduced by his pursuit of concurrent relationships during the marriage. One of those relationships was with a woman named
Ms R and another was with a woman called Ms G. There were two children of the latter relationship, [Y] and [Z]. The husband has also admitted to having two children from another relationship.
It will be recalled that the parties married in 1980, and relocated to Australia in 1992. [Y] was born in 1994 and [Z] was born in 1998. It was not suggested that the father was involved with the mother of those children, Ms G, before the parties relocated to Australia in 1992. Therefore, it appears that the husband’s contribution to the marriage was not diminished by his relationship with Ms G until about 1992. The wife did not give the dates of the husband’s relationship with
Ms R.
The parties gave different accounts of how much time the husband spent with the wife and [W] and [X] (the “first family”). The wife said that the husband claimed on weekends to be fishing, or working, when he was in fact with Ms G. The wife also said that he would spend rostered days off with Ms G.
The husband said that his outside relationships did not impinge on his care of his first family. He said that, when the children were small, he played with them, bathed them and changed their nappies. He said that, later, he coached [W]’s basketball team for three years. The wife disputed that, and said the husband merely attended some games. Having seen the parties give evidence, I accept that the husband did coach [W]’s basketball team, at least for some time.
Nevertheless, given the duration of the husband’s relationship with
Ms G, and the fact that they had two children together, I consider that the husband was less than fully committed to his first family from about 1992 onwards. I consider that it is likely that the husband did not devote as much time as he could have to the care of his first family, with the result that the wife was required to put more care and effort into the husband’s first family. That is, I consider that the wife’s contribution to the home maker and parent role was greater than it would have been if the husband had been fully committed to his first family.
On the other hand, the husband said that he made a significant contribution in that he cared for the wife’s son, [W], as if [W] were his own son. The wife initially said that the husband’s contributions for [W] were “minimal”, even though [W]’s own father provided him with no financial support at all. Ultimately, the wife accepted that the husband had made a significant financial and non-financial contribution to the care of [W].
The husband financially supported [W] from the time of his birth until he reached adulthood, and in other respects treated [W] like a son. Indeed, [W] is nominated as a beneficiary in relation to the husband’s US [omitted] pension in equal shares with the husband’s biological children, [X], [Y] and [Z] (exhibit 4). I accept that these circumstances amount to a significant contribution, even though the husband did not devote all of his available time to his first family.
Contributions post separation
Separation occurred about 15 years ago. At the time of separation under one roof, in 1996, [X], the child of the marriage, was about 14 years old. He continued to live with the wife and the husband in the former matrimonial home until the husband left in 1998, when [X] was about 16. From then on, [X] continued to live with the mother in the former matrimonial home. He spent no overnight time with the husband until 2010, when [X] lived with the husband for about six months. At that stage, [X] was about 28 years old. After separation, [X] and [W] saw the husband once or twice a month.
The husband continued to pay the mortgage on the former matrimonial home until March 2008, when [X] was about 26 years old, and when the wife moved to [E] with Mr S. The wife said that the mortgage was about $200 per month. She said that figure was about half of the [omitted] pension, which historically was about $400 per week, due to the Australian dollar having had a much lower value in past. The husband said that, initially, the mortgage was about $1,400 per month, but it increased to $1,600 per month after refinancing. He said that the mortgage was about $126,000.
Neither party produced any bank statements to show the amount of the mortgage repayments. The wife seems to have served a notice to produce but it did not require production of the home loan bank statements. Neither party was squarely or effectively cross examined about their evidence on this issue.
The evidence before the court is entirely unsatisfactory. It was primarily the husband’s responsibility to produce documents that substantiated the amount of the mortgage repayments that he claimed. Moreover, as discussed below, the husband somewhat overstated some of his expenses. In all of the circumstances, I conclude that the mortgage repayments were about $200 per week.
It was common ground that the husband did not pay the wife child support for [X], who was 16 when the husband left the matrimonial home. It was also common ground that the husband’s only contribution to the wife’s household after separation was the payment of the mortgage. The mortgage repayments were about the same amount as the husband is presently paying in child support for both [Y] and [Z].
