Cartwright and Cartwright (No.2)
[2018] FCCA 1244
•17 May 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CARTWRIGHT & CARTWRIGHT (No.2) | [2018] FCCA 1244 |
| Catchwords: FAMILY LAW – Property – Property Adjustment Orders – consideration of notional add backs. |
| Legislation: Family Law Act 1975, ss.75, 79 Evidence Act 1995, s.128 |
| Cases cited: Stanford& Stanford [2012] HCA 52 Omacini & Omacini (2005) 33 Fam LR 134, (2005) FLC 93-218 |
| Applicant: | MR CARTWRIGHT |
| Respondent: | MS CARTWRIGHT |
| File Number: | SYC 7093 of 2015 |
| Judgment of: | Judge Lapthorn |
| Hearing dates: | 8, 9 & 10 August 2017, 20 November 2017 and 9 April 2018 |
| Date of Last Submission: | 9 April 2018 |
| Delivered at: | Brisbane |
| Delivered on: | 17 May 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Kelly |
| Solicitors for the Applicant: | G & D Layers |
| Counsel for the Respondent: | Mr Bates |
| Solicitors for the Respondent: | Mark Graham Solicitor |
ORDERS
That within 28 days each party must do all acts and things and execute all necessary documents to transfer the Wife’s interest in the property situate at Property A, in the State of New South Wales having Folio to the Husband.
That orders 3 – 6 inclusive of these orders are binding on the Trustee of the Super 1 Superannuation Plan.
That the base amount allocated to the Wife in these proceedings out of the interest of the Husband in these proceedings in the Super 1 Superannuation Plan is Three Hundred and Eighty-One Thousand One Hundred and Thirteen Dollars ($381,113).
That pursuant to section 90MT(1) of the Family Law Act1975, whenever a splittable payment becomes payable in respect of the interest of the Husband in the Super 1 Superannuation Plan the Wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001 using the base amount and there would be a corresponding reduction in the entitlement that the Husband would have in the fund but for these orders.
That order 4 has effect from the operative time.
That the operative time for the purposes of Order 5 of these orders is four (4) business days after the date of service of these orders by either the Husband or the Wife on the Trustee of the Super 1 Superannuation Plan.
That within 28 days of the Wife receiving the splittable payment referred to in order 4 she is to do all acts and things and execute all documents necessary to discharge mortgage number to Bank 1 registered on the title to the property situated at Property B in the State of New South Wales having Folio (“the Property B Property”).
That contemporaneously with order 7 each party must do all acts and things and execute all necessary documents to transfer the Husband’s interest in the Property B Property to the Wife.
That save for any provision in these orders, the Wife retain to the exclusion of the Husband all her right, title and interest in all other items in her possession and/or control.
That save for any provision in these orders, the Husband retain to the exclusion of the Wife all his right, title and interest in all other items in his possession and/or control.
That each of the parties shall do all acts and sign all necessary documentation to give effect to the terms of these Orders and in the event that either party refuses or neglects to sign (within seven (7) days of a written request to do so) any document necessary to effect the terms of these orders, the Registrar of the Federal Circuit Court of Australia is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such documents on behalf of such party.
That the Orders made 6 April 2016 be discharged effective 15 February 2018.
IT IS NOTED that publication of this judgment under the pseudonym Cartwright & Cartwright (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
SYC 7093 of 2015
| MR CARTWRIGHT |
Applicant
And
| MS CARTWRIGHT |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties have been unable to reach agreement in relation to a property settlement after the demise of their 14 year relationship. They have asked the court to make a property adjustment order. For the purposes of this judgment I will refer to them as the husband and the wife even though a divorce order has been made. I mean no disrespect to the parties in doing so.
The husband commenced these proceedings by filing an Initiating Application on 29 October 2015. The wife’s Response was filed on 1 December 2015. On 6 April 2016 Judge Myers made an order for the husband to pay spouse maintenance to the wife set at $500 per week. The husband was also ordered to pay the mortgage repayments on the home the wife is living in, the Property B property, and all rates and taxes for this property. He was further ordered him to pay all rates, taxes and outgoings on the Property A property, which is where he lives, and the private health insurance for both parties. I suspended the husband’s obligation to pay the wife’s spousal maintenance on 9 April this year pending delivery of this judgment.
