DILLON & DILLON
[2011] FMCAfam 1391
•5 December 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DILLON & DILLON | [2011] FMCAfam 1391 |
| FAMILY LAW – Property adjustment – section 75(2) factors. |
| Family Law Act 1975, ss.90MT, 106A, 75, 79 Family Law (Superannuation) Regulations 2001, Part VI Family Provisions Act 1982 |
| Kowali & Kowali (1981) FLC 91-092 Edwards & Edwards [2008] FMCAfam 1025 |
| Applicant: | MS DILLON |
| Respondent: | MR DILLON |
| File Number: | PAC 78 of 2010 |
| Judgment of: | Harman FM |
| Hearing dates: | 1, 2 December 2011 |
| Date of Last Submission: | 2 December 2011 |
| Delivered at: | Parramatta |
| Delivered on: | 5 December 2011 |
REPRESENTATION
| Counsel for the Applicant: | Ms Druitt |
| Solicitors for the Applicant: | Craddock Murray Neumann |
| Counsel for the Respondent: | Ms Rosic |
| Solicitors for the Respondent: | Karen L Haga and Associates |
ORDERS
The Court allocates to MS DILLON, as required by s.90MT(4) of the Family Law Act 1975, a base amount equivalent to 50% of the interest of MR DILLON held in the [S] Superannuation Scheme to be paid out of the interest held by Mr Dillon.
Pursuant to s.90MT(1)(b) of the Family Law Act 1975, whenever the Trustee of the [S] Superannuation Scheme makes a splittable payment, from the interest, held by Mr Dillon, the Trustee shall pay to Ms Dillon or his/her administrators, executors, beneficiaries, heirs, or assigns the entitlement calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001, and there shall be a corresponding reduction in the entitlement Mr Dillon would have had in the [S] Superannuation Scheme but for these Orders.
Order 2 has effect from the operative time which is 4 business days after service of this Application upon the Trustee.
The Trustee of the [S] Superannuation Scheme in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulation 2001, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of, and make payment to, the wife in accordance with Order 2 of these Orders.
In the event that the Trustee expresses any difficulty with or objection to compliance with the above order as to its form then leave is granted to the parties to apply in chambers for amendment of the form of the order under the Slip Rule.
Within 14 days of the date of these orders the wife shall make available for collection by the husband’s nominee the [N] painting “[omitted]” and the wife shall ensure that the painting is in good condition and shall do all acts and things necessary to prevent and damage to or deterioration of the painting whilst in the wife’s possession, custody or control.
Apart from as provided otherwise herein the husband and wife shall have the sole right title and interest in:
(a)Any chattels, goods, furnishings and other property which is, at the date hereof, in their possession respectively; and,
(b)Any moneys, shares, debentures, investments and superannuation entitlements which stand in their sole name or to their credit respectively at the date hereof.
In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders, the Registrar of the Court is appointed pursuant to s.106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
Upon the expiration of the Appeal period and in the event that no appeal is lodged that all exhibits then be returned to the party who tendered same and that all material produced on subpoena be returned to the person or organisation who produced same.
All outstanding Applications and Responses are withdrawn and dismissed and all issues are removed from the list of matters awaiting hearing.
IT IS NOTED that publication of this judgment under the pseudonym Dillon & Dillon is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 78 of 2010
| MS DILLON |
Applicant
And
| MR DILLON |
Respondent
REASONS FOR JUDGMENT
These are proceedings involving competing applications for property adjustment between the Applicant, Ms Dillon, and the Respondent husband, Mr Dillon. The proceedings were commenced by way of Application filed on 14 February 2011. A Response was filed on 28 March 2011.
I cannot pass in relation to the procedural aspects of the matter without recording and reaffirming comments that were made by me during the trial that the manner in which these proceedings has been conducted are exemplary. The matter has proceeded promptly and quickly, and such that these parties have had the quickest possible access to justice to enable the conclusion of their matter.
On the first return date of the proceedings an interim hearing was conducted and a number of interim orders were made and the proceedings adjourned to a Conciliation Conference. Extensive directions were made for preparation in relation to that Conciliation Conference which were complied with.