It was also common ground that the wife did not seek formal spousal maintenance from the husband, until this proceeding was commenced. The wife conceded that she had agreed with the husband that she would not seek any payment from him, such as child support or spousal maintenance, on the basis that he would continue to pay the mortgage. The wife conceded that that agreement was reached when [X] was 16 years old and before the wife had the accident which has prevented her from working.
In 1999, the wife claimed that she received an inheritance from her mother of $50,000. It was not suggested that the wife shared any of that inheritance with the husband.
The husband received a redundancy payment of $52,000 gross from [A], after working there for eight years, from 1994 until 2002. The wife claimed that she was entitled to a share of the redundancy payment. The wife initially said that the husband had worked for [A] for about five years before separation, which she said occurred in 1999. In cross examination, the wife conceded that separation occurred in 1996, about two years after the husband started working for [A]. Therefore, the amount of the redundancy payment that is referable to the period of the marriage is about two years out of eight, or about one quarter. The court was not told what the net figure was.
The wife conceded that the husband’s superannuation from [A] was rolled into his present superannuation with [C]. The wife also agreed that the husband’s superannuation stood at $12,700 at separation in 1996 and now stands at $95,335. The wife also expressly agreed that the vast bulk of the husband’s superannuation entitlements were accumulated after separation. In fact, about 86% of the husband’s superannuation was accumulated after separation.
The wife has withdrawn her own superannuation entitlements of about $15,000, presumably on the grounds of hardship, and used them for living expenses. The wife’s workers compensation payments can be regarded as the equivalent of salary, albeit at a reduced rate.
The wife argued that the husband had the exclusive use of his [omitted] pension after separation. The right to that pension accrued from 1972 until 1992, being 20 years. The parties lived together from 1980 until about 1999. The overlap was from 1980 to 1992, being about 12 years out of the 20 during which the pension accrued, or 60% of that period.
The wife said that under United States law, she was entitled to half of the husband’s [omitted] pension because she had been married to him for more than 10 years. She said that the husband said at the time of separation that the wife was entitled to half of the [omitted] pension. The wife said that the husband had agreed to pay the mortgage on the former matrimonial home, in which the wife continued to live with the children, as the wife’s half of the pension. The husband did pay the mortgage until March 2008, but denied that he had ever said that the wife was entitled to half of his pension.
The wife relied on a note hand written by the husband at the time of separation (exhibit 1). It said, among other things:
You can cash the check I wrote you to pay bills but don’t worry I know half the money in the check book is yours
If you want you can cancel that check and write one for $675 That way you can pay bills and get groceries.
The wife said that, by saying “half the money in the check book is yours”, the husband meant that half of the [omitted] pension into the future was the wife’s, because the [omitted] pension was paid into the cheque account. The husband disputed that interpretation. I do not accept the wife’s interpretation. It is simply not what the note said. In any event, regardless of anything the husband might have said, the court must now determine what is just and equitable, taking into account all of the circumstances of the case.
The wife has already received $7,500 from the proceeds of the sale of the [D] property and the husband has received $5,000.
Contribution based entitlements
In the circumstances of this case, it seems to me to be appropriate to deal with the proceeds of the sale of the [D] property and the husband’s superannuation on an asset by asset basis, rather than on a global basis.
The wife said that she was entitled to 65% of the pool, based on contributions. The husband said that, on contributions, the parties were each entitled to 50% of the proceeds of the sale of the [D] property and the wife was entitled to 10% of the husband’s $95,335 superannuation with [C]. That is about $8,562.94 plus $9,533.50 which equals $18,096.44 or about 16% of the total pool.
In summary, the only initial contribution of note made by the parties was the husband’s partial accrual of his right to a [omitted] pension.
During the relationship, which lasted about 17 years, the husband earned more than the wife, but the wife contributed more in the homemaker and parent role, particularly as the husband was engaged in relationships outside the marriage. On the other hand, the husband cared for the wife’s son, [W], financially and in every other way, during his entire childhood.