The hearing of this matter took place initially over three days in August 2017 with directions made for written submissions to follow. However on the husband’s application the matter was re-opened with more hearing time on 20 November 2017. A further application by the husband for the matter to be re-opened was successful with the final hearing concluding on 9 April 2018. The hearing was re-opened because the husband was made redundant in his employment. His receipt and subsequent use of a redundancy package altered the pool of assets and warranted further consideration.
Competing Applications
The orders sought by the parties and their circumstances have changed throughout these proceedings. In order to keep this judgment brief I do not propose to repeat the different orders sought by them at the different stages of the matter. At the conclusion of the hearing, however, the applicant husband sought orders that would provide for an equal distribution of the net pool of assets and liabilities and would enable the wife to retain the Property B property and he would retain the Property A unit. The wife also proposed she keep the Property B property and the husband take the Property A property but her proposed orders would see an overall distribution in her favour of 55% to 45%.
The parties were unable to reach complete agreement as to the composition of the pool of assets and liabilities for consideration. I will determine any necessary dispute in that regard. However the significant assets in the pool were a house at Property B, which the wife brought into the relationship, and a unit at Property A that was purchased by them during the relationship. The husband also had superannuation valued at the date of the August hearing at $694,346. Both parties sought a superannuation splitting order to enable the wife to effectively take the superannuation in cash and payout the mortgage on the Property B property. The Property A unit is unencumbered.
Material relied on
Along with the oral evidence given, in determining this application I have had regard to a number of documents filed by the parties at the trial and in the two re-opened hearings.
In the husband’s case that material was:
a)His Amended Initiating Application filed 3 May 2017;
b)His Affidavits filed:
i)3 May 2017;
ii)6 October 2017;
iii)17 November 2017;
iv)7 February 2018; and
v)3 April 2018.
c)His Financial Statement filed 3 May 2017; and
d)Affidavits of his witnesses:
i)Mr D filed 16 June 2017; and
ii)Ms A filed 20 June 2017.
In support of her application the wife relied on:
a)Her Amended Response filed 28 April 2017;
b)Her Affidavits filed:
i)18 April 2017;
ii)6 October 2017;
iii)12 February 2018; and
iv)6 April 2018.
c)Her Updated Financial Statement filed 27 April 2017; and
d)Affidavits of her witnesses:
i)Mr P filed 21 April 2017;
ii)Mr N filed 1 February 2016;
iii)Ms E filed 24 April 2017;
iv)Dr A filed 18 April 2017; and
v)Mark Graham filed 13 November 2017.
A number of documents were tendered into evidence.[1] I have also had regard to the outline of case documents and written submissions filed by each of the parties.
[1] C1 – Joint balance sheet
Background
Although the parties did not agree as to when their relationship commenced I am satisfied it was around 1999 that they started to live together. They married on 2000, separated in July 2014 and were divorced on 29 March 2016.
The husband is 58 years of age having been born 1959 and the wife, born 1955, is 62 years of age. There are no children of the marriage however, the wife has two now adult children from a previous relationship, Ms S born in 1985 and Mr C born 1989. The children resided with the parties during the relationship and each left the family home to live independently when they were around 18 years of age.
Throughout the relationship the wife worked full time initially in (occupation omitted) positions and later as a self-employed (occupation omitted) until 2007. She gave evidence of having sustained injuries from a number of motor vehicle accidents which she said impacted her ability to work. During the relationship the husband was in paid full time employment in the (employment omitted). He received two redundancies from his employment during the relationship and in January of this year.
Credit
The parties were in dispute in relation to a number of factual issues. They each presented as deeply entrenched in their recollections of events although I found the husband to be more willing to make concessions when necessary. The wife was at times argumentative and histrionic not only when giving evidence but when seated beside her lawyers. Litigants in family law disputes often find themselves unable to be objective when recounting a past event but even allowing for this I found the wife’s evidence to be most disappointing. I did not find her to be a credible witness. Where the evidence of the parties differed I preferred that of the husband.