The Conference conducted by the Registrar, regrettably, did not resolve all issues between the parties, and the matter was accordingly adjourned for further mention and directions. On that date, hearing dates were set.
The parties attended to preparation for hearing in accordance with orders made by the Court. It is regrettable that such matters are, and should be, the subject of comment by the Court, however, it is so remarkable for parties and their attorneys to have so fully and properly comply with directions and to enable matters to move properly and efficiently to determination when that is what is required.
I cannot help but congratulate the attorneys for both parties for doing that which on one somewhat cynical level is expected of them in any event, but which has been attended to in such a fashion as to limit cost, stress and inconvenience to both of these parties and to minimise the use of the Court’s resources.
The proceedings otherwise have occupied a little short of two days of hearing, and will be concluded today by these orders.
The Parties’ Proposals
The proposals of each party are largely as set out in their respective Application and Response, and as modified by the case outline documents filed by each of them and as modified, certainly in the case of Ms Dillon, in closing submissions by Counsel. The amendment sought in closing submissions was not substantial, and certainly not such as would cause any difficulty with due process.
In the wife’s case, it is proposed that there would be orders that resulted effectively in a sixty-five/thirty-five per cent (65% - 35%) division of the pool in her favour, at least as regards tangible or non-superannuation assets.
That arises from the position advanced that findings as to contribution would favour Ms Dillon as to fifty-five per cent (55%), and an adjustment of up to ten per cent (10%) would then be made with respect to s.75(2) adjustments.
The orders ultimately proposed at hearing, however, represent something substantially less than that position, although that calculation of a position is relevant, and I will return to it.
Mr Dillon, in his case, urges a finding as to fifty-seven per cent (57%) in his favour as regards contribution. It is asserted that contributions favour him due to contributions made late in the marriage by way of receipt of an inheritance.
It is also sought, and perhaps the point of greatest departure in the positions between each of these parties, that the husband’s superannuation interest in a [S] Superannuation scheme fund, being a defined benefit fund in payment phase, be treated not as an asset, but as a financial resource.
There is otherwise no significant issue between the parties as to the present pool, although there are a number of small issues which I will address.
The Parties’ Evidence
I have read the material filed by each of the parties in support of their respective Application and Response.
In Ms Dillon’s case, that has been evidenced by herself, and by a professional witness, Mr S, who has spoken to issues with respect to the husband’s superannuation interests. Mr S was required for cross examination and attended from Canberra by telephone. His evidence during the hearing was augmented by a further hurriedly prepared report and after a number of further issues of the address of which would be of assistance to the Court were identified during his cross examination. The parties sensibly agreed to equally share the expense of further work to be undertaken by him, and which has been the subject of an addendum report prepared by him, which is an exhibit in the proceedings.
That report has addressed a number of matters of particular importance, including the impact of the orders proposed by Ms Dillon upon the superannuation interest of Mr Dillon, the subject of the application.
In the husband’s case, I have read his Affidavit material, together with the Affidavit material by his present wife. Both were required for cross-examination, and skilfully cross-examined for some time.
In relation to the evidence there is a heartening wealth of agreement. The parties are not substantially at odds as to most aspects of their past history, and that is perhaps a sensible and cogent position to adopt having regard to the length of their relationship.
There has been little, if any, issue in the proceedings with respect to valuation, and to the extent that there is any absence of agreement or of expert evidence with respect to value, it is with respect to assets that are of fairly inconsequential value having regard to the larger ticket items, if I might refer to them as that, being real estate and superannuation.
Dispute has arisen with respect to, for instance, the value or the treatment of value of furniture and motor vehicles. The parties are not dramatically at odds with respect to those items, and I propose to deal with their values on the basis of admissions against interests by the party who retains each of those items.
A substantial issue had arisen with respect to the value of a painting, being a [N] painting, which has been the subject of prior litigation under the Family Provisions Act 1982. However, the parties jointly commissioned a valuation which ended that controversy and that valuation is an exhibit in the proceedings.
Chronology of Events
Ms Dillon was born [in] 1941, and is accordingly now aged 70 years.
