Carmody and Carmody
[2007] FamCA 1307
•2 November 2007
FAMILY COURT OF AUSTRALIA
| CARMODY & CARMODY | [2007] FamCA 1307 |
| FAMILY LAW - PROPERTY SETTLEMENT – Contribution; Section 75(2) – Just and Equitable |
| Family Law Act 1975 (Cth) |
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
Mallett & Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage Pierce (1998) 24 Fam LR 377
| APPLICANT: | Mrs Carmody |
| RESPONDENT: | Mr Carmody |
| FILE NUMBER: | NCC | 563 | of | 2007 |
| DATE DELIVERED: | 2 November 2007 |
| PLACE DELIVERED: | Newcastle |
| JUDGMENT OF: | JR Loughnan |
PLACE HEARD: Newcastle
| HEARING DATE: | 1 November 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr C. Boyd |
SOLICITOR FOR THE APPLICANT: | Emery Partners |
| COUNSEL FOR THE RESPONDENT: | Mr I. Duane |
SOLICITOR FOR THE RESPONDENT: | Kinnear & Co. Solicitors |
Orders
That within forty two (42) days after the date of these Orders ("the first period), the Husband to pay the Wife by way of property settlement $247,000.00 ("the money").
That upon she receiving the money, the Wife to transfer to the Husband all of her right title and interest in the former home situate at and known as the B property in the State of New South Wales being the whole of the land contained in Certificate of Title Identifier … ("the former home").
That the Husband indemnify the Wife and keep the Wife indemnified in relation to all outgoings in respect of the former home including all payments in respect of the mortgage, rates, taxes, charges, insurance and expenses in relation to repairs and improvements and any other sums due or accruing in respect of the former home.
That prior to the expiry of the first period, the parties do all acts and things and sign all necessary documents to cause the wife to be released form all liability under any Mortgage secured by the former home (“the mortgage”) and the transfer to the husband of the wife’s interest in the former home is dependent thereon. For the purpose of this Order, the wife’s liability under the mortgage shall be deemed to be released when either a Discharge of Mortgage in registrable form has been executed by the mortgagee.
That if the husband fails to pay the money to the wife or the wife’s liability under any mortgage secured by the former home has not been released in either case by the expiry of the first period, the parties do all acts and things and sign all documents necessary to cause the former home to be sold by private treaty at the earliest possible date at a price to be agreed between the parties and failing agreement to be determined by the President of the Real Estate Institute of New South Wales or his nominee and that the proceeds of the said sale be disbursed as follows:
5.1to pay agent's commission, advertising expenses and legal expenses of the sale;
5.2to pay out and discharge the mortgage to St. George bank;
5.3to pay 65% of the net proceeds of sale to the wife;
5.4 to pay the balance to the husband.
That if the former home is not sold by private treaty within a period of four (4) months after the date of this Order, then the parties shall join in and do all things necessary to cause the former home to be sold by auction and in particular:
6.1 within fourteen (14) days after the expiry of the four month period:
6.1.1to agree upon and appoint a real estate agent or failing agreement to appoint the real estate agent nominated by the President of the Real Estate Institute of New South Wales or her nominee;
6.1.2to give instructions to the appointed real estate agent to sell the former home by auction at the earliest possible date but not to exceed two months after the date of giving those instructions;
6.1.3to execute all documents that the appointed real estate agent requires for the purpose of the auction sale;
6.1.4to agree on a reserve price or where there is no agreement, the reserve price to be determined by the appointed real estate agent;
6.1.5give instructions to a Solicitor to prepare a Contract for Sale and to make a copy available to the appointed real estate agent prior to the auction;
6.1.6the husband to provide the appointed real estate agent such funds as may be required to cover advertising expenses;
6.2 The parties shall thereafter do the following:
6.2.1co-operate with the appointed real estate agent by making a key available, allowing the former home to be inspected by prospective purchasers and ensuring that the home is in a neat and clean condition at the time of inspection;
6.2.2 attend the auction;
6.2.3if the reserve price is not reached negotiate with the highest bidder and if necessary comply with the appointed real estate agent’s advice to accept a price less than the reserve price;
6.2.4 execute the Contract for Sale;
6.2.5 execute all other necessary documents to complete the sale;
6.2.6execute all necessary documents to cause the proceeds of the sale to be disbursed in the following order:
6.2.6.1to pay out and discharge the mortgage to St. George Bank;
6.2.6.2to pay 65% of the net proceeds of sale to the wife;
6.2.6.3 to pay the balance to the husband.
That pending the transfer to the husband of the wife’s interest in the former home or alternatively completion of the sale the wife to have exclusive use and enjoyment of the former home subject to she:
7.1keeping the land in good repair and tidy condition having regard to its present condition;
7.2 keeping all improvements insured to their full insurable value;
7.3paying the mortgage repayments, rates and all other outgoings as and when they fall due.
That if required, the wife have the conduct of the sale and instruct solicitors to act on the sale.
That a base amount of $63,452.85 is allocated, as required by Section 90MT(4) of the Family Law Act 1975 (“the Act”) to the wife out of the husband’s interest in A Superannuation Fund (“[A Super]”).
That in accordance with Section 90MT(1)(a) of the Act, whenever a splittable payment within the meaning of Section 90MT of the Act becomes payable to or on behalf of the husband from his interest in A Super:
10.1the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
10.2the husband’s entitlement and the entitlement of such other person to whom a splittable payment may be made out of the husband’s interest in A Super is correspondingly reduced.
That the trustee of A Super (“the trustee”) do all such acts and things and sign all such documents as may be necessary to:
11.1calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement for the wife created by paragraph 1.10.1 of this Order; and
11.2pay the entitlement whenever the trustee makes a splittable payment out of the husband’s interest in A Super.
That this Order have effect from the operative time and the operative time is four (4) business days after the service of a copy of this Order on the Trustee.
That on or before fourteen (14) days after the date of this Order, the husband must instruct the Trustee to pay him a lump sum from A Super upon his retirement and the husband is restrained from giving instructions to the Trustee to pay him a pension on his retirement from A Super.
That the husband is restrained from giving the Trustee a binding death nomination in favour of any person which would have the effect of in any way reducing the value of the wife’s entitlements as calculated by the Trustee in accordance with paragraph 1.11.1 of this Order.
That the husband must indemnify the wife in respect to any loss suffered as a result of any failure of the husband to comply with paragraphs 1.13 and/or 1.14 of this Order.
That the husband be relieved of his obligations pursuant paragraphs 1.13 and/or 1.14 of this Order if the Trustee has rolled over or transferred the transferable benefits out of the husband’s interest in A Super to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
That the parties and the Trustee have liberty to apply on seven (7) days notice in respect to the implementation of this Order.
That within 14 days after the date of this Order, the husband and wife to do all acts and things necessary to close the account held in the joint names of the parties held at St. George Bank account no. … and pay the proceeds of the said account to the wife.
That within 14 days after the date of this Order, the wife shall do all acts and things necessary to transfer to the husband her right title and interest in the parties’ Caravan and the husband shall indemnify and keep indemnified the wife in respect to all liabilities relating to the said caravan.
