Clives and Clives (No. 2)
[2007] FamCA 761
•27 July 2007
FAMILY COURT OF AUSTRALIA
| CLIVES & CLIVES (NO. 2) | [2007] FamCA 761 |
| FAMILY LAW - PROPERTY – Whether or not receipt of interest on a bank account post-separation should be treated as a notional asset for the purpose of calculation of the parties’ property – Assessment of contributions – Assessment of relevant s75(2) matters – Superannuation splitting orders |
| Family Law Act 1975 (Cth) |
Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143
Townsend and Townsend (1995) FLC 92-569 at 81,654-5
Norbis v Norbis (1986) FLC 91-712
C and C (2005) FLC 93-220
Pierce and Pierce (1999) FLC 92-844 at 85,881
Way and Way (1996) FLC 92-702
Elsey (1996) 21 FamLR 249
Crawford and Crawford (1979) FLC 90-646 at 78,412
Clauson and Clauson (1995) FLC 92-595 at 81-909-81-910
| APPLICANT: | Mr Clives |
| RESPONDENT: | Mrs Clives |
| FILE NUMBER: | SYF | 3941 | of | 2005 |
| DATE DELIVERED: | 27 July 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | The Hon. Justice Rose |
| HEARING DATE: | 10, 11, 12, 13 April 2007; Written submissions; |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms R Winfield |
| SOLICITOR FOR THE APPLICANT: | Eleanor Murphy & Company |
| COUNSEL FOR THE RESPONDENT: | Ms M Cleary |
| SOLICITOR FOR THE RESPONDENT: | Taylor Scott |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr R Harper |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid Commission of New South Wales |
Orders
Property settlement orders
That on or before 5.00pm 10 August 2007 the wife shall cause to be paid to the husband by payment to his solicitors the sum of $212,160.00 drawn upon her term deposit account with the National Australia Bank […].
Declare that the funds remaining in the bank account referred to in Order 1 are the sole property of the wife.
Declare that subject to the Orders made this day each of the parties is the sole beneficial owner of all items of personal property in his or her possession, power or control.
Superannuation splitting orders
That for the purpose of this Order the “husband’s fund” shall mean the M Super Trust of sub-plan E Superannuation Plan.
That pursuant to paragraph 90MT(1)(a) of the Family Law Act 1975 and the Part 6 of the Family Law (Superannuation) Regulations 2001 whenever a splittable payment becomes payable in respect of the interest held by the husband’s fund shall pay to the wife an amount calculated in accordance with the Family Law (Superannuation) Regulation 2001 using the base amount of $93,514.00 and there shall be a corresponding reduction in the entitlement the husband would have had in the husband’s fund but for these Orders.
That Order 5 has effect from the operative time.
That the operative time for these Orders is the fourth business day after the day on which a sealed copy of these Orders is served on the husband’s fund.
That the parties shall equally bear any costs, fees or charges imposed by the trustee to give effect to these Orders.
That all documents produced on subpoena may be returned to the person who produced the same.
That the proceedings be removed from the Active Pending Cases List.
NOTATION:
A.The superannuation splitting orders made this day bind the trustee of the husband’s fund, it having been accorded procedural fairness.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
File number: SYF3941 of 2005
| MR CLIVES |
Applicant
And
| MRS CLIVES |
Respondent
REASONS FOR JUDGMENT
Introduction
In these proceedings each of the parties sought parenting orders for property settlement and superannuation splitting orders.
Parenting orders were made by me on 12 July 2007.
It had been my intention to also give judgment on that day in respect of the proceedings for property settlement and superannuation splitting orders. However, for the reasons explained in paragraphs 2 and 3 of the Reasons for Judgment given on 12 July 2007 in relation to parenting issues, I made directions in relation to unclear aspects of the superannuation issues. Ultimately, submissions in that regard were made on 12 July 2007.
I refer to and rely upon the uncontroversial history set forth in paragraphs 2 to 10 of the Introduction in the Reasons for Judgment given on 12 July 2007.
Historical background
The following are further brief relevant historical matters.
In 1986 the husband purchased S property (“the [S] property”) for a purchase price of $62,000.00 funded in part by mortgage advance of $45,000.00. Implicitly, the equity was provided by the husband from his funds.