After separation, [X] lived with the wife in the former matrimonial home. The husband paid no child support for [X], who was then
16 years old. However, the husband did pay the mortgage on the former matrimonial home for the two years when the parties were separated under the one roof and for a further 10 years after he moved out. The mortgage payments were about $200 per week. As a guide, $200 per week is about the amount that the husband is presently paying in child support for two children.
The wife inherited $50,000 which she apparently did not share with the husband. The husband received a redundancy payment of $52,000 gross. That payment was referable to eight years of employment, two years of which overlapped with cohabitation between the parties.
The wife drew down her superannuation of $15,000 and used it for her own purposes. The husband continued to accrue his superannuation of $95,335, 14% of which was referable to the period of the marriage. If that superannuation were to be split equally, it would give the wife 7% of the present amount of $95,335, or $6,673.45.
The husband received his [omitted] pension, which, for present purposes, is to be treated as part of his earnings.
The wife has already received $7,500 from the proceeds of the sale of the [D] property and the husband has already received $5,000.
The post separation period lasted about 15 years, while the relationship lasted about 17 years. The time between the separation and the resolution of the parties’ financial affairs has been unusually long. Unfortunately, neither party provided evidence about the value of their assets at the time of separation. Neither party explained why there was so little equity in the former matrimonial home, after they had owned it for about 12 years.
The relative value as between the parties of the husband’s initial contribution of the partial accrual of a right to a [omitted] pension diminished in significance over the course of the marriage. The contributions of the parties during the marriage were more or less equal. Although the husband earned more than the wife, and he cared for her son [W], the wife fulfilled more of the homemaker and parent role, especially as the husband was often engaged in other pursuits.
Post separation, the husband contributed more than the wife. He made the payments for the mortgage on the former matrimonial home and accrued the vast bulk of his present superannuation. Although he did not share his redundancy payment with the wife, the wife did not share her inheritance with the husband, and she took all of her superannuation for her ordinary living expenses. Additionally, the wife has already received a little more from the proceeds of the sale of the former matrimonial home than the husband. The wife continued to care for [X], but he was sixteen at the time the husband left the former matrimonial home.
Taking all of these matters into account, I accept the husband’s submission that the contribution based entitlements of the parties to the proceeds of the sale of the [D] property are 50:50, and the contribution based entitlements of the parties to the husband’s superannuation, are 90:10 in favour of the husband. In dollar terms, those amounts are $8,562.94 from the [D] property and $9,533.50 from the [C] superannuation, or $18,096.44 in total.
STEP 3: the s.79(4)(d), (e), (f) and (g) and the s.75(2) factors
The proposed orders will not have any effect on the earning capacity of either party. It was not suggested that there are any orders affecting the parties other than the present property adjustment and any spousal maintenance order that is made in these proceedings. The husband has two children from another relationship, but any orders in respect of that family were not made known to the court. There is no child support payable in respect of a child of the marriage and there was no child support paid in the past in respect of a child of the marriage.
The wife is 61 years old and the husband is 56 years old. The wife injured her left wrist and shoulder when she fell down stairs during the course of her employment in 2002. She is unable to work now and is not expected to be able to work in the future. The husband is in good health. It is anticipated that he will be able to continue working in appropriate gainful employment until he is 65 years old.
The wife currently earns $585 per week in workers compensation payments, or $519 after tax. It is anticipated that she will continue to receive this amount until she is 65 years old, although the payments are subject to review. After that, it is expected that the wife will receive the age pension.
The husband earns a weekly salary of $1,152 and a US [omitted] pension of $279.65 per week making a total of $1,431.65 per week, or $74,445.80 per year. The US [omitted] pension decreases with the strength of the Australian dollar, which is at a historically high level. That is, the husband’s US [omitted] pension has been higher in the past than it is now. It would be foolish to speculate on how much it might be worth in the future.
