Carpenter and Carpenter
[2016] FCCA 721
•1 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CARPENTER & CARPENTER | [2016] FCCA 721 |
| Catchwords: FAMILY LAW – Property Settlement – Superannuation – Parties entered into an informal property agreement at separation which was not perfected – Proper for Court to exercise its discretion under Section 79 to alter the parties’ interest in their property including superannuation. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 |
| Applicant: | MS CARPENTER |
| Respondent: | MR CARPENTER |
| File Number: | SYC 4189 of 2014 |
| Judgment of: | Judge Henderson |
| Hearing date: | 24 March 2016 |
| Date of Last Submission: | 24 March 2016 |
| Delivered at: | Sydney |
| Delivered on: | 1 July 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Duane |
| Solicitors for the Applicant: | Blackman Legal |
| Counsel for the Respondent: | Mr Dura |
| Solicitors for the Respondent: | Moisson Legal |
ORDERS
Pursuant to 90MT of the Family Law Act that whenever a splittable payment becomes due and payable to the husband from his (omitted) private superannuation fund, the sum of $82,263 is to be paid to the wife.
The husband within three months pays to the wife the sum of $121,640.
Otherwise the parties to retain absolutely all assets currently in their possession or control.
IT IS NOTED that publication of this judgment under the pseudonym Carpenter & Carpenter is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4189 of 2014
| MS CARPENTER |
Applicant
And
| MR CARPENTER |
Respondent
REASONS FOR JUDGMENT
The matter of Carpenter is a property application commenced by the wife on 9 July 2014. Mr Duane of Counsel appeared for the applicant wife and Mr Dura of Counsel appeared for the respondent husband.
The material I read was as follows.
a)For the wife
i)Application filed 8 July 2014;
ii)Affidavit and financial statement for the trial filed 7 March 2016; and
iii)A case outline prepared by Counsel which also included a balance sheet.
b)For the husband
i)Affidavit and financial statement filed 4 March 2016. The husband’s affidavit consisted of an extraordinary number of exhibits; and
ii)Amended application in a case which was his response.
The wife’s case is that the parties ought to retain the assets they currently have in their possession subject to the following. The husband to pay to her a sum of $120,000 and that there be an equal division of the superannuation each currently holds. This would result in a splittable payment of the husband’s superannuation to her to of $86,000.
The husband asserts that the manner in which the parties currently hold their property currently remain and I not interfere with that position.
The short, relevant facts are as follows;
a)There are two children of the marriage, X aged 21, and Y aged 18.
b)The parties were married on (omitted) 1994.
c)The parties separated on a final basis in July 2010, but remained living under the same roof until 2011 when the husband vacated the former matrimonial home
d)The decree nisi of the dissolution of their marriage was pronounced on 15 April 2014 becoming final on the 16 May 2014.
e)Both parties agree that at the commencement of cohabitation, neither of them had assets of any great value.
f)At separation the husband asserts the parties entered into an agreement to sell the former matrimonial home and divide the proceeds of sale equally and they carried out this agreement.
The issue for determination
The issue for determination is;
a)Whether I should interfere with that decision or leave matters as they now are.
The husband asserts that at the time of the agreement this was, on any reading of the evidence, a ‘just and equitable’ division of their property and that the only adjustment the court would perhaps make is in relation to superannuation. Further, if this be the case, it would be adjusted on the value at the date of separation and not on the basis of current values.
The wife agrees that at separation she and her husband agreed to divide the proceeds of sale of their former matrimonial home and superannuation equally but that such an agreement is not a final property order under Section 79 of the Family Law Act[1]. Secondly, she asserts that the parties did not perfect their agreement in any event as they did not make any super splitting orders, a flagging order or in any way deal with their superannuation entitlements.
[1] Family Law Act 1975 (Cth), s 79
Thus she asserts the Court ought to now exercise its discretion under Section 79 of the Act and effect a ‘just and equitable’ division of the party’s property.