In 1989 the wife purchased P property (“the [P property]”) for $91,500.00 funded as to $30,000.00 by combination of her savings and gift from the maternal grandmother of $10,000.00, and the balance of $76,400.00 by way of a loan.
The wife sold the P property for $91,500.00 with net proceeds of sale being approximately $8,500.00.
In September 1996 the husband sold the S property for $135,500.00. The amount or approximate amount of the net proceeds of sale was not the subject of evidence although neither party contended that the S property was still subject to a mortgage.
In about 1997 the parties jointly purchased T property (“the former matrimonial home”) for $225,000.00. It was funded by a combination of the net proceeds of sale of the S property and mortgage advance from the National Australia Bank of about $95,000.00.
In April 2001 J came into the care of the parties, as did J’s brother A. A lived with the parties for about three months before commencing in the care of his maternal grandmother.
On 10 July 2001, J’s mother died.
On 23 September 2001 in the Children’s Court L an order was made providing for the parties to have parental responsibility for J.
In about September or October 2001 an order was made in the Children’s Court L allocating parental responsibility for A to his maternal grandparents.
In about early 2004 the former matrimonial home was sold by the parties for $519,000.00 unencumbered. The net proceeds were approximately $506,385.00.
In February 2004 the parties and the children occupied rented premises at G.
On 26 October 2005, Johnston JR made parenting orders apparently partly by consent. Those orders provided inter alia for the children to reside with the husband for half of certain school holiday periods as well during school term for each second weekend from 6.00pm Friday until Monday morning before school.
On 2 November 2005 the wife appealed against the orders made 26 October 2005.
On 10 January 2006 orders were made by Le Poer Trench J. Those orders provided inter alia for the appointment of an independent children’s lawyer (formally children’s representative); discharge of the orders previously made in relation to J; discharge of the order for the period of time to be spent by S and M with the father during school term and substituting in lieu an order that they reside with him each second weekend from 6.00pm Friday until 7.30pm Sunday subject to such period being extended until Monday prior to the commencement of school should they so request by contacting the wife by telephone prior to 7.30pm on the relevant Sunday.
On 12 July 2007 parenting orders were made.
Relevant legal principles
It is now well established that generally speaking the approach to be taken to determination of property settlement proceedings, concluding with an order that is “just and equitable”, represents four steps.
The first of which is that the Court should determine the property and financial resources of the parties at the date of the hearing.
Secondly, determine the nature and extent of the respective contributions made by each of the parties whether financial or non financial, including contribution to the welfare of family in the role of home-maker and parent.
Thirdly, determine and assess the relevant matters pursuant to s 75(2).
Fourthly, consideration of orders, if any, that should be made that are just and equitable.[1]
[1] Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143
I will now proceed to make findings in relation to the property of the parties, their respective financial and non-financial contributions and relevant matters (if any) pursuant to s 75(2) of the Act. In addition, I will make findings in respect of the issue of “waste” raised by the applicant.
Property of the parties
Exhibit 21 is an agreed amended schedule of the property of the parties reproduced herein. The second item of the “assets” is in dispute as indicated in the schedule and will be the subject of a subsequent finding by me.
“Schedule of Property Ownership Husband’s value Wife’s value Agreed Assets Savings, proceeds fmh in bank J $585,751 $585,751 yes Interest on savings & proceeds taken by wife less tax J $57,831 $57,831 *yes Toyota mv H $8,500 $8,500 yes Commodore mv W $4,700 $4,700 yes I shares W $6,944 $6,944 yes Bike, tools, furniture H $5,000 $5,000 yes Jewellery, camera, furniture W $1,000 $1,000 yes Bank ANZ … H $4,300 $4,300 yes Bank NAB … W $403 $403 yes Bank NAB … W $8 $8 yes Cash in hand W $804 $804 yes Legal fees paid H $29,071 $29,071 yes Legal fees paid W $8,500 $8,500 yes Total assets $712,812 $712,812 Superannuation M Wealth Solutions H $310,731 $310,731 yes F Super W $37,881 $37,881 yes U Super Rollover W $39,063 $39,063 yes Total super $387,675 $387,675 Sub-total $1,100,487 $1,100,487 Liabilities PAYG tax liability W $6,993 $6,993 NAB Visa W $412 $412 yes Total liabilities $7,405 $7,405 Total $1,093,082 $1,093,082 *Parties disagree as to treatment of this amount, which has been calculated *$92,000 withdrawn less tax paid and payable $34,169 = $57,831”
Disputed item
Exhibit 21 (interest on savings and proceeds taken by wife) - $57,831.00
There is no issue that the contentious amount of $57,831.00 is the agreed amount of interest retained by the wife on a net basis after allowance made for “tax paid and payable $34,169.00”.[2]
[2] Exhibit 21
The amount in question was derived by way of interest on a combination of the net proceeds of sale of the former matrimonial home and the parties’ savings.