Mr Dillon was born [in] 1949, and is now aged 63 years.
Prior to this relationship, Ms Dillon had been married, and there is a child of Ms Dillon’s prior relationship, [X], who is now very much an adult, having been born in 1972. [X] had, however, lived with the parties for the majority of their relationship with each other.
The parties met in or about 1975-1976, and commenced a relationship, although not residing together on a full time basis at that time.
Between August 1976 and November 1976, on Ms Dillon’s evidence, which I accept for reasons that I will shortly explain, she and Mr Dillon began to stay overnight with each other at Ms Dillon’s home for up to four (4) nights per week, sometimes for the entire week. Otherwise
Mr Dillon was, at that time, staying at his mother’s home.
During this period of time, or shortly prior to the parties’ marriage,
Ms Dillon received, by way of settlement from her former husband, a sum of $16,000. Comment was made during submissions, in
Ms Dillon’s case, that whilst that would not appear on 2011 values to be a significant sum of money, it does, however, represent a significant initial contribution by her in 1976 terms, and I accept that position.
The parties were married and commenced full time cohabitation on 14 May 1977. Shortly thereafter, the parties moved to Western Australia to take up employment in the case of Mr Dillon. In May 1978, the parties returned to Sydney. [In] 1978, a child of the relationship, [Y], was born. She is now 33 years of age.
On 8 November 1978, the parties purchased their present matrimonial home at [W] for the modest sum in today’s terms, of $51,500. A mortgage of $19,000 was obtained from the National Australia Bank and the funds which have been received by Ms Dillon by way of property settlement, together with some combined savings, made up the balance of the purchase price and associated costs.
In May of 1979, Mr Dillon commenced [working] at [T] in [omitted]. Mr Dillon continues [working] on contract with [T], having left full time employment with that institution more recently.
In 1987, the parties purchased a property at [C] for $64,000. The parties continued to be frugal in their financial affairs, and it was conceded by Mr Dillon that the majority of financial management during the relationship was undertaken by Ms Dillon.
In the early 1990s, the mortgage over the matrimonial home was paid off, and that property rendered unencumbered.
In 1997, the parties sold their property at [C] for $98,000. That property was, at the time of sale, unencumbered.
In September 1997, the parties purchased an investment property at [E] for a sum of $278,000.
In early 2002, whether fuelled by the experience of the investment unit at [E] or otherwise, they, in concert with three other couples, commenced to be engaged in building villas at [omitted].
In March 2003, and it would appear connected with the above development enterprise, the sum of $50,000 of the parties’ funds was lent by Mr Dillon to a business, [name omitted], which operated to build villas. That loan ultimately was not repaid, and, together with a further sum of $15,000 expended in legal fees and attempting to recover the money, the parties lost those funds.
It was not raised in the case that this should be treated as wastage, and indeed, it would be difficult in the context of that transaction for that argument to have been sustained, if made, which it was not.
In February of 2005, Mr Dillon’s mother passed away. Prior to her passing, it would appear clear from the evidence, and certainly from material under Mr Dillon’s hand, and attached to his affidavit, that the parties, and in particular Ms Dillon, had been substantially involved in supporting Mr Dillon’s mother.
Following Ms Dillon’s death, Mr Dillon was to receive, and did in fact receive, a sum of $81,641 from his mother’s estate. Mr Dillon subsequently challenged the will, and a further sum of $50,000 was awarded, although about one half of that was consumed in legal fees.
That also gave rise to the issue of possession of a [N] painting which has been the subject of proceedings in another Court. It has also been the subject of extensive correspondence and discussion and it would appear some real tension between Mr Dillon and his brother, who asserts a half interest in the painting.
It is not a matter of great moment in these proceedings, as events have transpired and as agreement would appear to be abundant between these parties, that the painting will pass to Mr Dillon without any cash changing hands in exchange.
There is, however, a contention by Mr Dillon that the painting is subject to joint ownership between him and his brother, whereas
Ms Dillon asserts that the painting was received by them as a wedding gift.