Neither party owns any real estate. They are both renting. The wife has no property other than her home contents which she values at $1,000. The husband has $1,000 in the bank, a car worth $6,000 and household contents which he values at $6,000. The parties are jointly beneficially entitled to the proceeds of the sale of the matrimonial home which amount to $17,125.88.
Neither party has any financial resources, other than their incomes, and the husband’s [omitted] pension. There was much discussion at the hearing about whether the husband’s [omitted] pension is payable for life, or whether it will end when he turns 66 years of age. The husband said that he had received a letter which he could no longer find. He said he understood from that letter that from age 66, he would receive US social security benefits of the same amount as the US [omitted] pension instead of the US [omitted] pension itself.
In the absence of any evidence to the contrary, I accept the husband’s evidence on this issue. It seems to me to be plausible. I understand that, from age 65, the husband will get an Australian age pension, if he is eligible, as well as the US [omitted] pension, and, from age 66, he will get a US social security benefit instead of the US [omitted] pension.
The child of the marriage is now an independent adult. However, the husband has an obligation to support [Y] and [Z]. He has been assessed by the child support agency to pay $200 per week. That sum will increase to $213 per week from July 2011. There was no suggestion that the husband has any obligation to support Ms G or anyone else.
The wife in her most recent financial statement said that she has total weekly expenses of $736, consisting of $230 per week for rent, $66 for income tax, $16 for life insurance, $6 for home contents insurance, $17 in loan repayments and $401 for the matters set out in Part N of her financial statement filed on 28 April 2011. The particular expenses are as follows:
Item
Total
Food
$175
Household supplies
$25
Gas
$13
Electricity
$13
Water
$10
Telephone & Internet
$40
Fares/car parking
$40
Clothing and shoes
$20
Medical, dental and optical (not including health insurance premiums)
$10
Entertainment/ hobbies
$20
Holidays
$20
Chemist/pharmaceutical
$5
Hairdressing, toiletries
$10
Total
$401
The husband conceded that none of the wife’s expenses was excessive.
The husband in his most recent financial statement said that he has weekly expenses of $1,509, consisting of $350 per week for rent, $307 for income tax, $18 for car insurance, $15 for home contents insurance, $20 for motor vehicle registration, $95 per week for credit card repayments, $200.43 for child support, which will increase to $219.55 from 1 July 2011, and $504 for the matters set out in Part N of the financial statement filed on 4 May 2011. The particular expenses are as follows:
Item
Total
Food
$190
Household supplies
$15
Gas
$15
Electricity
$18
Telephone
$20
Motor vehicle
- petrol
- maintenance
$80
$35
Clothing and shoes
$30
Children’s activities
$40
Medical, dental and optical (not including health insurance premiums)
$9
Holidays
$10
Chemist/pharmaceutical
$32
Books and magazines
$10
Total
$504.00
It was established in cross examination that the husband had overstated some of his expenses. He conceded that his car registration was actually $12 per week, rather than $20, and his income tax was $236 per week, rather than $307. That makes a difference of $8 plus $71, being a total of $79 per week.
The husband said that he had lived at his present address for about two years. He said that for the first year, he lived there with Ms M. He conceded that he and Ms M had just signed a new lease on the premises. However, the husband denied that Ms M lived there with him. He conceded that she came to court with him on the first day of the hearing. He then conceded that Ms M stayed over two nights a week, or possibly three. He said that Ms M worked in an [omitted]. The husband denied that Ms M lived in the house with him, or contributed to the rental. Ultimately, however, he conceded that he could probably get Ms M to help pay the rent.
In relation to child support, the husband initially claimed that he had [Y] and [Z] for two nights each alternate weekend, for half of the school term holidays and for up to two weeks over the summer holidays. He agreed that this amounted to about 75 nights a year, but said he did not always have them quite that much. He conceded that his child support had been assessed on the basis that [Y] and [Z] did not stay with him overnight at all. The husband also conceded that, if [Y] and [Z] stayed with him for between 52 and 127 nights a year, by advising the child support agency of that fact, he would be able to reduce his child support payments by about $50 per week.