That except as otherwise provided in this Order and as between the parties, the parties shall have the sole right title and interest at law or in equity in all other property and financial resources presently in their respective possession, power or control, including but not limited to money, shares, real property, motor vehicles, furniture, furnishings, personal effects, superannuation entitlements and entitlements related to their employment and each party covenants to sign any necessary documentation to transfer such property to the party in possession, power or control of same.
That except as otherwise provided in this Order, the husband and the wife each indemnify the other in respect of any and all liabilities attaching to the property and financial resources to which that party is entitled under this Order and in respect of any and all liabilities in the sole name of that party.
That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to this Order.
That in the event of either party refusing or neglecting to sign within fourteen (14) days after receipt of a written request to do so, any documents necessary to put into effect this Order, the Registrar of the Newcastle Registry of the Family Court of Australia is hereby appointed pursuant to Section 106A Family Law Act to do all acts and things necessary to give validity and operation to the said documents, instruments or writings so as to effect compliance with this Order.
Leave is granted to both parties to re-list these proceedings by arrangement with the Associate to Judicial Registrar Loughnan on 7 days notice in relation to the form or implementation of these orders or in relation to costs.
IT IS NOTED that publication of this judgment under the pseudonym Carmody & Carmody is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: NCC 563 of 2007
| MRS CARMODY |
Applicant
And
| MR CARMODY |
Respondent
REASONS FOR JUDGMENT
After a marriage of more than 15 years the parties cannot agree on a settlement of their property.
Applications
The wife seeks orders in accordance with her Further Amended Application for Final Orders filed 31 October 2007 as follows:
1.1That within forty two (42) days after the date of these Orders ("the first period), the Husband to pay the Wife by way of property settlement $300,000.00 ("the money").
1.2That upon she receiving the money, the Wife to transfer to the Husband all of her right title and interest in the former home situate at and known as [the B property] in the State of New South Wales being the whole of the land contained in Certificate of Title Identifier […] ("the former home").
1.3That the Husband indemnify the Wife and keep the Wife indemnified in relation to all outgoings in respect of the former home including all payments in respect of the mortgage, rates, taxes, charges, insurance and expenses in relation to repairs and improvements and any other sums due or accruing in respect of the former home.
1.4That prior to the expiry of the first period, the parties do all acts and things and sign all necessary documents to cause the wife to be released form all liability under any Mortgage secured by the former home (“the mortgage”) and the transfer to the husband of the wife’s interest in the former home is dependent thereon. For the purpose of this Order, the wife’s liability under the mortgage shall be deemed to be released when either a Discharge of Mortgage in registrable form has been executed by the mortgagee.
1.5That if the husband fails to pay the money to the wife or the wife’s liability under any mortgage secured by the former home has not been released in either case by the expiry of the first period, the parties do all acts and things and sign all documents necessary to cause the former home to be sold by private treaty at the earliest possible date at a price to be agreed between the parties and failing agreement to be determined by the President of the Real Estate Institute of New South Wales or his nominee and that the proceeds of the said sale be disbursed as follows:
1.5.1to pay agent's commission, advertising expenses and legal expenses of the sale;
1.5.2to pay out and discharge the mortgage to St. George bank;
1.5.3to pay the money to the wife together with interest calculated at the rate provided by the Family Law Act Rules for the time being, such interest to date from the date which is forty two (42) days after the making of this Order;
1.5.4to pay the balance to the husband.
1.6That if the former home is not sold by private treaty within a period of four (4) months after the date of this Order, then the parties shall join in and do all things necessary to cause the former home to be sold by auction and in particular:
1.6.1within fourteen (14) days after the expiry of the four month period:
1.6.1.1to agree upon and appoint a real estate agent or failing agreement to appoint the real estate agent nominated by the President of the Real Estate Institute of New South Wales or her nominee;
1.6.1.2to give instructions to the appointed real estate agent to sell the former home by auction at the earliest possible date but not to exceed two months after the date of giving those instructions;
1.6.1.3to execute all documents that the appointed real estate agent requires for the purpose of the auction sale;
1.6.1.4to agree on a reserve price or where there is no agreement, the reserve price to be determined by the appointed real estate agent;
1.6.1.5give instructions to a Solicitor to prepare a Contract for Sale and to make a copy available to the appointed real estate agent prior to the auction;
1.6.1.6the husband to provide the appointed real estate agent such funds as may be required to cover advertising expenses;
1.6.2The parties shall thereafter do the following:
1.6.2.1co-operate with the appointed real estate agent by making a key available, allowing the former home to be inspected by prospective purchasers and ensuring that the home is in a neat and clean condition at the time of inspection;
1.6.2.2attend the auction;
1.6.2.3if the reserve price is not reached negotiate with the highest bidder and if necessary comply with the appointed real estate agent’s advice to accept a price less than the reserve price;
1.6.2.4execute the Contract for Sale;
1.6.2.5execute all other necessary documents to complete the sale;
1.6.2.6execute all necessary documents to cause the proceeds of the sale to be disbursed in the following order:
1.6.2.6.1to pay out and discharge the mortgage to St. George Bank;
1.6.2.6.2to pay the money to the wife together with interest calculated at the rate provided by the Family Law Act Rules for the time being, such interest to date from the date which is forty two (42) days after the making of this Order;
1.6.2.6.3 to pay the balance to the husband.
1.7That pending the transfer to the husband of the wife’s interest in the former home or alternatively completion of the sale the wife to have exclusive use and enjoyment of the former home subject to she:
1.7.1keeping the land in good repair and tidy condition having regard to its present condition;
1.7.2keeping all improvements insured to their full insurable value;
1.7.3paying the mortgage repayments, rates and all other outgoings as and when they fall due.
1.8That if required, the wife have the conduct of the sale and instruct solicitors to act on the sale.
1.9That a base amount of $50,000.00 is allocated, as required by Section 90MT(4) of the Family Law Act 1975 (“the Act”) to the wife out of the husband’s interest in [A] Superannuation Fund (“[A Super]”).
1.10That in accordance with Section 90MT(1)(a) of the Act, whenever a splittable payment within the meaning of Section 90MT of the Act becomes payable to or on behalf of the husband from his interest in [A Super]:
1.10.1the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
1.10.2the husband’s entitlement and the entitlement of such other person to whom a splittable payment may be made out of the husband’s interest in [A Super] is correspondingly reduced.
1.11That the trustee of [A Super] (“the trustee”) do all such acts and things and sign all such documents as may be necessary to:
1.11.1calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement for the wife created by paragraph 1.10.1 of this Order; and
1.11.2pay the entitlement whenever the trustee makes a splittable payment out of the husband’s interest in [A Super].
1.12That this Order have effect from the operative time and the operative time is four (4) business days after the service of a copy of this Order on the Trustee.
1.13That on or before fourteen (14) days after the date of this Order, the husband must instruct the Trustee to pay him a lump sum from [A Super] upon his retirement and the husband is restrained from giving instructions to the Trustee to pay him a pension on his retirement from [A Super].