It is common ground that the gross amount of the sources of the amount referred to in the last paragraph were deposited into an account in the sole name of the wife as it was considered to be a tax advantage to do so, in that the wife’s income at the time was less than that of the husband and consequently it was more tax effective for the relevant bank account to be in her name.
A dispute arose between the parties subsequent to their separation when the wife realised that the tax consequences of the interest earned in the relevant bank account meant that she was carrying the whole of the tax burden which had implications not only in relation to the payment of tax, but also resulted in reduction in government benefits and child support.
The dispute was not resolved between the parties. The husband’s approach has been that the wife should continue to bear the imposition of the level of taxation that resulted and that any disadvantage to her should be addressed on property settlement.
Given that the relevant amount for determination by me is $57,831.00 net of tax, it is the husband’s contention that as the amount has been retained by the wife solely for her use it should be added-back in the calculation of the parties’ net property for potential division between them. The submissions for the husband implicitly raised the issue of “waste” as no other relevant submissions were made.
The wife’s case is that the amount of $57,831.00 should not be added back by way of a notional asset of hers as it has been utilised to meet a variety of living expenses for herself and the children as well as some of their particular expenditure such as new school uniforms for S and M.
The evidence of the wife is that her increased income due to the interest earned on the funds held in the relevant account have had a number of adverse financial consequences for her. The wife’s affidavit evidence identifies and sets out loss of and reduction in government benefits including family tax benefits, rental assistance and child care fees. In addition, the husband has had to meet child support at a reduced level than might otherwise be the case and at times no child support at all. A situation has developed whereby the wife has become liable for a refund of child support.
In the wife’s Affidavit sworn 5 April 2007, she calculated that the combined reductions in benefits and “maintenance”, which implicitly refers to child support, for the financial year ended 30 June 2006 and during the current financial year has amounted to $33,220.34.
In her affidavits, the wife also gave evidence of expenditure of the additional income from interest on various aspects of living expenses including financial support for one or more of the children.
There was little, if any, challenge of substance to the evidence of the wife. The evidence contained in the wife’s affidavits was given in a detailed, plausible manner and in those circumstances I accept it and make findings accordingly.
The Full Court in Townsend and Townsend[3] accepted that there should be a notional add-back of money spent post-separation by a party, which represented property in that party’s hands, as a premature distribution of property in the particular circumstances where monies so received have not been expended for appropriate expenditure.
[3] Townsend and Townsend (1995) FLC 92-569 at 81,654-5
The findings of fact made by me reflect the wife’s retention of net interest and the expenditure of it which has been appropriate in all the circumstances. There was a lack of evidence, let alone any submission to the effect that the wife’s expenditure had been unreasonable in the circumstances.
Accordingly, I have determined that the sum of $57,831.00 will not be included as a notional asset for the purpose of calculation of the net property of the parties.
Revised property of the parties
The following is the revised net property of the parties consistent with my previous determination to omit the sum of $57,831.00 referred to in the preceding paragraphs.
Assets H/W/J Savings, proceeds fmh in bank J $585,751 Toyota mv H $8,500 Commodore mv W $4,700 I shares W $6,944 Bike, tools, furniture H $5,000 Jewellery, camera, furniture W $1,000 Bank ANZ … H $4,300 Bank NAB … W $403 Bank NAB … W $8 Cash in hand W $804 Legal fees paid H $29,071 Legal fees paid W $8,500 Total assets $654,981 Superannuation M Wealth Solutions H $310,731 F Super W $37,881 U Super Rollover W $39,063 Total super $387,675 $1,042,656 Less liabilities PAYG tax liability W $6,993 NAB Visa W $412 Total liabilities $7,405 NET PROPERTY $1,035,251
Contributions
The following are my findings in relation to the financial and non-financial contributions of the parties including contribution to the welfare of the family in the role of homemaker and parent.