However, the husband said that he had no record of the number of nights that [Y] and [Z] stayed with him. Therefore, his counsel suggested, the husband would have difficulty in establishing the necessary facts to achieve a reduction in child support. That may be so as far as the past is concerned. However, there is no reason that the husband could not start keeping a record from now on, and achieve a reduction in his child support accordingly.
At present, neither party has an entitlement to a pension, benefit, or a superannuation pension, except that the husband is presently entitled to and receives a US [omitted] pension of $279.65 per week. When he turns 66 years old, in 10 years time, he will be entitled to a US social security pension of about $US990 per month (exhibit 9).
The husband accepted that the US [omitted] pension is tax free in Australia, and does not form part of the income on which he is assessed for child support. He also conceded that, historically, his US [omitted] pension had been more like $400 per week, because of the exchange rate.
The husband claimed that the wife would be entitled to a US social security pension when she is 65 years of age. The wife disputed that, saying that she would only be eligible for such a pension if she worked for a further 12 months in the United States. She said that there was no prospect of her being able to do that, so there was no prospect of her ever being eligible for a US social security pension. The wife’s understanding is supported by exhibit 2. I conclude that the wife would not be entitled from the age of 65 to a US social security pension.
When the wife turns 65, in about four years’ time, she will be eligible for an age pension and will stop receiving workers compensation.
The wife said that her standard of living was “minimal”. She said she was dependent on gifts and loans of money from friends, she could sometimes not afford food and she could not buy clothes that she wanted, and was, for example, wearing a jacket that cost $12. She said that she had relied on the Salvation Army. She said that she had sold her car, because it needed $5,000 of repairs which she could not afford. She said she now had to walk to the supermarket, which was 20 minutes one way. She said that she could not afford to go to the movies or eat out.
The husband in his affidavit said that the wife got into financial difficulty because she gambled on poker machines. The wife in her affidavit said that she had no financial capacity to gamble but admitted gambling small amounts of money occasionally. In cross examination, the wife said that she gambled $20 to $50 once a fortnight or once a month. She said that she gambled with the money she had left after paying all of her bills.
The wife’s bank statements were put to her in cross examination. They showed that she withdrew money from the ATM at the [L] Sporting Club as follows:
a)8 November 2010 12.57pm $20
b)8 November 2010 1.08pm $20
c)15 November 2010 12.58pm $20
d)19 November 2010 $20
e)19 November 2010 $20
f)19 November 2010 $20
g)27 January 2011 $20
h)9 March 2011 $20
i)25 March 2011 11.40am $20
After initially suggesting that she might have used some of that money to go to Geelong on the train, the wife accepted that she spent all of those amounts on gambling. It amounts to $180 over a period of about five months, or about $36 per month, or less than $9 per week. That is not an excessive amount for entertainment.
The wife also agreed that in the last year or so she had spent $1,600 on a 55 inch slim line digital television. She said that she had used the $900 she received from the sale of her car and otherwise made payments on lay-by. She said that she had put her old television in the garage.
The wife said in her most recent financial statement that she was now receiving $585 per week in workers compensation payments, or $519 after tax. She said she expected to continue to receive that amount until she turned 65 in four years time, although it is subject to review. The payments have increased, I gather, in line with the salary of which they are a proportion.
The wife agreed that, when she commenced these proceedings, she was not in receipt of the workers compensation payments but only received a disability pension of $260 per week, after tax. She said that sum included rent assistance.
The wife conceded that her workers compensation payments were about twice as much as the disability pension she was receiving when she instituted the proceedings. The wife conceded that, in her first financial statement sworn on 14 November 2008, she had said that her weekly expenses were $510 per week, and she now receives $519 per week after tax. However, the wife said in her second financial statement filed on 28 April 2011 that her weekly living expenses were now $736. The wife said that she had to move house and her rent and various other costs had increased. The wife said that her workers compensation payments were 70% of the salary that she would have received if she had remained in her job.