During the hearing I issued a certificate under s.128 of the Evidence Act 1995 (Cth). In relation to evidence given by the wife that despite an order for the husband to pay her spousal maintenance she continued to receive social security benefits and had not told Centrelink of her receipt of the maintenance. The wife gave evidence to the effect that she did not believe she had to disclose the maintenance payments. I do not accept her evidence.
An issue of family violence was raised in these proceedings with each party giving quite divergent evidence. Two incidents assumed some importance in cross-examination and both counsel referred to them in their written submissions. I do not propose to repeat the evidence. I found the wife’s version of events to be inconsistent with the police documents tendered and I have concluded that, consistent with my finding as to credit, the husband’s evidence is to be preferred.
Legal Approach
In determining property proceedings the court is firstly required to identify according to ordinary common law and equitable principles the existing legal and equitable interests of the parties in the property that is available for distribution between them. It is then necessary to determine whether it is just and equitable to make an order altering the parties’ interests in the property. If so satisfied the court must then consider the contributions made by each of them under the various s.79(4) considerations before looking at their future needs by reference to the s.75(2) factors. [2]
[2] S.79(2) & (4), Stanford [2012] HCA 52. See Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355 for approach prior to the High Court decision in Stanford
Is it just and equitable to alter the property interests?
In Stanford[3] the majority held:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
[3] [2012] HCA 52
I am satisfied that it is appropriate in this case to alter the property interests of the parties in light of the demise of their marriage and the fact that the maintenance of the current legal ownership of their property would not afford them justice and equity.
The property of the parties
During the hearing in August 2017 the parties were able to resolve their dispute as to the value of the property at Property B and tendered at the Court’s request an agreed statement of assets and liabilities[4] which is reproduced below:
[4] Exhibit C1 - Joint balance sheet
| Assets | Possession | Value |
| Property B property | Joint | 780,000 |
| Property A property | 425,000 | |
| Husband’s Super 1 account | Husband | 596 |
| Husband’s household contents | Husband | 500 |
| Vehicle Y | Wife | 21,900 |
| Wife's Super 1 account | Wife | 1,158 |
| Funds in credit card | Wife | 827 |
| Wife’s household contents | Wife | 3,500 |
| TOTAL ASSETS | $1,233,481 |
| Liabilities | ||
| Super 1 mortgage | Joint | 375,721 |
| Husband’s Visa card | Husband | 1,500 |
| TOTAL LIABILITIES | $377.221 | |
| Sub total | $856,260 |
| Superannuation | ||
| Super 1 superannuation plan | Husband | $512,000 |
| Super 2 | Husband | $182,346 |
| TOTAL SUPERANNUATION | $694,346 |
| TOTAL NET VALUE | $1,550,606 |
Add backs
The parties remained in dispute however in relation to whether a number of notional add backs should be included in the table.
It is open to a court, in appropriate circumstances to exercise its discretion and notionally add back into a pool of assets for distribution funds that no longer exist. The adoption of that course will depend on the facts of each case. The Full Court of the Family Court in Omacini[5] summarised the three categories of such cases:
a)Where the parties have expended money on legal fees[6];
b)Where there has been a premature distribution of matrimonial assets[7]; and
c)Where a party has by a course of conduct reduced the value of an asset or where the party has acted recklessly, negligently or wantonly with the matrimonial assets effectively reducing their value.[8]
[5] (2005) 33 Fam LR 134 at p144, (2005) FLC 93-218 at p79,617
[6] DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816
[7] Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569
[8] Kowaliw (1981) FLC 91-092; (1981) 7 Fam LR N13
The husband argued that following should be considered when determining the property pool:
a)$13,000 being proceeds of the 2015 flood damage insurance claim which the wife used to pay $11,000 to her daughter and $2,000 to her brother by way of reimbursement of legal fees paid by them;
b)$4,232 being the difference between the insurance payout of $36,232 for the damage to a car and caravan, both matrimonial assets, and the amount of $32,000 she paid for her current Vehicle Y car;
c)$10,100 being the difference between the purchase price of the Vehicle Y at $32,000 and the value ascribed to it in these proceedings at $21,900; and
d)$4,000 being the amount the wife received from a 2016 flood insurance payout, which she could not account for.