There is little challenge to the affidavit evidence of the parties as most of the cross-examination was directed to parenting issues in the context of competing applications for parenting orders.
The husband
The husband’s initial financial contributions included the S property of which he was the sole registered proprietor.
The S property had been purchased by him in about 1986 for $62,000.00.
The husband’s unchallenged evidence was that the amount outstanding pursuant to the mortgage at the commencement of cohabitation in 1990 was “less than $10,000.00 owing”. I accept the husband’s evidence and make findings accordingly.
Apart from clothing and personal effects there is no other direct or indirect evidence of other property owned by the husband apart from implicitly there were furniture and other contents in the S property given that it had been occupied by the husband and then by the parties once they commenced cohabitation.
There was no evidence or agreement of the current market value of the S property at commencement of cohabitation. Consequently, I am not in a position to make a finding as to the equity that the husband held in the S property, although it was likely to have been substantial relatively speaking.
During the period of cohabitation the husband’s unchallenged evidence is that in about 1991 he received $8,000.00 in cash and superannuation entitlements of about $33,000.00 following his cessation of employment with U. The husband applied funds at his disposal from that source in discharge of the mortgage over the S property.
In 1996 the husband sold the S property for $135,000.00 gross. It was unencumbered, there being an absence of contrary evidence.
Several months later the husband together with the wife purchased the former matrimonial home for $225,000.00 funded by a combination of the net proceeds of sale of the S property, joint savings and a mortgage advance from the National Australia Bank.
In about 2000 the mortgage on the former matrimonial home was discharged.
In about late 2003, early 2004 the husband joined in with the wife in the sale of the former matrimonial home which was unencumbered. The net sale proceeds of about $519,000.00 were then deposited in a bank account in the wife’s sole name and the balance of funds in savings accounts of the parties was combined with that account. The circumstances which led to the creation of the bank account in the wife’s sole name has been earlier referred to by me in the course of my findings in respect of interest earned on that account which became a disputed matter for determination by me in relation to Exhibit 21.
In late 2005 the husband received $12,500.00 as a beneficiary of his late mother’s estate.
Throughout the course of cohabitation the husband was in full-time employment other than for a period of several months during which he was engaged in casual part-time employment.
I find, and it was not disputed, that the income earned by the husband in his employment was applied towards meeting the parties’ liabilities and living expenses.
The husband also made a contribution to the welfare of the family in the role of homemaker and parent. He carried out domestic work as well as being engaged in the care and upbringing of S and M and later on J. That care also extended during a period of several months whilst the wife was engaged in and completing her course to be accepted as a public servant in the NSW Public Service which also involved attending training at X.
Subsequent to the separation of the parties the husband has complied with child support assessments.
The husband has also continued to make a contribution in the role of homemaker and parent on a regular basis for the periods that the children have been in his care by arrangements made between the parties directly as well as in accordance with the orders made 26 October 2005 and 10 January 2006.
The wife
The significant asset of the wife at the commencement of cohabitation was the P property. It was purchased in 1989 for $91,500.00 funded as set forth in paragraph 7 hereof.
The wife made further financial contributions as a consequence of the income that she earned whether in full-time or part-time employment, implicitly applied by her towards meeting family liabilities and living expenses.
The wife also joined in with the husband in the purchase and subsequent sale of the former matrimonial home. The husband and wife also generated savings from their income which were consolidated into one bank account in the sole name of the wife which included the deposit of the net proceeds of sale of the former matrimonial home to which earlier reference has been made.
The wife received a financial termination payment of $12,796.29 from U in November 2000 principally comprising redundancy payments upon involuntary retrenchment.[4]
[4] Exhibit 12
The wife made a contribution to the welfare of the family in the role of homemaker and parent including the performance of domestic work, daily care and upbringing of S and M and subsequently J.
The wife has continued to make a contribution in the role of homemaker and parent subsequent to the separation of the parties, the children being primarily in her care during the ensuing period to date.
The wife has continued in part-time employment and applied her income in meeting living expenses as well as financial support for the children.
Assessment of contributions
My assessment of the parties’ financial and non-financial contributions including contributions in the role of homemaker and parent must be seen against approximately 15 years of cohabitation including the care and upbringing of their two children as well as J.
Each of the parties applied themselves and worked hard in their respective endeavours which underpinned their financial and non-financial contributions.