In 2005, if not in fact earlier in 2004, Ms Dillon became aware of an affair that was existing between Mr Dillon and his present wife. That much would appear clear as Mr Dillon’s evidence and that of his present wife suggests that in 2004 they began “keeping company”. That would appear to be a somewhat genteel and delicate description in contradiction to that asserted by Ms Dillon of an affair, but in any event, their respective evidence would appear clear that they commenced to have some form of committed relationship. Mr Dillon’s present wife’s evidence is such that she, in fact, views that this is when their commitment to each other commenced.
Certainly that relationship involved regular and frequent meetings on at least a weekly, if not more frequent basis, as well as a sexual relationship.
I do not highlight those matters to suggest that they have any great relevance as regards the exercise of discretion under Part VIII of the Family Law Act 1975, however, it is clearly a matter of some great significance and contention regarding the ultimate demise of the relationship between these parties and was clearly, during the course of evidence and in particular cross-examination of the Mr Dillon’s present wife, a matter of some real emotional distress to Ms Dillon, which I can understand.
However, as I have indicated, it does not impact significantly upon the exercise of my discretion, if at all, in relation to Part VIII jurisdiction, although, quite clearly, there was some financial investment in pursuing that relationship, although that was somewhat minimised by both Mr Dillon and his new wife.
That also is particularly related to a suggestion that at some time after that relationship had commenced, and in 2006, that Mr Dillon’s present wife had been pregnant, had undergone a termination, and had demanded various sums of money, although it was asserted by both
Mr Dillon and his present wife that no money, in fact, changed hands in relation to that procedure.
In February of 2006, the parties sold their investment unit for $540,000. Of that fund, $150,000 was paid into Ms Dillon’s [S] Superannuation Fund, and the balance applied towards payment of a loan.
The parties also had a quarter share in a common villa, and they received a further sum of about $157,500, which was also applied to payment and discharge of liabilities.
During 2006, Mr Dillon received a redundancy payment from [T] of about $50,000. This was also paid into the Ms Dillon’s [S] Superannuation Fund.
Mr Dillon has continued in employment, if I can use that term in its loose sense, with [T] either on a casual, part time or contract basis since, and continues to do so.
In 2007, the parties deposited a sum of about $40,000 into a [omitted] Credit Union account in their daughter’s name. Further funds were subsequently deposited such that the total amount advanced would appear to be in the order of $58,000. It is asserted in Ms Dillon’s case that these were funds advanced by them by way of gift to their daughter to assist her in the purchase of real property in the United Kingdom. Mr Dillon asserts otherwise.
It is asserted in Mr Dillon’s case that that amount would be added back notionally, although his evidence was clear that he does not expect to recover it, nor seek to press for repayment by the daughter of these parties, but he does seek to have it ascribed as a notional portion of the total pool of property.
For reasons that will become apparent, I do not accept that this was the basis of the transaction. Lest I’m wrong in that regard, I observe that it would make little or no difference to the outcome that would otherwise be arrived at in these proceedings bearing in mind the other findings I propose to make.
On 30 October 2008, the parties separated and they have lived separately and apart since that time and, in fact, have been divorced and Mr Dillon has remarried.
In mid December 2009, Mr Dillon advised Ms Dillon that he was proposing to sell the [E] investment property as he was financially constrained and could no longer afford to meet his living expenses, at that time being largely or solely from his superannuation payment from the defined benefit fund to which I have referred.
At that time, Mr Dillon was dividing the pension that was being received from that fund between himself and his Mrs D. His evidence is that he continued to do that from separation until the eventual sale of the [E] property, and so as to ensure that Ms Dillon continued to cooperate in that sale. The consequence of that, however, is that immediately upon completion of the sale of the [E] property, Mr Dillon ceased to make such divided payments with respect to the superannuation fund. As a consequence of that, and for a significant period of time, approaching two years, the pension was received entirely by Mr Dillon.
That is not to suggest any criticism of Mr Dillon. It is a pension entitlement in his name, and he is entitled to receive it, however, it has had the effect that he then retained the entirety of that benefit, and continued to do so until orders were made by this Court on an interim basis, as referred to above.