1.14That the husband is restrained from giving the Trustee a binding death nomination in favour of any person which would have the effect of in any way reducing the value of the wife’s entitlements as calculated by the Trustee in accordance with paragraph 1.11.1 of this Order.
1.15That the husband must indemnify the wife in respect to any loss suffered as a result of any failure of the husband to comply with paragraphs 1.13 and/or 1.14 of this Order.
1.16That the husband be relieved of his obligations pursuant paragraphs 1.13 and/or 1.14 of this Order if the Trustee has rolled over or transferred the transferable benefits out of the husband’s interest in [A Super] to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
1.17That the parties and the Trustee have liberty to apply on seven (7) days notice in respect to the implementation of this Order.
1.18That within 14 days after the date of this Order, the husband and wife to do all acts and things necessary to close the account held in the joint names of the parties held at St. George Bank account no. […] and pay the proceeds of the said account to the wife.
1.19That within 14 days after the date of this Order, the wife shall do all acts and things necessary to transfer to the husband her right title and interest in and to Caravan registered no. […] and the husband shall indemnify and keep indemnified the wife in respect to all liabilities relating to the said caravan.
1.20That except as otherwise provided in this Order and as between the parties, the parties shall have the sole right title and interest at law or in equity in all other property and financial resources presently in their respective possession, power or control, including but not limited to money, shares, real property, motor vehicles, furniture, furnishings, personal effects, superannuation entitlements and entitlements related to their employment and each party covenants to sign any necessary documentation to transfer such property to the party in possession, power or control of same.
1.21That except as otherwise provided in this Order, the husband and the wife each indemnify the other in respect of any and all liabilities attaching to the property and financial resources to which that party is entitled under this Order and in respect of any and all liabilities in the sole name of that party.
1.22That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to this Order.
1.23That in the event of either party refusing or neglecting to sign within fourteen (14) days after receipt of a written request to do so, any documents necessary to put into effect this Order, the Registrar of the Newcastle Registry of the Family Court of Australia is hereby appointed pursuant to Section 106A Family Law Act to do all acts and things necessary to give validity and operation to the said documents, instruments or writings so as to effect compliance with this Order.
1.19That the husband pay the wife’s costs of and incidental to these proceedings.
In accordance with his Amended Response to an Application for Final Orders filed 11 October 2007 the husband seeks:
RE: [THE B PROPERTY]
1The husband must:
1.1Within 2 months of the date of the making of the Orders herein pay $170,000.00 to the solicitors for the wife, for and on behalf of the wife.
1.2Within 2 months of the date of the making of the Orders herein do all acts and things and sign all documents so as to release the wife’s responsibility pursuant to the mortgage by St. George Bank Limited to the parties.
1.3In the alternative to Clause 1.2 within 2 months do all acts and things and sign all documents so as to discharge the mortgage to St. George Bank Limited secured over the home.
1.4Upon the transfer of the home, indemnify the wife in respect of all payments whatsoever including the mortgage and the rates and charges arising out of or connected with the home.
2The wife must:
2.1At the same time as compliance by the husband with clause 1.1 do all acts and things and sign all such documents provided by the husband at his expense, as may be required to transfer to the husband all her right title and interest in the real property known as [the B property] in the State of New South Wales being the whole of the land comprised in Folio Identifier […] ("the home").
2.2Upon payment of the sum referred to in Clause 1.1, or at any time prior thereto, vacate the home, removing therefrom all items of personal property to which she is entitled under the terms of these orders and leaving the home in a good state of repair.
3The solicitors for the wife are restrained from paying to the wife all or any part of the sum referred to in Clause 1.1 pending her departure from the home, as referred to in Clause 2.2.
RE: SUPERANNUATION
4A base amount of $98,873 be allocated, as required by s.90MT(4) of the Family Law Act 1975, to the wife, [THE WIFE] out of the interest of the husband, [THE HUSBAND] in the [A] Superannuation Fund.
5In accordance with paragraph 90MT(1)(a) of the Family Law Act 1975:
5.1The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 whenever a splittable payment becomes payable from the member husband’s interest in the [A] Superannuation Fund; and
5.2The entitlement of the husband, and the entitlement of such other person to whom a splittable payment may be made, to payments out of the interest of the husband in the [A] Superannuation Fund is correspondingly reduced by force of this order.
6The trustee of the [A] Superannuation Fund ("the trustee") shall do all such acts and things and sign all such documents as may be necessary to:
6.1calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement for the wife created by these Orders; and
6.2pay the entitlement whenever the trustee makes a splittable payment out of the interest of the husband in the [A] Superannuation Fund.
7This order have effect from the operative time and the operative time is four days after service of a sealed copy of this order on the Trustee.
8After service of the payment split notice pursuant to r.7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the wife shall do all such things and sign all such documents as may be necessary, including but not limited to, exercising her request pursuant to r.7A.06(1) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer the transferable benefits out of the husband’s interest in the [A] Superannuation Fund to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994 .
RE: ST. GEORGE CASH MANAGEMENT ACCOUNT
9.On settlement of the transfer of the home to the husband, or settlement of the sale of the home, whichever is the earlier, the parties must do all acts and things and sign all documents so as to close the St. George Cash Management Account No. […] and pay the balance to the wife.
RE: FURNITURE
10.Within 28 days the wife make the following item of property currently located at the home available for collection by the husband:
10.1The husband’s father’s pool table.
11.On or before the transfer of the home the husband and wife do all acts and things so as to cause the furniture and contents of the home to be shared between them by mutual agreement, but failing agreement:
11.1The wife do all acts and things necessary to prepare 2 lists of the furniture and contents of the home as at the date of separation and forthwith forward same to the husband, the items contained on each list to be approximate in value to that contained on the other list.
11.2The wife transfer to the husband her interest in whichever of the 2 lists the husband shall choose within 14 days after the receipt by him of such lists and the husband shall do all acts and things necessary to transfer to the wife his interest in the items contained in the other such list.
11.3When the wife vacates the home she must leave the items contained in whichever of the 2 lists the husband chooses pursuant to clause 11.2 and the wife must properly store and maintain such items.
RE: DEFAULT
12.In the event that the wife is ready, willing and able to comply with her obligations pursuant to Clause 2.1 and the husband defaults in payment of the amount due to the wife pursuant to Clause 1.1, then the husband must pay to the wife, in addition, interest on so much as may be outstanding at the rate provided by the Family Law Rules from time to time from the date that payment is due to the date of payment of principal and interest.
13.In the event that the wife is ready, willing and able to comply with her obligations pursuant to Clause 2.1 and the husband defaults for a period of 3 months in payment of the amount due to the wife pursuant to Clause 1.1 then the husband and the wife must do all acts and things and sign all documents, instruments and writings necessary to sell the home for the best price reasonably obtainable.
14.Upon completion of the sale of the home the husband and wife are to hold the proceeds of sale upon trust to pay from the proceeds thereof in the following manner and priority:
14.1All legal costs, auction costs if any, agent's commissions and all other expenses connected with the sale of the home.
14.2Rates adjustments (other than those amounts otherwise payable by one of the parties pursuant to these Orders).
14.3The amount required to discharge the mortgage to the St. George Bank Limited secured on the home.