Having regard to the findings I have made, it is clear that the husband’s financial contributions whether direct or indirect exceeded those of the wife.
The husband’s initial financial contributions included his equity in the S property of no less than $52,000.00 and within a year following commencement of cohabitation he received termination pay from his employer of $8,000.00 in cash and superannuation entitlements. However, the latter will be taken into account in terms of the parties’ respective contributions to their superannuation entitlements for the purpose of making superannuation splitting orders as sought by each of them.
Adopting the approach taken by counsel, which I consider has been appropriate, the property of the parties represented by the value of their superannuation entitlements and the contributions that each party made in that regard will be considered separately from the contributions to the rest of their property. That is a proper exercise of my discretion which in a given case does not require contributions to all property to be considered globally as was made clear by the High Court in Norbis v Norbis[5]; and implicitly followed by the Full Court in C and C[6].
[5] Norbis v Norbis (1986) FLC 91-712
[6] [C] and [C] (2005) FLC 93-220
The S property had its benefit to the parties not only because it was an initial financial contribution of the husband but also as it was occupied by the parties for a substantial period of time and then sold in 1996 for $135,000.00 unencumbered.[7] That amount represented the majority of the funding of the subsequent purchase of the former matrimonial home.
[7] Pierce and Pierce (1999) FLC 92-844 at 85,881
In 2005 the husband received $12,000.00 approximately as a beneficiary of his late mother’s estate.
The husband was engaged in full-time employment throughout the period of cohabitation except for a relatively short period of time when he also earned income in casual employment. He applied his income and other funds at his disposal towards meeting liabilities and living expenses of the parties and their children. Indeed, there is no evidence or submission to the contrary.
The husband joined in with the wife in the purchase and sale of real estate and ultimately conserving sale proceeds and savings now held in a bank account in the sole name of the wife to which earlier reference has been made.
During the period of cohabitation the husband made a significant contribution to the welfare of the family in the role of homemaker and parent, especially during that period when the wife was engaged with the training company and studies for the purpose of commencing a new career in the Public Service.
Subsequent to the separation of the parties the husband has continued to make contributions in the role of homemaker and parent as well as the provision of child support.
The wife for her part made a significant initial financial contribution represented by her equity of about $30,000.00 in the P property.
The P property was subsequently utilised by the wife in part to generate income through rent which helped defray the outgoings but also when it was used by the parties for family occupation. It was sold in 1994 resulting in net proceeds of sale of about $8,500.00.
The wife was also engaged in various positions of employment and as with the husband applied her income and other funds at her disposal towards the parties’ liabilities and living expenses.
The wife joined in with the husband in the purchase and sale of real estate as well as the conservation of the net proceeds of sale of the former matrimonial home which together with savings were deposited in a bank account in her name, the subject of previous findings so far as the generation of interest was concerned.
It is clear that the wife has made the primary contribution in the role of homemaker and parent both prior and subsequent to the parties’ separation. That contribution became particularly onerous once J commenced as a member of the parties’ household in early 2001. That has been due to the serious health and behavioural issues the subject of evidence and findings set forth in the judgment given on 12 July 2007 in respect of the parenting proceedings between the parties.
The wife has continued to provide child support for the children subsequent to the parties’ separation.
The husband made significantly greater financial contributions than the wife due to the equity that he had in the S property, its subsequent use by the parties, the proceeds of sale that were generated in 1996 and the large proportion of the purchase price of the former matrimonial home funded by those sale proceeds.
In addition, the husband’s financial contributions included the receipt in about 1991 of $8,000.00 from his employer and in 2005 of $12,000.00 as a beneficiary of his late mother’s estate. All of his financial contributions well exceeded the financial contributions made by the wife.
The conclusion in relation to assessment of financial contributions must be balanced against the primary contribution made by the wife in the role of homemaker and parent. That has been particularly onerous for her, not only since J became a member of the parties’ household, but especially since the parties separated about two and a half years ago.
The detailed evidence of the particular health issues which J unfortunately has and the care which the wife has had to provide for J on a daily basis, not to mention the obvious strain and emotional impact that must have had upon the wife is abundantly clear from not only the evidence of the parties but the expert evidence to which I have made reference in the Reasons for Judgment given on 12 July 2007. Even a cursory review of the reports and clinical notes of Dr T in Exhibit 4, as well as school records and documents provided by M Community Health Centre (Exhibits 18 and 24) demonstrate those matters. The value of that intangible contribution cannot be underestimated although it cannot be formulated in strict money terms.