The parties were each challenged on their evidence and were cross-examined on different issues and for different periods. The cross-examination of Ms Dillon was brief, and focused entirely upon one aspect of her evidence. That was the series of transactions relating to transfers of funds to, and the subsequent operation of the [omitted] Credit Union accounts in the name of the parties’ daughter.
It was suggested through that cross-examination, but with little effect and certainly no concession from Ms Dillon, that Ms Dillon, in effect, had control of, and full access to those funds.
Mr Dillon’s evidence was that the funds were invested to be returned to the parties, and simply put into their daughter’s account for safekeeping. Ms Dillon’s evidence, as I have indicated, was that the funds were gifted to the daughter to enable her to purchase real estate. It is unclear whether real estate has in fact been purchased. Beyond that area of cross-examination, Ms Dillon’s evidence is unchallenged, and accordingly, I accept it.
Mr Dillon was cross-examined more extensively and across a broad range of his evidence. A number of propositions were put to Mr Dillon regarding the Applicant’s version of events where they were in conflict with the husband’s version of events. By and large, although not unanimously, Mr Dillon conceded when such propositions were put to him, saying “She’s likely to be correct on that.” No Browne & Dunne (1893) 6 R 67 (HL) issue could be suggested to remain after the skilful and extensive cross examination undertaken by Counsel for the wife.
I accept the concessions by Mr Dillon that Ms Dillon’s recollection of financial arrangements, consistent with what was conceded to be her primary conduct of the financial affairs of the parties during the relationship, is and was more accurate than his own.
Mr Dillon’s evidence also, at times, appeared disingenuous. The evidence given by him with respect to, for instance, the transactions regarding the transfer of funds to the daughter’s account left me somewhat confused and unclear as to what was in fact proposed by him. Whilst it was asserted that the funds were initially transferred jointly and as a form of savings, it was later suggested that the transactions were undertaken entirely by Ms Dillon. The two cannot sit together.
Equally, nothing was advanced in Mr Dillon’s evidence, either during cross-examination or in his evidence-in-chief, that would suggest any logical or rational basis for the parties placing funds into an account of their daughter for the purpose of saving. Further, that is certainly at variance with the practice of these parties throughout their thirty-one (31) year marriage.
Accordingly, and to the extent that there is any variance between the evidence of the parties on issues of significance (and there is variance on their evidence as to a number of matters which are of little relevance to the decision I am called upon to make), I prefer and accept the evidence of Ms Dillon.
The other aspect of the evidence between the parties which I will deal with in terms of the legislative pathway relates to the financial affairs of the parties post separation, particularly in relation to the sale of assets and transactions that have occurred in relation to the draw-down of funds from superannuation entitlements and the like.
It is common ground between the parties that following separation the investment property at [E] was sold and as a consequence of that,
Mr Dillon received funds in the order of $660,000. Those funds were initially invested in a term deposit and earned interest which would appear to have accumulated to the extent of approximately $35,000 as disclosed by Mr Dillon’s income tax return on which he was cross-examined.
It would also appear that there is a tax liability which will arise from those funds of approximately $8900. However, the totality of that interest was retained by Mr Dillon and applied by him towards the purchase of his present home at [R] and associated costs and expenses, including stamp duty.
There is a significant issue between the parties and in the positions advanced by them and addressed in submissions as to how one would treat that transaction, and indeed the receipt of those funds, their subsequent application and the existing asset at [R].
Mr Dillon has also drawn down two separate amounts from a second superannuation fund he holds with [F] Super. The first draw-down of $160,000 is conceded as being an amount that must be added back. Those funds were applied in part towards the purchase of the property at [R] as well as to the purchase of furniture, furnishings and payment of other expenses. In any event, it is conceded that all of those amounts would be added back.
However, a further sum of $20,000 was drawn from the same fund, and that would not appear to have been known by or disclosed to Ms Dillon until the commencement of evidence in these proceedings. Accordingly, that has had the effect of reducing Mr Dillon’s interest in [F] Super from an amount in excess of $185,000 to its present balance of $6,545.