14.4To the solicitors for the wife, for and on behalf of the wife $170,000.00 plus interest due, if any.
14.5To the husband the balance then remaining.
15Pending completion of the sale of the home:
15.1The wife has the right to occupy the home to the exclusion of the husband.
15.2The wife must pay the water usage charges, the Council and Water Rate instalments and electricity charges and like apportionable outgoings of the home as they fall due.
15.3The husband must pay the mortgage payments and the home building insurance premiums pertaining to the home.
15.4Neither party shall cause or permit the amount of indebtedness whether by way of mortgage, line of credit, overdraft or otherwise secured against the title to the home to increase.
15.5The wife must ensure that she does everything necessary to achieve the highest possible price for the home.
15.6The wife must make a key available and permit inspection of the home by agents and prospective purchasers at all reasonable times and keep the home in a neat and tidy condition and in a state of good repair, having regard to its present condition.
15.7Neither party is to further encumber the home without the consent in writing of the other party.
15.8The parties are to hold their respective interest in the home upon trust pursuant to these orders.
16In order to give effect to Clause 13 it is further ordered:
16.1The husband and wife are to forthwith list the home for sale by Private Treaty with a real estate agent appointed by the husband and wife by agreement and failing agreement with a real estate agent nominated by the President of the Real Estate Institute of NSW or his nominee.
16.2Both parties are to instruct the wife’s solicitor to prepare the Contract for Sale of the home.
16.3The parties must:
16.3.1Execute all documents requested by the agent for the sale of the home.
16.3.2Execute the Contract for Sale.
16.3.3Co-operate in every way with the agent in relation to the sale of the home.
16.3.4Instruct the agent to give each of the parties such information as they or either of them may reasonably require concerning the progress made from time to time with respect to effecting the sale of the home.
16.4In the event that any purchaser having exchanged contracts, rescind such contract under Section 66U of the Conveyancing Act, 1919 the parties are to hold the deposit forfeited under Section 66V(2) upon trust to pay therefrom in the following manner and priority:
16.4.1To pay legal costs and disbursements in relation to such sale.
16.4.2To either the husband or the wife in re-imbursement of any expenses paid in respect of the sale of the home; and
16.4.3The balance to the parties in equal shares.
16.5Liberty be reserved to either party to apply upon 7 days notice to the other party with respect to the terms and conditions contained herein relating to the sale of the home.
RE: MISCELLANEOUS
17Unless otherwise specified in these Orders and as between the parties:
17.1Each party be declared to be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders and that for this purpose Bank accounts are deemed to be in the possession of the person whose name appears on the Bank's record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements, and
17.2Each party shall be declared to be solely liable for and indemnifying the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
18Costs.
At the conclusion of submissions counsel for the husband said that the husband sought that the payment to the wife be $154,517.25 rather than the $170,000 referred to in his Amended Response.
Issues for determination
The issues for determination are:
The amount received by the husband from the proceeds of sale of the R property;
The extent by which the husband’s contributions exceeded those of the wife;
The extent of adjustment in the wife’s favour under section 75(2)
Whether the wife should receive all of her entitlement to superannuation in the form of superannuation or some lesser proportion with an adjustment out of the non-superannuation assets.
Short History
The wife and husband are both 43 years of age. They started to live together in about November 1988, were married in September 1989 and separated in July 2005.
Children
The parties have two children:
Swho was born … October 1991 and as at the date of the hearing was 16 years of age; and
Twho was born … October 1993 and as at the date of the hearing was 14 years of age.
Background Facts
The parties were engaged in October 1988 and started to live together about a month later when the husband moved into the home of the wife’s parents at B.
At that time the husband was working as a tradesman and the wife worked in the retail industry.
The parties’ expenses, including $10 per week for board, were generally met from the wife’s income and the parties saved the husband’s income.
The wife owned a Ford Laser motor vehicle purchased with a loan from Westpac Bank and modest savings. The husband says that the wife owned a Holden Gemini which in 1989 was traded for about $500 on a Ford Laser that cost $10,000. About $8,400 was borrowed from Westpac Bank and the husband paid the deposit of $900 and registration charges of $474.
The husband owned the R property. He had bought that property in November 1986 for $55,000 and had borrowed $45,000 from St George Bank. The husband said he paid the vendor an additional $5,000 to vacate as he was wrecking the place. The R property was rented out for $150 per week and the rent was applied to the mortgage, rates and other outgoings. The husband also had savings in two accounts with the Greater Building Society which as at 31 July 1989 stood at $7,437 and $730.97. As at 7 December 1988 he also had $3,789.59 with St George Bank and $500 in an Elcom Credit Union cheque account. He owned a Ford Falcon motor vehicle which was sold in 1991 for $2,000 or $2,800.
In May 1989 the parties bought vacant land at B for $12,500. The entire purchase price came from the husband’s savings.
The husband sold the R property in August 1989. It is the wife’s case that the husband received a net $51,500 and the husband contends that it was $70,000. The evidence about this is unsatisfactory. The first problem is that in cross-examination the wife conceded that she did not know what the net proceeds were and then conceded that funds applied to the construction of the former matrimonial home included $70,000 received by the husband from the sale of the R property. In his affidavit the husband’s evidence is: “I received about $51,000 in August, 1989 and to the best of my recollection the purchaser paid me another $20,000.00 by way of instalments within 6 months of settlement.” In cross-examination the husband said that the additional moneys went into a different St George Bank account from that into which the $51,000 was deposited. He was not sure it was an additional $20,000 but “up to” that amount. The relevant accounts do not wholly support either case. Statements were produced for two accounts with the St George Bank. On 31 August 1989 account number …2 was opened with a deposit of $49,903.04. I take it that represented at least part of the proceeds of sale of the R property. No further deposits were made into that account until it was closed on 28 June 1990. The other St George Bank account disclosed was …22. The only deposits made into that account in the 6 months following 31 August 1989 were:
31 August 1989 $598.18
1 September 1989 $1,609.50
Just stopping there, the bank statements do not support the husband’s case. In case the husband was mistaken in his estimate of time I have examined the statements for the following six months. In the next 6 month period there were further deposits as follows:
Date of Deposit Amount 16 May 1990 $325.33 23 May 1990 $206.82 30 May 1990 $220.33 6 June 1990 $181.29 13 June 1990 $135.52 18 June 1990 $10,000.00 27 June 1990 $244.51 4 July 1990 $234.28 11 July 1990 $203.22 13 July 1990 $2,000.00 18 July 1990 $287.78 19 July 1990 $120.00 25 July 1990 $230.00 1 August 1990 $254.13 8 August 1990 $352.43 15 August 1990 $334.62 22 August 1990 $205.77 29 August 1990 171.34 Total $15,707.37
The husband’s evidence cannot be reconciled with his own records. The husband did not deposit $20,000 or anything like it, into his other St George Bank account in the six months following 31 August 1989. Indeed the deposits into that account over the 12 months following 31 August 1989, do not total $20,000. The husband has the onus of establishing the facts here. Particularly as his version of events involves a very unusual conveyancing transaction where settlement was apparently spread out over 6 months. The wife’s concession coming as it did at the same time as she said she did not know what the property sold for, is of no assistance. Supporting the husband’s argument is the apparent shortfall between the amount the parties had available from the sale plus the amount they borrowed and the cost of construction of the former matrimonial home. However, the shortfall could have been met from further savings. Indeed “savings” was included in the categories of sources of the construction funds put to the wife in cross-examination. The best I can say is that the husband received at least $52,110.72 from the sale of the R property.