I have given considerable weight to the primary financial contributions of the husband in accordance with Pierce and Pierce[8]. It must be remembered that it is well established that in a lengthy marriage contributions cannot always be calculated mathematically.
[8] ibid
In this case those financial contributions have to be balanced against the primary contributions by the wife in the role of homemaker and parent. The impact of those contributions has lessened the weight to be given to the husband’s financial contributions taking into account also the length of the period of cohabitation, the contributions made during and since that time against a background of three children in the parties’ household.[9]
[9] Way and Way (1996) FLC 92-702
As the High Court emphasised, assessment of contributions calls for a value judgment which may vary to some extent between trial Judges.[10]
[10] Norbis, ibid per Mason and Deane JJ
I have assessed the parties’ contributions to their net property, excluding superannuation entitlements, as being 55% in favour of the husband and 45% in favour of the wife.
Relevant matters pursuant to section 75(2)
I make the following findings in relation to relevant matters that arise for consideration pursuant to the provisions of s75(2).
The husband is 49 years of age and in good health.
The wife is 38 years of age. The wife has had significant health issues which have involved hospitalisation since the parties separated. No expert medical evidence was adduced on her behalf with the exception of a pathology report dated 17 May 2006[11] which recommended a second opinion in relation to a tumour. In the absence of up to date medical evidence, I have inferred that the wife’s health is now sound.
[11] Affidavit of wife sworn 13 July 2006, annexure “C1”
The husband’s two Financial Statements read in these proceedings are those sworn 29 March 2007 and 23 May 2007. The husband conceded that the first of those financial statements had a number of significant errors. In those circumstances, I propose to only make findings which take into account the second financial statement.
During the course of his oral evidence, the husband stated that his total remuneration from all sources was now $107,765.00 per annum gross which included superannuation of $11,761.00 per annum and variable pay. Implicitly, the amount for total remuneration also includes his bonus. The husband’s oral evidence was that in 2005 the gross bonus was $8,262.00 and for 2006 it was $10,282.75 paid on 31 March 2007.
The husband’s Financial Statement sworn 23 May 2007 reveals average weekly salary of $1,558.63 gross and bonus of $123.51 per week gross. The total average weekly income given of $1,682.00 amounts to $87,464.00 gross which is significantly less than the total remuneration amount referred to in his oral evidence to which I have made reference.
The husband did not give evidence of the tax payable.
The property of the husband is as described in paragraph 47 hereof. The husband does not have other financial resources.
I find that the husband has the physical and mental capacity for appropriate gainful employment in his current employment as a project manager. The husband has been employed by the same company for the past 14 years. Whilst the husband gave evidence of feelings of insecurity due to his perception that his employer’s business activities of late were not good, nonetheless there is no evidence of probable termination of his employment.
The wife’s income is as set forth in her Financial Statement sworn 5 April 2007. It amounts to an average weekly gross income of $1,987.00 from all sources. The wife’s salary is $789.00 per week gross. Other sources of income include interest on the bank account in her sole name the subject of earlier findings by me; government carer payment in relation to J of $210.00 and child support of $291.00 per week.
The wife has the property as set forth in paragraph 47 hereof. The wife does not have other financial resources.
The wife’s capacity to earn income is in her current employment as an employee in the New South Wales Public Service. The wife currently carries out her duties on a part-time basis working 28.5 hours per week.
The wife’s oral evidence was that if she was working full-time in the NSW Public Service her gross annual salary would be $55,000.00. There is no opportunity for over-time. The wife also stated that she receives annual increases in income. I accept the wife’s evidence and make findings accordingly.
The wife has the capacity to earn income in her current employment. Many years ago the wife earned income as a receptionist and had also some training in the telecommunications industry. However, realistically the wife does not have a current capacity to earn income in the latter occupation not having had experience in it for many years apart from possible lack of up to date knowledge. The wife also has the capacity to earn income as a receptionist. There was no evidence of vacant positions in that occupation which may be available to the wife let alone the range of income she could earn.
I accept the wife’s evidence that she is constrained to carry out her employment in the present part-time capacity due to the need to be available to provide care for J given the wife’s experience that J may have been rejected from before and after school care and as a consequence the wife felt it necessary to reduce her employment hours. It is not a matter of controversy that J has serious behavioural and physical health issues.