The evidence
The husband contends he has made a superior financial contribution to the parties’ current assets in the past in that his parents were exceedingly generous with him and wife which contributed to the welfare of the family. They paid for the children’s (hobbies omitted) and provided large sums of money at times to assist in purchasing or renovating properties. The husband acknowledges the wife’s parents also made a contribution to the welfare of the family in the past, however, asserts his parents’ contributions were greater than that of the wife’s.
The husband asserts that post-separation or post-his leaving the matrimonial home in 2011 and until it was sold, his contribution was superior to the wife for the following reasons;
a)He continued to pay the mortgage to enable the wife and children to remain in the home.
b)That he has paid over and above what his obligations would have been under the child support regime as he has solely supported the children when they lived with him at times to the exclusion of the wife.
The wife’s case is that post-separation, the husband contributed to the family in accordance with his obligation and his income-earning capacity. Secondly that a 50 per cent division of the parties’ assets at separation would not have been a just and equitable division of their assets, having regard to their particular contributions. The wife says she made a superior contribution to the care of the children during the marriage enabling the husband to earn a significant income which capacity continues today. The wife says the husband income earning capacity was three times that of the wife at separation. The wife asserts that her contribution-based entitlement is approaching 55 per cent of the liquid asset pool together with an adjustment of superannuation to equality which would require the $120,000 cash to be paid to her.
The parties separated physically in July 2011 and the matrimonial home was sold in December 2012. The wife agrees that the husband paid the mortgage on the home, continued to pay private medical insurance for the family and the wife paid council rates, electricity and gas. The parties each agree they did not seek a child support assessment as they were content with their arrangement.
I accept the wife’s position and disagree with the husband’s position that in some way his payment of the mortgage on the former matrimonial home for one year post-separation when he was living in the home is a superior financial contribution to that of the wife. It is not.
What the husband did was support his family as he is obligated to do under the Act. He was earning substantial income at that time approaching $200,000. The wife was and is still is working two casual jobs. Her income now approaches $92,000 by working two jobs. The husband’s income in his last financial statement is $192,000 which is twice the wife’s current income. At separation in 2010/2011 her income was significantly less as she had the care of the children.
I dispute that the husband has made a superior financial contribution post-separation either by paying the mortgage on the home to the support of his daughters when they were in his care or supporting his daughters whilst in their mother’s care. He was merely carrying out his obligation at law given his income.
However, in relation to the husband’s assertion that his parents made a superior financial contribution to the parties’ assets and welfare of the family, there is significant support for that assertion.
The husband asserts and it is not denied by the wife, that not only did his parents financially assist the parties but they assisted by providing care and assistance for the children. The wife’s family is in (country omitted).
The husband sets out in paragraph 68 that he was provided a gift of $25,000 for the deposit on the former matrimonial and that his in-laws provided the same amount of money. His parents gifted the parties $14,000 in 1996. They purchased a car for the wife in 1999 for $17,000. Subsequently, the husband sold that car at separation. They paid $60,000 to the parties in 1999 for renovations to the home. The husband’s father gave him $7,500 to cover the shortfall of renovations carried out at Property G.
The husband’s parents paid $4,000 off the kitchen loan rather than the parties having to pay for that as part of the extensions. They bought a piano for the girls at a cost of about $3,000. In 2007 they put $100,000 into the parties’ account. The wife agreed they paid for curtains and carpets for bedrooms. They paid for the girls’ (hobbies omitted) lessons. The husband’s father assisted him with rebuilding the bathroom and installing new floor in the bathroom. The husband’s parents assisted financially and physically with the renovations and caring for the children.
The wife’s case is that her father gifted them $25,000 at the commencement of cohabitation to buy a home. That he provided £50,000 pounds sterling to her in 1997 which on the exchange rate at that time was $125,000. The husband was clear this money was $75,000. The wife asserts her father paid some $5,000 a year towards school fees while the girls were in junior school.