The other aspect relates to the property purchased with the funds referred to above. Mr Dillon’s evidence is clear that he purchased a home at [R], and sensibly so. It was sought to criticise Mr Dillon for having done so and that having been described as “somewhat dangerous in the circumstances”, bearing in mind the potential for add-backs.
It is clear from Mr Dillon’s evidence that the sole financial contribution to that purchase came from him. Mr Dillon’s present wife did not make any financial contribution to the purchase. Notwithstanding that, the home is owned as tenants in common in equal shares and Mr Dillon’s evidence was that he had “given one half of the property to the his new wife”.
There is, however, a legal interest in Mr Dillon’s present wife, no matter how that came about and it is instructive to bear in mind at all times that this legal interest exists. It is not a mere equitable interest or an asserted interest in equity. It is a legal interest recorded on title.
The orders that are proposed by Ms Dillon, thankfully, do not seek in any fashion to interfere in that interest, as to do so would require notice to Mr Dillon’s present wife as a third party, possibly her joinder as a party, and this would create a number of jurisdictional issues. None such arise, however, as the relief that is proposed by Mrs D does not seek any order that would affect or impact that property, either through sale or through its use as security.
Evidence was also given by both Mr Dillon and his present wife that they have recently (and again, that would appear something disclosed only on the first day of trial) made application for a mortgage or line of credit secured against the [R] property. That line of credit is for an amount of two to three hundred thousand dollars and it was suggested that $30,000 was required by Mr Dillon to meet legal costs and that a number of other amounts totalling about $25,000 were required on
Mr Dillon’s present wife’s evidence to meet a number of expenses in her name.
There is no evidence that the loan has in fact been approved and it does not suggest on the evidence that funds are presently available. There may be a borrowing capacity available if the loan is approved. If the loan is ultimately refused, then no such borrowing capacity exists. Nothing turns upon that issue, however, as no order is sought that would require a cash payment.
The other issue that arose from evidence is that following separation, and during the period that Mr Dillon was solely in receipt of the superannuation pension in his name, he would appear to have had sufficient wherewithal, without recourse to capital, to be able to fund payment out of a credit card in his now wife’s name with a balance of somewhere between eight (8) to ten (10) thousand dollars. Mr Dillon’s evidence is that the credit card was about nine (9) thousand dollars. His present wife’s evidence was that it was an amount of eight (8) to ten (10) thousand dollars, and latter asserted to have been in excess of ten (10) thousand dollars but without any further specificity.
The Legislative Framework:
The four-step approach that the Court is required to adopt has been clear since early cases such as Ferraro & Ferraro (1993) FLC 92-335 and reinforced in more recent cases such as AJO v GRO [2005] FamCA 707.
I am required to first identify the pool of assets, usually at the date of trial subject to the potential for add-backs or other adjustments by reference to case law such as Kowali & Kowali (1981) FLC 91-092 and Townsend & Townsend (1995) FLC 92-569.
Secondly, I’m required to assess the parties’ contributions in a broad sense and as identified in s.79(4) of the Act.
Thirdly, I’m required to consider what adjustments, if any, should be made, having regard to the factors set out in s.75(2) of the Act.
Finally, I’m required to consider whether the orders then arrived at through such calculations and methodology fall within a reasonable exercise of discretion and are just and equitable.
Section 79 compels that any order that is made by the Court must, irrespective of the assessment of contribution and s.75(2) factors, be just and equitable.
In Burgoyne & Burgoyne (1978) FLC 90 - 467 the Full Court have made it clear that it is impossible for the Court to determine whether any particular order is just and equitable without first determining the nature and extent of the properties of the parties at the time that the Court is making orders.
It is on that basis that I will now turn to a consideration of the asset pool.
The Asset Pool
There is large agreement between the parties as to the significant assets and their value and subject to comments that I will make here under. The substantial parcel of real estate owned by the parties is the property at [W] with has an agreed value of $875,000. That property is unencumbered.
Since separation Mr Dillon has acquired an interest, being a one-half interest as tenants in common with his present wife in the property at [R]. The value asserted to Mr Dillon’s interest in that property is equally not cavilled with as being $380,000.
Issue arises as to whether that value should be included or whether some other amount should be included, representing funds actually applied towards the purchase. I propose the latter.