The parties were married on 23 September 1989 and continued to reside in a caravan they bought and located at the home of the wife’s parents. The parties paid no rent to the wife’s parents. The wife paid $10 per week in board. The husband undertook some labouring work for the wife’s parents and built a double car port for them using materials they paid for.
In March 1990 the debt owing on the wife’s car of $6,330.07 was paid out using the husband’s savings.
The parties commenced building a home in June 1990. In October 1990 the parties borrowed $36,500 to put towards the construction. They spent $115,000 on labour and materials, some of which came from the R property sale and the rest from savings. The parties had help from the wife’s brother, Mr D and various friends. Mr D was paid $2,000. They paid a builder $5,865 and his off-sider $2,655.
The wife’s car was sold for $8,000 and the proceeds applied to the construction of a verandah. The husband says it was sold for $6,000 and the proceeds applied to the purchase of concrete for the driveway. Nothing turns on this issue.
In 1991 the husband was made redundant but did not qualify for any redundancy payment. He found work at a reduced salary for 18 months. In 1991 the husband sold his Ford XF Falcon for $2,800 or $2,000 and bought a Holden VP Commodore station wagon for $13,000.
In 1992 the husband moved to N Trading Pty Ltd for a further 18 months.
In 1993/94 the parties laid a slab in the back yard for a BBQ area.
In about November 1994 the husband left N Trading Pty Ltd and commenced working with his current employer, I Company.
In 1995 the parties enclosed the BBQ area.
In 1996 the parties had an in-ground swimming pool installed. It cost $15,000 and the parties borrowed $18,000 from the St George Bank.
The wife left paid employment in about April 1991 under doctor’s orders. The child S was born in October 1991.
The child T was born in October 1993.
The parties opened accounts for the children including an education account.
In 1999 the parties bought a Toyota Prado motor vehicle.
At some point the husband purchased a share of a boat shed at C for $5,000.00 with his brother-in-law, Mr K.
In October 2004 the parties bought a caravan for $14,600 using the St George Portfolio loan,
In December 2004 the parties bought a one half share in property at M for $80,000.00 using the Portfolio Loan Account with St George Bank. They intended to build a Duplex on the property.
The parties separated in July 2005 when the husband moved out of the former matrimonial home. At that time they owned:-
The B property
The M property
1987 Toyota Prado
Holden Commodore (H)
Portfolio Management Account $13,113.70
Freedom Savings Account (H) $8,300.00
Pensioner Account St George
Bonus Saver Account Westpac
(Education Account) $11,500.00
Household contents
Boat shed
Viscount Caravan
Racehorse
At that stage the parties had the following liabilities:
Portfolio Loan Account
with St George Bank $99,100.00
The husband’s superannuation stood at:-
A Super (H) $155,304.00
AMP Flexible Lifetime (H) $4,595.34
At first the parties continued to operate the joint accounts with the wife having unrestricted access for her expenses. The husband then paid child support by agreement having regard to discussed variations to the assessment. The husband was paying additional expenses including medical and mortgages, car expenses. The wife retained possession of the Prado motor vehicle and occupation of the home and she paid no mortgage payments.
In September 2005 the husband’s old Commodore broke down. He leased a 2005 Commodore with his employer’s assistance.
In October 2005 the husband ceased operating on the St George Bank account. At that time there was a balance of $7,500.00 in the account.
In January 2007 the husband bought the L property. He paid $206,800 and funded the purchase with a mortgage with St George Bank of $186,090, a loan from his sister in the sum of $5,688 and a loan from his mother in the sum of $3,000. The husband paid a deposit of $10,000.00 from his savings. The balance of the cost of the property of $2,022 also came from the husband’s savings.
On 7 May 2007 the parties sold the M property. They received a net $73,518.00 which decreased the Portfolio Loan Account to $25,590.00.
In June 2007 the husband transferred the Toyota Prado motor vehicle to the wife. He ceased depositing $100.00 per week into the education account.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties and the wife’s father.
There is only one significant issue of fact, the amount received by the husband for the R property. That issue could not be resolved on the basis of credit.
Submissions
The submissions made on behalf of the wife are to the effect that there should be a division of property of 58% to her and 42% to the husband. This is warranted by reference to contributions favouring the husband 52% compared to 48% by the wife and a 10% adjustment for the other matters in section 79(4). I gather that the contribution result would be based on the husband’s initial contribution of the R property. As to the adjustment of 10% to the wife, it is argued that the section 75(2) factors overwhelmingly favour her in that she has no recent employment history, due to the marriage, minimal earning capacity and no particular skills. The children live mostly with her. On the other hand it is argued that the husband has stable well-paid employment with significant superannuation entitlements. The husband seeks to retain the former matrimonial home whereas the wife wants to buy land and build. The wife wants to take a reduced superannuation split based on $50,000 and to take more of the non-superannuation assets.
The written submissions made on behalf of the husband are:
CONTRIBUTIONS
The husband made a significant and greater initial financial contribution as follows:
The R property subject to a mortgage to
St. George. Later sold for Net $70,000.00
Ford XF Falcon $10,000.00
Savings Greater $ 7,437.04
Savings Greater $ 730.97
Savings St. George $ 3,789.59
Savings Elcom $ 500.00
Total: $92,457.60
Superannuation
Furniture and personal effects
The husband made significantly greater financial contributions during the relationship by virtue of his significantly greater income.
The husband made a significant non-financial contribution by virtue of his owner building the home at B and being involved in significant renovations and improvements including verandah, enclosed barbecue area and pool.
The husband made a significant contribution as homemaker and parent to the parties’ two children to assist the wife’s role as a primary caregiver.
Post separation the husband has made a number of payments for the benefit of the wife.
SYNOPSIS ON CONTRIBUTIONS
Overall the husband has contributed more than the wife in the vicinity of 60/40.
SECTION 75(2) AND OTHER MATTERS
The parties are the same age enjoy reasonable health and both have a capacity to earn income.
The husband has the greater income earning capacity.
The parties have a style of shared residence with the wife having a greater responsibility for care.
The husband has and will continue to pay a significant amount of child support.
The wife will receive a significant amount of property as a result of the contribution finding.
SYNOPSIS ON SECTION 75(2) AND OTHER FACTORS
There ought to be a small adjustment to the wife ought to be arguably around 2.5%.
OVERALL
Overall the result ought to favour the husband in the vicinity of about 55 to 45%.