The husband has the care and control of the children each alternate weekend and during school holiday periods and potentially for further period or periods after school during each month.
The wife is the primary carer of the children.
Each of the parties has commitments for their personal support and that of the children.
Each of the parties has superannuation entitlements which have been valued as set forth in paragraph 47.
Each of the parties desires to continue their parenting role with the children.
The husband pays child support in accordance with the child support assessment.
No submissions were made in relation to other matters.
Assessment of relevant section 75(2) matters
I have determined that there will be an adjustment in favour of the wife of 15% of the parties’ net property excluding superannuation entitlements for the following reasons.
The wife has the primary care of the children. Whilst S & M are 16 and 13 years of age respectively, there are still significant periods of daily care that must be provided for them.
However, the ongoing daily care for J will continue for the foreseeable future subject to such periods that she spends with the husband which are likely to still leave J in the primary care of the wife.
The consequences of the care of the children, especially J, are that the wife’s capacity to earn income is greatly restricted to realistically during school hours.
J needs the benefit of parental care especially after school due to the behavioural problems that she has demonstrated which no doubt are at least in part related to the diagnosis oppositional defiant disorder, apart from other serious health issues. The difficulties that has created not only in the home but at school has been well documented in the evidence.
A further consequence is that the wife’s current and future income is significantly less than that of the husband and is likely to remain at that lower level for the foreseeable future.
A further financial consequence is that it inevitably follows that the employer superannuation contributions for the wife will be much less than that for the husband with potentially less security for her by way of superannuation.
Whilst it is true the wife is about 11 years younger than the husband and therefore has a potentially longer employment period than him, nonetheless the difference between their respective income earning capacities, level of income and superannuation contributions will substantially favour the husband for many years to come.
Conclusion
I have concluded that the effect of the contribution-based entitlements and adjustments made in respect of relevant matters pursuant to s75(2) so far as the parties’ net property is concerned, excluding valuation of superannuation entitlements which result in a 60% division in favour of the wife is just and equitable.
Following the guidance provided by the Full Court, I have tested the practicalities of that division of net property (excluding the value of superannuation)[12] which will result in the husband and wife receiving $212,160.00 and $373,591.00 respectively from the funds held in the relevant bank account and otherwise they will each retain the items of personalty in his or her individual possession.
[12] Elsey (1996) 21 FamLR 249
That analysis is as follows:
Wife to retain and receive: Assets Commodore motor vehicle $4,700 I shares 6,944 Jewellery, camera, furniture 1,000 Bank – … 403 Bank – … 8 Cash in hand 804 Legal fees paid 8,500 Part funds jointly held in bank account 373,591 Less liabilities: PAYG tax $6,993 NAB Visacard 412 7,405 Net property $388,545 Husband to retain and receive: Assets Toyota motor vehicle $8,500 Bike, tools, furniture 5,000 Bank – ANZ … 4,300 Legal fees paid 29,071 Past fund jointly held in bank account 212,160 Less liabilities: Nil Net property $259,031
Superannuation splitting orders
Each of the parties has sought superannuation splitting orders. The requirement of the Rules in relation to notice to the relevant trustee and the trustees positive response has been complied with.
Consequently, the issue is not whether there should be a splitting order but rather the terms of an order or orders that should be made.
Exhibit X sets out the agreed calculations of the value of the parties’ respective superannuation entitlements together with the calculations contended on behalf of the husband regarding the manner in which the base amount for a superannuation splitting order is arrived at.
Oral submissions were made by the solicitors for the parties in relation to Exhibit X.
The solicitor for the husband submitted that there should be a deduction of the present day value of the contributions initially made by the husband shortly after cohabitation. In that regard, I have made a finding that the husband’s initial contribution was approximately $33,000.00. There is no dispute that the present day value of that initial financial contribution is $71,768.55.
The solicitor for the wife submitted that whilst “the mathematics are agreed” by reference to Exhibit X, it was submitted that there should not be a deduction of the present day value of the husband’s initial financial contributions.
Ultimately, it was clear that the real issue was the weight to be attributed to the initial financial contribution made by the husband to his superannuation entitlements and its current value.