I am satisfied the wife’s use of the $13,000 to re-pay her brother and daughter were in effect the payment of legal fees and this sum should be added back into the pool. I do not accept that it is appropriate to add back into the pool the $10,100 contended on behalf of the husband. He was critical of the wife for purchasing a new vehicle. Whilst I accept his submission that the wife’s decision to replace a 12 year old vehicle with a new one was a unilateral decision, it was not unreasonable in the circumstances for her to purchase such a vehicle. There is of course a significant depreciation of the vehicle. I can understand the husband’s complaint that he will bear that depreciation without any corresponding benefit to him but I will exercise my discretion and not add that sum back given depreciation is an ordinary fact of life. The wife received $36,232 in an insurance payout for damage to the caravan and Vehicle Z motor vehicle. These were both matrimonial assets. She only used $32,000 to purchase her new vehicle and was unable to account for the remaining $4,232. Whilst there is merit in the husband’s argument that it should be considered as a potential add back I do not propose to do so. Nor do I intend to add back the $4,000 she was unable to account for after receiving another insurance payout. There are two reasons why I have exercised my discretion not to add back these sums. Firstly add backs should always be exceptions not the rule.[9] The second reason is that the husband has utilised almost all of his redundancy payment. Although some of it will be added back for reasons I will address below, I have not added all of it back. The husband in his affidavit filed 3 April 2018 accounts for his spending which the wife could not do but nonetheless I am satisfied that fairness dictates not adding back these sums.
[9] See Vass & Vass (2015) 53 FamLR 373; Chapman & Chapman (2014) 51 FamLR;
Husband’s Personal Effects
The husband argued that a number of his personal effects where at the Property B property but the wife had failed to provide them to him. Apart from some old and damaged records she denied they existed. Although the husband ascribed a value of $4,500 to the items I am not able to determine any value to them. I accept the husband’s evidence as to their existence and reject the wife’s evidence given my findings as to credit. I propose to take this issue into account when considering s.75(2)(o) rather than treat them as an item in the pool of assets.
Husband’s Redundancy
The husband was made redundant on 2018 and subsequently received a redundancy payment totalling $113,207. The evidence as to the make up of this sum made it difficult to determine the varying aspects of the payment. It would seem, however, that there was an allowance of 21.25 weeks severance pay and both annual leave and long service leave entitlements were included in the payout. In his affidavit filed 3 April 2018, the husband gave evidence of having spent $94,395 since receiving the redundancy. He gave evidence of having set aside $8,800 for future known expenses leaving him with $10,012, which he will need to use to cover his living expenses until he obtains new employment or becomes entitled to receive Centrelink benefits. At the April hearing though it was agreed by both counsel that the unexpended funds available to the husband was $12,177. Counsel for the husband conceded that that sum should be added to the pool of assets and liabilities.
Part of the moneys expended by the husband were to meet his obligations under the spousal maintenance order and the order for the payment of utilities, rates and taxes on both properties. I accept the husband has needed to purchase new clothing and undertake courses to assist him obtain new employment. His purchase of personal items and reading glasses and attending to dental treatment were also reasonable expenses. Other significant items however need to be considered as to potential notional add backs or as assets in the pool.
The husband used $18,000 of the redundancy money to pay his solicitor for his legal fees. He also paid out a loan with Bank 2 in the sum of $27,000. This loan was taken out by him to repay his parents who had originally lent him money to pay his legal fees. For all intents and purposes the payment of the Bank 2 loan can be considered to be the payment of legal fees. Counsel for the husband conceded that these two sums should be added back into the pool.
The husband purchased a new motor vehicle with the redundancy money. This item must also be added to the pool. The provision for the husband’s credit card needs to be removed from the pool as he used money from the redundancy to payout his credit card debt.