The wife said that her rent in [E] had been $160 per week. She said that her rent in [L] was now $230 per week. She agreed in cross examination that she had taken on a property with a higher rental in [L] than she might have been able to find in [E] because she wanted to be closer to her family. It was put to the wife that she moved to [L] when her income doubled, from the disability pension to the workers compensation payments, and when she knew she would be able to meet the higher rental payments from her increased income. The wife said that she took on the higher rental obligation thinking that she would qualify for a health care card and rent assistance but she did not.
The wife said that, when she is 65, her workers compensation payments will end and she will be dependent on the age pension. The wife conceded that, once the husband is 65 or 66, he will be dependent on his [C] superannuation (or, at least, the part of it that is not transferred to the wife), and social security, whether from the US Treasury or the Australian Treasury, or both.
With the exception of the 55 inch television, which, in the wife’s circumstances was extravagant, the wife’s standard of living is quite low by community standards. A reasonable standard of living for the wife, given the parties’ history and circumstances, would be somewhat higher but nevertheless modest.
There was no suggestion that the wife would undertake a course or training to obtain an adequate income.
As far as creditors are concerned, both parties have the debts described above. They amount to about $19,000 in the husband’s case and about $3,500 in the wife’s case. Both parties also have the legal costs of these proceedings. The wife, in addition, has the legal costs of her County Court application and the Court of Appeal proceedings. The quantum of the legal costs was not made known to the court.
If the wife receives money from the husband’s superannuation, she could be expected to access it immediately under the hardship grounds, and it, and any other money she receives pursuant to these proceedings, could then be used to reduce her debt. Similarly, any money the husband receives from the proceeds of sale of the [D] property could be used to reduce his debts.
The wife contributed to a relatively minor extent to the husband’s superannuation and [omitted] pension. The marriage lasted for about
16 years. As discussed above, I do not consider that the marriage reduced the wife’s income earning potential.
The wife does not have any children under the age of 18 years. The husband has two children under the age of 18 years. He wishes to continue to parent them, albeit only on alternate weekends and for part of the school holidays.
The wife is not cohabiting with another person. The husband claims that he is not cohabiting with another person. It was put to the husband that he could ask Ms M to contribute to the rent. However, it was not put to the husband that he was actually cohabiting with Ms M. In any event, there was no evidence about the financial circumstances of
Ms M, save that she works in [omitted]. The husband was not asked in what capacity she works, whether she works full time or how much she earns. The wife through her counsel seems to have accepted that the husband is not actually cohabiting with anyone at the moment.
Child support has already been discussed. There was no suggestion that there is any financial agreement that is binding on the parties. There are no other relevant facts or circumstances.
Adjustment for “future factors”
The wife submitted that she was entitled to a further 30% or 35% adjustment for the “future factors”. The wife, through her counsel, seemed to suggest that it would be appropriate for the court to make an adjustment in the wife’s favour for future factors, as lump sum spousal maintenance, rather than making an order for a weekly or monthly amount for future spousal maintenance. That seems to me to be the best approach in this case, especially as separation occurred about
15 years ago. It is appropriate for the financial relationship between the parties to be brought to an end.
The husband agreed that the wife was entitled to a further adjustment for future factors, notionally including spousal maintenance. He said that the wife should receive in total $12,000 from the proceeds of the [D] property and 15% of the husband’s superannuation. By my calculation, that is about 23% of the pool. The husband submitted that the wife should receive about 16% of the pool based on contributions. Consequently, the husband’s position was that there should be a 7% adjustment in favour of the wife for the future factors, notionally including spousal maintenance.
Section 72(1) of the Act provides that:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
By virtue of s.75(3) of the Act, the court is required to disregard the entitlement of a party to Centrelink benefits. Neither party is presently entitled to Centrelink benefits. However, in about four years, Centrelink benefits will be the wife’s only means of support. In about 10 years, the husband will also probably be dependent on Centrelink benefits. However, he will also receive a US social security pension.
The husband did not dispute that the wife’s expenses in Part N of her financial statement were reasonable. They were less than his own expenses.