EFFECT OF ORDERS SOUGHT
The husband receives:
The B property $350,000.00 The L property $200,000.00 St. George … $7,600.00 Greater … $225.00 Holden 2004 $22,000.00 Racehorse Nil Caravan $12,000.00 Boat shed $5,000.00 TOTAL: $596,825.00 Less mortgage $190,000.00 Orix $26,000.00 Portfolio loan account St George $24,785.00 Loan husband to his mother and sisters $10,000.00 Payment to wife $140,000.00 NET ASSETS HUSBAND $206,040.00
A Super $219,614.00 AMP rollover $6,543.00 Less superannuation split to wife $98,873.00 TOTAL SUPERANNUATION HUSBAND $127,284.00 ASSETS INCLUDING SUPER HUSBAND $333,324.00 Wife receives:
Payment from husband $140,000.00 St George …0 $9,800.00 Household contents $15,000.00 St George …8 $4,400.00 Westpac education account $5,000.00 Toyota Prado $10,000.00 TOTAL ASSETS WIFE $184,200.00 In addition the wife will receive superannuation as follows:
REST (W) $4,002.00 Superannuation split from husband $98,873.00 TOTAL SUPERANNUATION WIFE $102,875.00 ASSETS INCLUDING SUPERANNUATION WIFE $287,075.00
Those calculations changed somewhat in the final analysis. It is submitted for the husband that the impact of the children on the wife is reducing because of their age and because they are likely to lived with the husband more often when he returns to the B home. There is no evidence that the wife needs any particular sum to re-house herself and therefore she should take a proper share of the superannuation in the form of a splitting order.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify 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 a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 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. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties at the date of the hearing.
The parties have agreed that the relevant assets and liabilities are as set out below. They have agreed to ignore certain assets and associated debts. For example they have omitted reference to the husband’s L property and borrowings associated with that property. The assets are:
Non Superannuation Assets Value The B property $380,000.00 Joint St. George Bank account …0 $9,800.00 Westpac Education Account Joint $6,300.00 W’s St. George Bank Account …8 $4,400.00 Toyota Prado W $10,000.00 Household contents W $7,000.00 Husband’s St. George Bank account …9 $17,000.00 Caravan H $12,000.00 Boat shed H $5,000.00 Total $451,500.00
Superannuation Assets Value A Super H $228,453.00 AMP Super H $6,559.00 Rest Super W $4,002.00 Total $239,014.00
Liabilities:
The parties agree that the relevant liability is:
Liabilities Amount Portfolio loan account with St George Bank $24,795.00 $24,795.00
Net assets
The net non-superannuation assets have a value of $426,705 ($451,500 - $24,795). The superannuation assets have a value of $239,014.
Financial Resources
The husband has an entitlement to long service leave which as at 26 September 2007 stood at 27.6906 weeks. There is no evidence that the husband is able to cash that leave out or that he is inclined to do so. There is no evidence that either of the parties has any other financial resources.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[2]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[3].
[2] Mallett & Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[3] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should assess contributions asset by asset or globally the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
A separate pool for superannuation
56. In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
None of those features apply here. The Full Court goes on at page 429 to say:
[63] However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the regulations if a splitting order is sought in any application before the court, or if no such order is sought, valued either according to the regulations or otherwise)….
I will apply the preferred approach.
In In the Marriage of Coghlan the Full Court said that where the list of assets is divided into superannuation and non-superannuation assets, the assessment of contribution must be undertaken in relation to each list:
[64] Then for the reasons we earlier gave, whether or not a splitting order is sought on either party’s application, the parties’ contributions to both the property (as defined in s 4(1)) and also to the superannuation interests should be assessed. The other factors in s 79(4)(d), (e), (f) and (g) would then need to be considered. Specifically in the context of s 79(4)(e), that is the s 75(2) factors, any division of the property (as defined in s 4(1)) and any “division” of any superannuation interest (in the sense of an allocation of the base amount) based respectively on the assessments of the parties’ contributions to the property and to any superannuation interest, would then be considered. Similarly, the parties’ future superannuation prospects (be they in capital or income form) would also need to be considered. The overall justice and equity of the ultimate award (including any proposed splitting order or the need for such an order) would then be considered
Thus the assessment of contributions will be undertaken on the basis of two pools of assets: Superannuation and Non-Superannuation assets.
Contributions to Superannuation Assets
Section 79(4)(a) Contributions
The husband had a modest superannuation interest at the commencement of the marriage. In cross-examination he thought it would have been less than $10,000. The parties each made direct contributions to superannuation thereafter. The husband’s superannuation interest increased by about $75,000 after separation. It was the parties’ arrangement that the husband retained full-time employment and that the wife was out of the paid workforce for a significant period.
Section 79(4)(b) contributions
There is no evidence of non financial contributions to superannuation.
Section 79(4)(c) contributions
During the marriage and particularly for the periods when the wife was out of the paid workforce, her contributions as parent and homemaker allowed the husband to make provision for his superannuation. Her contributions continued after separation and the fact has been that the children spent significantly more time with the wife than with the husband.
Conclusion on Contribution to Superannuation Assets
The wife’s case was argued on a one pool basis. Therefore it is argued that her contributions to superannuation represent 48% compared to 52% by the husband. Although it is not reflected in the written submissions I was told that the husband’s case was argued on a two pools basis. For the husband it is submitted that the imbalance of contributions to superannuation were greater than those argued for on behalf of the wife. He had a small initial interest and since separation there has been a significant increase in the value of his superannuation.
The husband’s contributions to superannuation were greater than those of the wife. The husband’s initial superannuation is not significant after all this time. The contributions should be seen as equal while the parties were together. The husband’s direct contribution since separation is offset to some extent by the wife’s parent and homemaker contribution in that period. In my view the contributions to the pool of superannuation of the wife and on her behalf were 45% compared to 55% by and on behalf of the husband.
Contributions to the other non-superannuation assets
Section 79(4)(a) Contributions
Financial contributions were made by and on behalf of each of the parties.
The wife was in paid employment from the commencement of cohabitation in November 1988 to April 1991. The husband contends that she earned about $16,000 per annum.
The financial contributions by the husband were:
Initial contributions of:
oThe husband’s equity in the R property which crystallised on sale in August 1989 at, at least $52,110.72;
osavings of about $12,458 (two accounts with the Greater Building Society which as at 31 July 1989 stood at $7,437 and $730.97. As at 7 December 1988 he also had $3,789.59 with St George Bank and $500 in an Elcom Credit Union cheque account);
oa Ford Falcon motor vehicle sold in 1991 for $2,000 or $2,800
Income:
othe husband remained in full-time paid employment throughout the marriage. He was earning about $90,000 a year when the parties started living together. From 1991 to November 1994 he earned about $50,000 per annum and since that time has earned between $100,000 and $120,000 per annum.
Much was made in the wife’s case of the fact that for periods since separation the husband has paid her less than the assessed rate of child support. She gives details about the various changes and how she agreed to them although reluctantly or under some pressure. The husband would argue that the wife had other benefits, including the ability to reside, rent free at the former matrimonial home. Nothing turns on the difference between the paid amount and the assessed rate. The wife could have enforced the assessment. I take into account that the husband paid various amounts by way of child support since separation.
Section 79(4)(b) contributions
From the commencement of cohabitation in November 1988 to April 1991, when the parties moved into the B property, the parties lived without any significant cost at the property owned by the wife’s parents. The husband undertook some labouring work for the wife’s parents and provided the labour for the erection of a double car port.