Changes to Wife’s Credit Card and Bank Balance
Counsel for the husband conceded the wife’s previous bank account and credit card balances have altered since the August hearing and should be amended.
Conclusion as to Pool of Assets and Liabilities
Given my findings above I adopt the following table as the pool of assets and liabilities:
| Assets | Possession | Value |
| Property B property | Joint | 780,000 |
| Property A property | 425,000 | |
| Husband’s Super 1 account | Husband | 596 |
| Husband’s household contents | Husband | 500 |
| Vehicle Y | Wife | 21,900 |
| Vehicle X | Husband | 25,450 |
| Unexpended funds from husband’s redundancy | Husband | 12,177 |
| Wife's Super 1 account | Wife | 165 |
| Household contents | Wife | 3,500 |
| Notional Add Back of moneys received by wife from proceeds of an insurance claim and paid to her daughter and brother for legal fees paid | Wife | 13,000 |
| Notional Add Back of moneys received by husband from his redundancy payout and utilised for legal fees | Husband | 18,000 |
| Notional Add Back of moneys received by husband from his redundancy payout and utilised for the payout of a loan to Bank 2 which was used for legal fees | Husband | 27,000 |
| TOTAL ASSETS | $1,327,288 |
| Liabilities | ||
| Super 1 mortgage | Joint | 375,721 |
| Credit Card debt | Wife | 2,000 |
| TOTAL LIABILITIES | $377,721 | |
| Sub total | $949,567 |
| Superannuation | ||
| Super 1 superannuation plan | Husband | 512,000 |
| Super 2 | Husband | 182,346 |
| TOTAL SUPERANNUATION | $694,346 |
| TOTAL NET VALUE | $1,643,913 |
Contributions
I now turn to the assessment of the parties’ contributions.
Both parties made significant financial contributions at the commencement of their relationship. The husband had $65,000 by way of savings arising out of his property settlement with his former partner. He also had an interest in a defined benefit superannuation scheme. He contended this was worth around $99,000 at the time. I am not able to make a finding as to its value given the nature of it being a defined benefit scheme that was dependent on his final salary. The wife however appropriately conceded that this was a significant initial contribution. In 2005 the husband received a redundancy payment of $103,000 from his then employer. Although the receipt of the payment was during the relationship, a significant part of it related to a period of time prior to the relationship commencing. The wife brought into the relationship the Property B property. It was subject to a mortgage at the time. In July of 2000 this property had a mortgage of $147,647 and was valued by a bank at $330,000. I accept her counsel’s submission that this contribution should be given substantial weight as not only did she have a significant equity in it, the property, being real estate increased in value over time and was used as security for the parties to purchase the Property A property. A purchase that could not have occurred without the security given the bank would not lend on its own security. Early in the relationship she also received a victims’ compensation award and a damages award totalling around $63,000.
Although it is clear the wife made a significant contribution at the commencement of the relationship, I am not satisfied it was substantially greater than the husband’s, particularly when his 2005 redundancy is taken into account a substantial part of which related to pre-relationship employment.
The husband worked throughout the relationship earning a high income. Although he was made redundant in 2005, he was successful in obtaining employment soon thereafter. He received a further redundancy in 2011 and was again successful in securing employment relatively quickly. Although he again lost his job in 2014 he managed to obtain another position with his employer albeit at a lower salary. At the August hearing he was earning approximately $145,000 gross per annum. Despite his current redundancy he remains relatively confident of obtaining further employment. I accept the evidence of the husband that apart from the most recent redundancy he applied his past redundancy payments to the reduction of the mortgage over the Property B property and towards its improvements. He otherwise applied his income to the benefit of the parties and has continued to do so after separation. This is particularly so when the orders made 6 April 2016 are taken into account.
Although the husband earned a greater income than the wife, weight must be given to the financial contributions she made through her employment and subsequently by operating her business as an (business omitted). These contributions however ceased when she gave up working in 2007.