The husband did query the amount that the wife spends on rent, being $230 per week. (The husband himself spends $350 per week on rent, although he does need a larger house to accommodate [Y] and [Z] on weekends and holidays.) The husband argued that the wife could have continued renting in [E], at about $160 per week, instead of moving to [L], at $250 per week. The wife said that she wished to be closer to her family. That seems to me to be entirely appropriate. The overall amount of rent paid by the wife is not unreasonable.
The husband also queried the amount` that the wife spends on gambling. As discussed above, it works out to less than $10 per week. That is not an unreasonable amount to spend on entertainment.
The only other expenditure that the husband took issue with was the wife’s purchase of a digital television. As discussed above, that was extravagant, given the wife’s debts and her generally difficult financial circumstances. However, the television is not adding significantly to her present outgoings.
The wife’s weekly reasonable expenditure is $736 and her income is $585. I am satisfied that the wife is unable to adequately support herself.
Consequently, it is necessary to consider whether the husband is reasonably able to support the wife. The husband said that his weekly income is $1,431.65 and that his weekly expenditure is $1,509, leaving him with a shortfall of $77.35 However, he conceded that he had overstated his car registration by $8 per week and his tax by $71 per week, making a total of $79 per week. Consequently, the husband conceded that his income was slightly less than his expenditure.
Furthermore, the husband conceded that Ms M could contribute to his rent. Ms M is the woman the husband lived with in the past, and who stays over two or three nights a week, and who in the last few weeks jointly signed a lease agreement with the husband in respect of the husband’s home. The amount that Ms M could be expected to contribute was not explored. I accept that the husband needs a three bedroom home to accommodate [Y] and [Z] on weekends and holidays. If not for that, the husband could live in a smaller home. In these circumstances, it would not be unreasonable for Ms M to contribute $90 per week for the rent.
The husband also conceded that his child support could be reduced by about $50 per week if he kept a record of how many nights [Y] and [Z] stayed with him a year, and if he could establish, as he claims, that they stay with him about more than 52 nights a year.
The husband could reduce his expenditure by $140 per week, and have that available to pay the wife.
As stated previously, it is appropriate in all of the circumstances of this case to make an order for lump sum spousal maintenance, as part and parcel of the adjustment for the future factors. That requires some prediction about the future, concerning, for example, how long the parties will remain fit and well, how long the husband will remain in employment and whether any unforeseen events will occur. A lump sum, in one sense, is worth more than an income stream over time, because it is money in hand, and is based on the optimistic assumption that circumstances will not change adversely in a certain time frame.
It is noteworthy that the separation in this case occurred about 15 years ago. That is a long time for a property application or a spousal maintenance application to be delayed. For about 10 years after the husband moved out of the matrimonial home, he continued to pay the mortgage on the matrimonial home at a rate that was probably higher than the child support for [X] would have been up until his
18th birthday. There was no suggestion that child support or adult child maintenance would have been payable for [X] after he turned 18. Consequently, the amount that the husband paid for the mortgage after [X] turned 18 could be regarded as a form of spousal maintenance. That is, the wife, in a sense, has already had a fairly long period of spousal maintenance.
In all of the circumstances of this case, I consider that it is appropriate to make an adjustment for future factors in favour of the wife of the equivalent of $140 per week for five years. This amounts to $36,400, or about 32% of the pool.
STEP 4: What order is just and equitable
Adding the $36,400 adjustment for the future factors to the $18,096.44 adjustment for the wife’s contributions makes a total for the wife of $54,496.44, or about 48.5% of the pool. It seems to me to fair that the husband should have some of the cash from the proceeds of sale of the [D] property. His claim to receive $5,000 from the money held on trust is reasonable. Accordingly, I consider that it is just and equitable for the wife to receive the balance of $12,125.88 and a superannuation split of $42,370.56.
It appears from the affidavit sworn by the wife’s solicitor on 14 June 2011 that the trustee of [C] was accorded procedural fairness by letter dated 10 May 2010. Consequently, there will be orders in accordance with these reasons.
I certify that the preceding one hundred and seven (107) paragraphs are a true copy of the reasons for judgment of Riley FM
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