The children’s school fees were a significant burden on these parties but that is a choice they made to send their children to a private school.
An argument was raised by Mr Dura that in having regard to the matters of Stanford & Stanford[2] and Bevan & Bevan[3], I ought not to interfere with what the parties did when they sold their home. I reject that submission.
[2] Stanford & Stanford [2012] HCA 52
[3] Bevan & Bevan [2013] FamCAFC 116
The parties did not enter into a binding financial agreement when they determined to sell their former matrimonial home nor did they enter into Section 79 orders. There is no binding order or agreement on foot.
Secondly, the parties sold their home and divided the proceeds equally which enabled each of them to buy a home. I accept the wife’s case that because of her limited income, she was only able to buy a two-bedroom apartment at (omitted), whereas the husband was able to buy a three-bedroom apartment in a more salubrious part of Sydney, namely (omitted) because of his higher income. That has resulted in a difference now as to the value of the real estate each of the parties hold.
Thirdly, the parties did not perfect their agreement in that they did not affect a super splitting order and could not have done so unless there had been a binding financial agreement or property orders under Section 79 made.
In light of these facts, any argument that this court is in some way estopped from now exercising the discretion under Section 79, or that it would not be just and equitable to embark upon a property hearing to determine if a further adjustment of property should be made cannot be sustained. Not to embark upon a hearing in a marriage of 20 years to determine whether there ought to be a further property adjustment to either party would be the unjust and inequitable course.
I propose to deal with the matter in the ordinary course and will so do. Following the well-known principles enunciated in Ferraro & Ferraro[4], Pierce & Peirce[5] and C & C[6] being the four stage approach which is to;
1. Identify the matrimonial pool it species and value.
2. Assess the parties’ contribution based entitlement expressed as a percentage for their past contribution to their property both directly of a financial nature, indirectly by energy, effort and/or third party contribution and as parent and homemaker.
3. Determine whether there ought to be a further adjustment to either party’s contribution based entitlement for their past contribution having regard to their future needs.
4. Look back at the orders proposed to be made and determine if they result in a just and equitable division of the parties assets.
[4] Ferraro & Ferraro (1993) FLC 92-335
[5] Pierce v Pierce [1998] FamCA 74
[6] C & C [2005] FamCA 429.
I find each of the parties have equally contributed to their current asset base pre separation. The husband by way of his income earning capacity and limited parenting and homemaking and the wife by her superior parenting and homemaking and lesser income earning capacity.
Post-separation, I do not see that the husband has made a superior financial contribution to the current asset base over that of the wife. His income has always been, if not three times, two and a half times more than the wife.
I find the husband’s parents have by way of moneys provided as well as the effort and energy they put into assisting the parents in renovating their home and caring for their grandchildren, assisted the husband having made a greater contribution to the current asset base than the wife, and I assess that contribution at 2 per cent as at the date of separation.
The assets of the parties are as follows;
a)The husband’s home is worth $875,000;
b)The wife’s home $587,000;
c)Husband’s car is worth $11,400;
d)Wife’s car $10,441;
e)Husband has $11,900 in the bank which I will not include in the liquid assets this being moneys acquired post separation;
f)The wife has $413 in the bank which I will not include in the liquid assets this being moneys acquired post separation;
g)Husband has shares worth $13,800.
The liabilities of the parties are as follows;
a)Husband has 3 credit card debts totalling $21,000. I will not include those as debts of the marriage as they were incurred post separation;
b)Husband’s mortgage $360,400;
c)Wife credit card debt of $1,346. I will not include that in the matrimonial assets as it is a post-separation debt;
d)Wife’s mortgage $155,970.
Superannuation
a)Husband two policies. One is valued at $195,441 and the second at $42,675;
b)Wife’s superannuation is valued at $73,590.
The husband is due to receive a redundancy payout of $94,188. He will be out of work as at the end of March 2016.