A number of renovations and additions have been carried out at the Property B property over the years. The parties were in dispute as to the extent of their respective non-financial contributions to these. The husband contended that he did significant renovations to the property from the beginning of the relationship including prior to their marriage. The wife denied this and contended that much of what the husband claimed to have done had in fact been done before their relationship commenced. She did not bring any evidence from other persons, such as her brother, who she said assisted her in these early renovations. I do not accept her evidence, preferring the evidence of the husband in this regard. The wife did not deny the husband worked on the property during the relationship although she was very critical of the quality of the work done. I am satisfied that the husband made a number of significant non-financial contributions during the relationship including working on renovations to the property when he was not working in his paid employment. The wife also contributed to the renovations by assisting the husband from time to time and by providing her skills as an (occupation omitted). The husband readily conceded the wife was very skilled in this regard.
In 2008 the business name ‘Business L’ was registered. This was intended to be for the operation of a (omitted) business. The parties were planning to use a downstairs area in the Property B property. The wife’s evidence appeared somewhat inconsistent. On the one hand in her trial affidavit she said the husband had withdrawn his consent for it to be used as a rental property but in her oral evidence, she said the quality of the renovations were below standard making it impossible for her to get council permission to rent it out. I am not able to determine the reason for the failure of the parties to get this enterprise off the ground. The issue however has little significance in the overall assessment of the case.
I accept the wife’s submission that she made the greater homemaker contributions and that they should be assessed as substantial.
Until recently the husband has paid the mortgage repayments on the Property B property along with the rates and taxes on it. He has also paid the strata levies, rates and taxes on the Property A property. He has paid the health insurance for both parties and $500 per week by way of spousal maintenance to the wife. This has been a significant post separation contribution. He also took leave in 2015 to provide care to the wife after her back surgery.
Weighing up the various contributions made by the parties at the various stages of the relationship as discussed above, I am satisfied that husband has made a greater contribution overall. I would assess the contributions to be 55% by the husband and 45% by the wife.
Section 75(2) factors
Having determined the contribution elements the court is required to have regard to the provisions of section 75(2).
The husband had for some years desired to retire at around the age of 58. He has arrived at that age but no longer considers that he is in a financial position to retire. He has recently been made redundant but I was impressed with his evidence that he intended to seek new employment. Given his history of obtaining employment after previous redundancies and the positive attitude he showed in his evidence, I am confident that he will be successful. The wife argued that the husband has a stronger earning capacity to her despite his recent redundancy. She has not worked in paid employment or operated a business since 2007. Counsel for the husband submitted that I should be sceptical of the wife’s claim to being unable to work as a consequence of medical issues.
There is no doubt that the wife has been involved in a number of motor vehicle accidents. She has experienced chronic back pain, insomnia, anxiety, and has suffered depression. She is currently in receipt of the Newstart Allowance and has been rejected for a disability pension on more than one occasion. None of the medical evidence before the court suggested the wife would not be able to return to the workforce in the future. However given her age, the fact she has not worked for about 11 years and her emotional presentation at court, I have little confidence she will be able to find or hold any employed position. I also doubt she would be successful in running either a business or an (omitted) business successfully. It is for this reason I am satisfied there should be an adjustment in her favour when I take into account ss.75(2)(a) and (b).
I indicated earlier in this judgment that I would take into account the wife’s failure to provide to the husband his personal effects when I considered s.75(2)(o). Her failure to make these items available warrants a slight reduction in the adjustment I found warranted in the previous paragraph. I would therefore make an overall adjustment in the wife’s favour at 5%.
Are the Orders proposed just and equitable
The next stage of the process is to step back and assess whether in all of the circumstances it is just and equitable to make the orders to be proposed.
Given my findings as to contributions and the s.75(2)(o) factors, any orders made should be as close as possible to an equal division of the pool of assets and liabilities I adopted at paragraph 30 above. This would see them each receive an adjustment to the value of around $821,956. Both parties proposed that they would each retain one of the properties. There remains a mortgage over the Property B property but it was submitted by counsel for the wife that if she was to receive a superannuation splitting order from the husband’s superannuation fund she would be able to effectively take this or part of it in cash and payout the mortgage. I am satisfied such a course would achieve justice and equity between the parties even if there will be little if any of the superannuation left for the wife after paying out the mortgage. That superannuation splitting order should be $381,113.