For the purpose of making superannuation splitting orders, apart from findings that are required as to the valuation of relevant superannuation entitlements, which in these proceedings are agreed as shown in Exhibit X, I am also required to make findings of respective contributions. Findings are also required in respect of relevant s75(2) matters and then to conclude with an order that is just and equitable.[13]
[13] [C] and [C] (2005) FLC 93-220 at pp 428, 429, 431, 434 and 440
So far as contributions are concerned, they will include both the direct and indirect financial contributions of the parties and their contributions to the welfare of the family in the role of homemaker and parent as is required pursuant to s79.[14]
[14] [C], ibid
I will consider the parties’ respective contributions to their separate superannuation entitlements rather than on a global basis.[15] The reason I do so is that their direct and indirect financial contributions to their respective superannuation funds were made during the period of cohabitation and since except for initial contributions made by the husband to his relevant superannuation fund.
[15] [C], ibid
As previously referred to, it is not a matter of contention that the present day value of the husband’s initial superannuation contribution made shortly after cohabitation between the parties commenced is $71,768.55. The husband’s case is that amount should be deducted from the value of his superannuation entitlements and the balance then considered for the purpose of assessment of the other contributions made by him as well as the wife’s contributions.
I have decided not to follow those submissions on behalf of the husband for the following reasons.
It is well established that in many cases where there has been a substantial period of cohabitation a pure mathematical approach to assessment of contributions is inappropriate.[16]
[16] Crawford and Crawford (1979) FLC 90-646 at 78,412; Norbis, ibid at 75,168; Clauson and Clauson (1995) FLC 92-595 at 81-9-9-81-910
Rather, I must take into account findings in relation to the period of cohabitation between the parties and all of their financial and non-financial contributions including contribution to the welfare of the family in the role of homemaker and parent.
In doing so, I consider the weight that should be given to the initial contribution of the husband in this case. That weight will also reflect not only the amount of his individual contribution but the manner in which it has been applied. The principles in that regard have not been a matter of controversy for many years.[17]
[17] Way and Way (1996) FLC 92-702; Pierce and Pierce (1999) FLC 92-844
The present day value of the husband’s initial contributions to his superannuation fund represents 23% of its agreed value of $310,731.00.
I have made findings in relation to 15 years of the parties’ cohabitation, their respective financial and non-financial contributions including the role of homemaker and parent during the period of cohabitation and since.
I have also made findings in respect of the relevant matters pursuant to s75(2).
It is clear that so far as the husband’s superannuation fund is concerned, his contributions exceeded those of the wife. However, the wife made indirect financial contributions. In addition, my assessment of relevant s75(2) matters leads me to conclude that an adjustment should be made in the wife’s favour.
Accordingly, the principles to which I have made earlier reference so far as the weight that should be given to contributions and rejection of the pure mathematical approach, lead me to conclude that there will be orders that reflect 60% in favour of the husband and 40% in favour of the wife. That has the result in terms of the value of the husband’s superannuation entitlement value being apportioned in the sum of $186,438.00 in his favour and $124,292.00 in favour of the wife.
The agreed value of the wife’s superannuation entitlements is $76,944.00 stated in Exhibit X.
I take into account the parties’ contributions whether directly or indirectly during and since the period of the parties’ cohabitation. The evidence suggests that the wife joined her superannuation fund in 1999.
There are no distinguishing contributions to the wife’s superannuation in contrast to the situation that applied so far as the husband’s superannuation is concerned as referred to in my earlier findings.
Having regard to the lengthy period of cohabitation, the parties’ relevant contributions, the subject of earlier findings, and the assessment made by me of s75(2) matters which favour the wife, I have concluded that it is just and equitable that the orders reflect the proportion of 60% in favour of the wife and the remaining 40% in favour of the husband. That translates into the amount of $46,166.00 attributed to the wife and the remainder of the value of superannuation accorded to the husband.
The effect of my conclusions is that for the purpose of superannuation splitting orders in relation to the husband’s superannuation entitlements, the base amount will be $93,514.00 calculated as follows:
Husband’s superannuation $310,731.00 40% to wife 124,292.00 Wife’s superannuation 76,944.00 60% to wife 46,166.00 Total 170,458.00 Less: Wife retains the whole of her superanuation 76,944.00 Balance (base amount) 93,514.00
I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose
Associate:
Dated: 27 July 2007
IT IS NOTED that this judgment for all publication and reporting purposes be referred to as CLIVES & CLIVES
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