The assets for division are therefore $1,557,200, less the liabilities, which are the two mortgages, $155,970, and $360,400.
This is $1,040,830 in liquid assets with a superannuation total of $311,706.
Going to the superannuation first, it was put to me by Mr Dura that I should evenly split superannuation but only using the parties’ entitlement as at separation. That is not a figure particularly known to me nor can I ascertain it. However he says it would be unfair to effect an equitable division on today’s values because the husband’s superannuation has increased since that time from his own efforts to which the wife has made no contribution. Further that given his superannuation is now approaching some $231,000 and the wife’s is only $73,000 it would inequitable to an equal division. I reject that submission.
One reason for the value of husband’s superannuation is because of his superior income earning capacity which the wife simply does not have. The wife did not have such capacity during the marriage nor post the marriage nor will she have this capacity into the future. Further, much of the superannuation was built up during the marriage in any event.
I will approach superannuation and liquid assets as two pools for the following. These parties have at least 10 years before they can access any superannuation and it is appropriate in those circumstances I use the two pool approach. I propose to divide the current value of superannuation equally which results in each receiving $155,853 which is a splittable payment to the wife of $82,263 and I will so order.
In relation to the division of the liquid assets, I have determined that the party’s contribution’s to their asset base was equal at and following separation. The husband has made a superior financial contribution to the current asset base due to the significant assistance both financial and non-financial provided to the parties by his parents and I have allowed him 2 per cent. This would result in 52 per cent to the husband and 48 per cent to the wife.
I must determine whether that percentage ought to be adjusted having regard to the relevant Section 75(2)[7] factors for each.
[7] Family Law Act 1975 (Cth), s 75(2)
The relevant Section 75(2) factors are this. The wife proposes to leave her part-time casual employment and will be spending a period of time overseas with her family this year.
The husband has just been made redundant. He will receive a redundancy payment of $94,188. I do not see the wife has made any contribution to this asset. It was acquired by him post-separation from work he engaged in post-separation. That redundancy payment is about 10 per cent of the current net liquid asset pool.
It is unknown whether the husband will be able to obtain employment. He is aged 54 and I can take judicial notice of the difficulty of obtaining employment at the level he has been used to of earning in 2015 for example $217,000. I accept he will be able to obtain employment, perhaps not at that level, perhaps approaching the level of the wife, who at this stage has been able to earn $95,000 per annum from two part time jobs. Perhaps their income will be at a similar level into the future it is unknown and unclear.
In circumstances where the husband has access to a fund of money to which the wife has no access, approaching 10 per cent of the matrimonial pool, I will allow the wife a 5 per cent adjustment for her future needs.
The result of my proposed orders is an adjustment of 53 per cent to the wife and 47 per cent to the husband. This is a figure of $551,640 to the wife and $489,190 to the husband of the liquid assets.
The wife currently has the nett equity in her home of $420,000 and her car of $10,441 which totals $430,000 rounded down. I have found her entitlement to the liquid assets to be $558,166. This requires the husband to pay her $121,640.
I find these orders are just and equitable in that they take account of all the contributions made by the parties in a 20-plus year marriage where the husband’s parents made a superior financial and indirect contribution to the asset base by way of providing significant funds to the parties and in their care of the children to assist them to work and maintain their property and where at the date of the hearing the husband’s income earning capacity although high during the marriage is now unknown into the future and where he has access to a fund of money to the exclusion of the wife approaching 10 per cent of the parties’ liquid assets.
For those reasons, I find these orders are just and equitable.
I will be an order pursuant to 90MT of the Act that whenever a splittable payment becomes due and payable to the husband from his (omitted) private superannuation fund, the sum of $82,263 is to be paid to the wife.
Further, that the husband within three months pays to the wife the sum of $121,640.
Otherwise, all parties retain all assets in their possession and control.
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Judge Henderson.
Date: 1 July 2016
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Family Law
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Equity & Trusts
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