During the April hearing, I suspended the husband’s obligation to pay spousal maintenance to the wife pending the delivery of these reasons. The wife would seek a continuation of the spouse maintenance order at the very least until the expiration of the husband’s severance pay component of his redundancy. The husband sought the discharge of the order from the date of filing of his Application in a Case filed 7 February 2018 or at the very least from the date he was made redundant, which was 15 February. There is merit in each of these positions. On balance though I am satisfied the discharge of the order should take effect from the date of the redundancy. Although the husband received as part of his redundancy pay provision for lost future earnings calculated at 21.25 weeks, when I take into account the inclusion into the pool $70,450[10] of the redundancy money and the otherwise legitimate expenses he has incurred leaving him with only a modest balance I am not satisfied he has the capacity to pay, even though the wife has shown a need. For those reasons I will discharge the orders made 6 April 2016 with effect from 15 February 2018.
[10] The Vehicle X and the add backs for legal fees
Conclusion
Having regard to the reasons set out above the parties will receive or retain the following assets and liabilities (including notional assets):
a)The Husband:
Item
Value $
Property A property
425,000
Super 1 account
596
Household Contents
500
Vehicle X
25,450
Unexpended funds from redundancy
12,177
Notional Add Back of moneys received by husband from his redundancy payout and utilised for legal fees
18,000
Notional Add Back of moneys received by husband from his redundancy payout and utilised for the payout of a loan to Bank 2 which was used for legal fees
27,000
Balance of Super 1 Superannuation Plan after Splitting Order
130,887
Super 2
182,346
Total
$821,956
b)The Wife:
Item
Value $
Property B property
780,000
Vehicle Y
21,900
Super 1 account
165
Household contents
3,500
Notional Add Back of moneys received by wife from proceeds of an insurance claim and paid to her daughter and brother for legal fees paid
13,000
Superannuation Splitting Order from Husband’s Super 1 Superannuation Plan
381,113
Bank 1 mortgage
(375,721)
Credit Card debt
(2,000)
Total
$821,957
For the above reasons I will make the orders set out in the beginning of this judgment.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Lapthorn
Date: 17 May 2018
C2 – Valuation report dated 23 March 2016 from Valuation Company
C3 – Valuation report dated 20 July 2017 from Valuation Company
A1 – Applicant husband’s proposed minute of order
A2 – Letter from Centrelink to respondent dated 10 February 2016
A3 – Letter from Centrelink to respondent dated 28 June 2016
A4 – New South Wales Police COPS entry dated 6 and 13 August 2015
A5 – New South Wales Police COPS entry dated 22 August 2015
A6 – Report from Company (omitted) dated 8 February 2016
A7 – Mr J Mental Health admission paper dated 5 March 2016
A8 – Report and medical certificate by Dr A dated 10 January 2017
A9 – Notice to produce and documents produced in partial bank documents
A10 – Respondent affidavit dated 30 March 2016, paragraphs 11 to 15
A11 – Letter dated 16 January 2017 from respondent’s solicitors to applicant’s solicitors
A12 – Letter dated 26 October 2016 from respondent’s solicitors to applicant’s solicitors
A13 – Centrelink reporting statement for Newstart Allowance for the respondent wife
A15 – Dr B records
A16 – Pay slip dated 15 February 2018
R1 – Respondent wife’s proposed minute of order
R2 – Husband’s payslip dated 11 May 2017
R3 – Letter from Respondent’s solicitor dated 27 April 2017 to Superannuation Plan and reply letter dated 19 May 2017
R4 – Photos of the parties dressed up in a room
R5 – Photo of respondent wife and her daughter
R6 – Photo of the parties near rendered wall
R7 – Child Support Record between 1 January 2000 and 17 June 2006
R8 – Amended balance sheet filed 6 April 2018
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Fiduciary Duty
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Costs
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Statutory Construction
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