With the assistance of friends, family members and some tradespeople the parties built a house and made other improvements on the B property.
Despite both being in paid employment, the parties were directly involved in the physical work associated with the development of the B property. It is likely that the husband had a greater role to play than the wife because he has relevant training and skills. That is not to say that the wife played a minor role. She gives evidence of labour including clearing the building site and sweeping up rubbish on Tuesdays and Sundays, handling bricks, carrying concrete blocks for the pool fence. The wife was not challenged about this evidence, nor about the parties sharing fairly equally the physical work of establishing the gardens.
Section 79(4)(c) contributions
There are two children of the marriage. There is no real conflict between the parties on the issue of parent and homemaker contributions. The general roles involved the husband as wage earner and the wife as the person mainly responsible for the children and the household. By the same token the wife concedes that when the husband was available, he would help with the children. He occasionally changed nappies and fed the child S her bottles but his main involvement was playing with her and watching videos with her.
The child T was an extremely unsettled infant. He cried incessantly and could not be consoled. The wife took him to doctors, an iridologist and a food allergist. It transpired that he was allergic to a number of different foods, including cows milk. The main role in relation to these matters fell to the wife. It took two years to reintroduce T to the foods to which he had been allergic.
Conclusion
It is agreed that the husband’s contributions exceeded those of the wife. It is submitted for the wife that her contributions to this pool of assets were 48% compared to 52% by and on behalf of the husband. It is submitted for the husband that the contributions to the non-superannuation assets were made in the proportions 60% by the husband and 40% by the wife.
But for the initial contributions, the evidence would support a finding that the parties’ contributions were equal. In a case involving more than 15 years of cohabitation, care is needed in identifying the extent of the disparity of contributions. In a net pool of $426,705 the initial injection of a total of more than $65,000 by the husband warrants appropriate recognition. My task is not a mathematical exercise and there is no concept of erosion of contributions made earlier in the marriage. I am to assess the respective contributions and to give them appropriate weight.
There is a relevant discussion about the approach taken to this sort of weighing exercise in In the Marriage Pierce (1998) 24 Fam LR 377. In that case the trial judge had found that the parties had contributed in the proportions 55% by the husband and 45% by the wife in circumstances where, at the date of the trial, the parties had assets of a net value of $319,190 but the husband came into the marriage with assets to the approximate value of $226,000. The pool included the matrimonial home valued at $260,000 to which the husband had contributed about $200,000 from moneys to which the wife had made no contribution. In re-exercising the discretion the Full Court put the balance of contributions at 70%: 30%. Every case is dealt with on its own facts but the approach taken in Pierce is helpful.
In the case before me the husband’s initial contributions gave the parties a wonderful start. They were able to secure the former matrimonial home less than three years after the commencement of cohabitation and with manageable borrowing. In my view a proper reflection of the importance of the husband’s initial contribution in the context of this case would be a finding that the contributions were made in the proportions 55% by the husband and 45% by and on behalf of the wife.
The other matters in Section 79
In the passage of In the Marriage of Coghlan quoted above the Full Court went on to say that once contributions have been assessed in relation to each of the superannuation and non-superannuation assets, the other factors in section 79(4) need to be considered
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties..
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (b), (c), (k) and (na).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The parties are both 43 years of age. The husband says that he enjoys good health.
The wife enjoys reasonable health. She has seen a specialist in relation to her back.
(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 wife’s income is $631 per week made up of Centrelink payments of $253, Family Tax Benefit A of $41, Family Tax Benefit B of $37 and Child Support payments of $300. But for the parties’ children, the wife lives alone. The children have no income.
The wife’s fixed expenses are as follows:
Expense Amount Land rates $17.00 Water rates $14.00 Motor vehicle registration – Toyota Prado … $12.00 Total $43.00
Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
As to her earning capacity, the wife has not had paid employment since April 1991. She does not have an unqualified medical history. She suffered from a condition related to her nervous system soon after leaving school and was out of paid employment for 2 years. She has seen a specialist about pain in her back. In 2005 Dr X, who I think is a Radiologist, identified several spinal disc protrusions, narrowing of the spinal canal and mild spondylosis (degeneration of the spine). The wife’s general practitioner told her to be careful and avoid straining her back. The last time she was unable to walk due to back pain was prior to separation, in July 2005 when she was bedridden for 2 or 3 days. The wife has an appointment with Mission Australia in November 2007 in relation to her options for retraining and paid employment. She says that she does not believe that she will obtain paid employment that will pay more than minimum wages. The living and schooling arrangements for the children must restrict the wife’s availability to some extent. On the basis of her concession, the wife has the capacity to earn a modest wage.
The husband earns $2,250 per week made up of his salary with I Company. The husband’s fixed expenditure is as follows:
Expense
Amount Income tax $806.00 Superannuation contributions $50.00 Mortgage $297.00 Rates $25.00 Salary continuance insurance $46.00 Private Health insurance $45.00 Home insurance – CGU $8.00 Home and contents insurance - AAMI $10.00 Hire Purchase on motor vehicle $319.00 Child Support payments $300.00 All other expenditure $250.00 Total $2156.00
There is no break-up of the husband’s living expenses. Evidence about his assets, liabilities and resources is set out earlier in these reasons.
It is not suggested that the husband is not fully exercising his earning capacity. As I understand it the husband has had unbroken service with the same employer for 13 years to date.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
The parties share the care and control of the children with the children living with the wife for significantly greater periods than they live with the husband. They are with the husband or his family for one half of the school holidays and for two weekends every five weeks from Friday afternoon to Monday morning. The husband contends and the wife rejects that the children spend one or two nights with the husband during the week every few months. The husband asserts that the children will spend more time with him in the future and that there is an agreement between the parties about this. The wife rejects that evidence. There is no basis on which I can find that the children will be living more with the husband than they have in the past.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the parties fixed expenses but they have provided no evidence about the detail of their living expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
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;
Each of the parties has superannuation interests. They are the same age and have at least 10 years until they could access those interests. The wife is in receipt of Centrelink benefits.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is little evidence in relation to the standard of living of the parties during the marriage.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no evidence that either of the parties intends to undertake further study although that could be recommended at the wife’s November appointment with Mission Australia.
(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;
(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;
The wife gave up paid employment in 1991 and has not returned to paid employment since. Her last job was in retail where she had a management role. Her absence from the workforce is likely to mean she can only aspire to base level income. When she did work she did not command a level of remuneration comparable to that earned by the husband at that time or since. She has no doubt lost the benefits of unbroken paid employment. They include the opportunity for promotion or progression, long service and other leave entitlements and the establishment of employer funded superannuation entitlements. The marriage adversely affected her earning capacity.
(l) the need to protect a party who wishes to continue that party's role as a parent;
It is part of the wife’s case that she wishes to continue to be involved in the supervision of the children. With the children at 14 and 16 the need for that supervision will diminish in the next few years.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
Neither of the parties lives with another adult. The wife enjoys a relationship with Mr J. He sleeps at the wife’s home two nights a week. She sleeps at his house sometimes. The wife does not plan to marry him or to live with him. They do not share finances but Mr J fixes things at the wife’s home that are broken. The wife was very emphatic in her evidence about Mr J. The question of a party cohabiting with another and the financial circumstances of that relationship is often an important one. It is particularly important in a case such as this where the wife relies on the likely difficulty she will have, compared to the husband, in securing suitable accommodation. Having said that the wife was not shaken in her evidence and I am obliged to accept it.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(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
I have referred to the fact of child support payments. The current payment is around $300 per week. An assessment issued on 25 October 2007 at $2,126 per month for the period 1 November 2007 to 31 January 2009. That is about $490 per week. I understand that to be a slight increase on the previous assessment.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Nothing comes to attention under this provision.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
This is not relevant.
Conclusion
The wife seeks a 10% adjustment in her favour and the husband thinks it should be in the range of 2 ½% to 5%.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø The parties are at a similar time of life;
Ø As is often the case, one of the most valuable ‘assets’ of this marriage is the husband’s unbroken history of well paid, secure employment. If the wife can successfully return to paid employment, she cannot aspire to remuneration of the order of that received by the husband.
Ø The wife has some degenerative problems with her back but has reasonable health;
Ø The children live more of the time with the wife than the husband;
Ø The husband is a PAYE wage earner and will be required to pay a proper level of child support;
Ø The calculation based on contributions alone would leave the husband with more of the superannuation and non-superannuation assets;
Ø The parties are not likely to be able to access their superannuation for many years;
Ø The division based on contribution alone would leave the husband with more assets than the wife.
In my view there should be a 10% adjustment to the wife in relation to the non-superannuation assets by virtue of the other matters in section 79(4). The key factor is the husband’s earning capacity. 10% of the net non-superannuation assets are about $42,680 and a 10% adjustment makes a difference of twice that sum – just over $85,000, between the parties. The point of this adjustment is not to put the parties on an equal footing. An adjustment of that order will be made up by the husband in a few short years.
In relation to the superannuation, I confess, I do not really understand the submissions made on behalf of the parties. Although the splitting order sought on behalf of the husband seems to be calculated on slightly different amounts for superannuation than those ultimately agreed, his proposal would seem to give him about 55% of the superannuation. As I understand the wife’s proposal neither the split based on $100,000 as earlier sought for the wife, nor that based on $50,000 as now sought, represent any particular proportion of the superannuation.
In my view there is no reason for treating the adjustment to the superannuation assets differently from that to the non-superannuation assets. The same considerations apply. In the case of superannuation the husband alone is likely to make significant further contributions. He is already using the device of salary sacrifice to enhance the value of his contributions. There should be a 10% adjustment to the wife.
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of superannuation property is a division that is about 55% to the wife and 45% to the husband. The pool of non-superannuation assets should be divided in the proportions 55% to the wife and 45% to the husband. Finally, I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
Each of the parties seeks a splitting order in relation to the husband’s superannuation. In order to improve the wife’s chances of retaining the home it is submitted for the wife that there be a splitting order relying on a reduced base amount and that the superannuation imbalance be adjusted out of non-superannuation assets. There is no evidence to assist with this exercise. The wife does not say what amount she needs to buy land and build a house, nor what access she is likely to have to further funds from friends, family or a lending institution. Nevertheless, I accept that it will be more difficult for her to secure appropriate accommodation.
In amending the Family Law Act1975 to permit the splitting of superannuation payments the Parliament has indicated a preference for dealing with superannuation by splitting superannuation payments. The policy aims include the priority placed on there being better provision for self-funded retirement. Given that superannuation interests cannot normally be accessed and dealt with as easily as other assets it is often unfair to require one party to retain a disproportionate amount of the superannuation interests and the other to retain a disproportionate amount of the non-superannuation assets.
The Court can take judicial notice of the fact that recent changes to the law including the reduction in tax paid on superannuation income after 60 years of age may have reduced the disadvantages of taking funds in the form of superannuation compared to accessible assets. Nevertheless, I cannot lightly leave the husband with a disproportionate amount of his superannuation. On the other hand, there is a discretion to be exercised in relation to the proportions in which the parties retain a superannuation interest. The fact is that whatever I do the wife is unlikely to be able to generate a self-funded retirement by way of superannuation. With the scope for salary sacrifice arrangements and his stronger starting position, the husband is likely to be able to make a proper provision for his retirement. In my view some splitting order is appropriate but I will only reflect on half of the wife’s superannuation entitlement in the form of superannuation and will adjust the rest from the other assets.
The superannuation assets have a value of $238,014. The wife’s entitlement pursuant to section 79 as identified above is 55% or $130,907.70. She already has $4,002 in her own superannuation fund. To bring her to 55% she should receive $126,905.70. If she is to receive only one half of her entitlement in the form of a splitting order then the base amount for the splitting order will be $63,452.85. That will result in a reduction in the relevant payment to the husband.
An allowance must then be made in the division of non-superannuation assets for the difference between the wife’s entitlement to superannuation based on section 79(4) and the reduced based amount if have identified. I will come to that shortly.
The non-superannuation assets have a net value of $426,705. 55% of that is $234,687.75. The wife’s superannuation split will be based on an amount nearly $63,500 less than her entitlement. In making an adjustment out of the non-superannuation assets, in my view it is not a matter of dollar for dollar. There should be some discounting for the fact that the husband will wait many years to access all of his superannuation. I will allow an adjustment against the non-superannuation assets of $50,000 in the wife’s favour.
Thus the wife should receive $284,687.75 from the non-superannuation assets. The wife has or has had the benefit of:
Non Superannuation Assets Value Joint St. George Bank account …0 $9,800.00 Westpac Education Account Joint $6,300.00 Wife’s St. George Bank account …8 $4,400.00 Toyota Prado W $10,000.00 Household contents W $7,000.00 $37,500.00
Therefore she would need to receive from the husband $247,187.75. I will round that amount down to $247,000.
That would leave the husband with the benefit of:
Non Superannuation Assets Value The B property $380,000.00 Husband’s St. George Bank account …9 $17,000.00 Caravan H $12,000.00 Boat shed H $5,000.00 Portfolio loan account with St George Bank -$24,795.00 Payment to wife -$247,000.00 $142,205.00
On the making of a splittable payment from his fund, there will be a payment to the wife calculated on a base amount of $63,452.85 and a consequential reduction in the payment to the husband.
In my view, the outcome I have identified would be a just and equitable result.
Conclusion under Section 79
I will make orders whereby the parties retain what they have, the husband pays to the husband $247,000 and there is a splitting order in relation to the husband’s superannuation interests, in favour of the wife with a base amount of $63,452.85. In the event that the husband is unable to pay the wife $247,000 the B property will be sold. In order that the parties share in any profit or loss caused by any variation between the net sale price and the value agreed for the property for the purposes of these proceedings, I will express the distribution of the net sale proceeds in terms of percentages. The agreed value is $380,000. $247,000 is 65% of the agreed value. In the event that the property has to be sold the net proceeds will be divided in the proportions 65% to the wife and 35% to the husband.
I certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate
Date: 2 November 2007
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