I have not included the value of Mr Dillon’s one-half interest in the [R] property as:
a)Mr Dillon has acknowledge that he made the sole contribution of funds towards the purchase of that property together with all associated costs such as stamp duty;
b)Mr Dillon’s evidence, as I’ve referred to, makes it clear that he gave one half of the property to his new wife. Accordingly, and to adopt the terminology used by Mr Dillon in his evidence, that could not be seen by me as other than being a premature distribution of property by reference to Kowali and Townsend; and,
c)Should Mr Dillon have not chosen to purchase that property, and I am not in any way critical of him for doing so, he would have retained in his hands various funds, including the $660,000 from the sale of [E], the $180,000 in total drawn down from superannuation, together with the funds received by him by accumulated interest, being approximately $26,100 from the investment of the proceeds of sale of [E].
Accordingly, I propose to include those amounts as notional add-back which should be considered for the purpose of these orders.
The parties each have a motor vehicle. There is no dispute between the parties that Ms Dillon’s vehicle is worth about $3000. Mr Dillon’s vehicle is asserted by him to be worth $27,000 and by Ms Dillon as $30,000. In the absence of any evidence, I propose to accept as an admission against interest the value asserted by Mr Dillon of $27,000.
Ms Dillon asserts that she has furniture and contents to the value of $10,000, excluding a [N] painting, and that figure would appear from Mr Dillon’s case outline to be accepted. I propose to include that figure as an admission against interests.
Mr Dillon has disclosed furniture to the value of $15,000. For reasons similar to those relating to the [R] property I do not propose to include any value for Mr Dillon’s furniture. That is so as the furniture was purchased with the funds to which I have referred above, and, as I am including those funds to include also a value for items purchased with those cash funds would be to double count.
Both parties have disclosed savings of a very small amount and there is no agreement as to their value, nor any corroborative evidence as to same. Accordingly, I propose to exclude such savings as the parties presently have.
The parties are possessed of the [N] painting and as to whether it is worth its full value of $34,000 in the hands of the parties or either of them or only half of its value need not be determined by me for the purpose of these proceedings, nor is the evidence of same at a satisfactory state where I could determine, as alleged by Mr Dillon, that his interest is only one half.
In any event, that is identified and there is no dispute that the painting will be returned to and retained by Mr Dillon.
There are otherwise superannuation interests of these parties. The superannuation interest of the Applicant has an agreed value of $168,594.
Mr Dillon has two superannuation interests. Firstly, the remainder of his [F] Superannuation fund with a balance of $6,545 as given by him in his evidence. There is also Mr Dillon’s interest in the [S] Superannuation Scheme Defined Benefit Fund, being a pension interest in payment phase.
There is some significant issue between the parties as to the value of that interest and how it should be generally treated, although it would appear clear from the evidence of Mr S, based upon the form 6 responses provided by the fund and his consideration of same, that indeed that fund has a value of not less than $606,000. The fund would appear, from the subsequent evidence and report given by Mr S, to have grown somewhat since his initial calculation. However, that is not a matter of any great moment for the purposes of these reasons.
The superannuation interest of the husband, and as to whether it should be treated as an asset or a financial resource, was the subject of significant submission. In the initial case outline document filed in Mr Dillon’s case, the Full Court is quoted from C v C (2005) FLC 93-220, commencing at paragraph 64 and concluding at paragraph 68, and I refer to and adopt those paragraphs for the purpose of these reasons.
I was also taken to and specific reference made to a Full Court decision of Edwards & Edwards [2008] FMCAfam 1025, being the hearing of an appeal from Henderson FM. In that case her Honour had before her two superannuation interests of the husband, being a [F] Superannuation Fund Interest in accumulation phase, as well as a [D] Retirement and Death Benefit ([D]) in the name of the husband an ascribed value of $313,994.66.
It was asserted, in reliance upon that authority, that I should treat the pension fund in payment phase as having a value equal to the weekly or fortnightly payment in the husband’s hands. Indeed, in that case Her Honour, commencing at para.23, engaged in a discussion as to the appropriate methodology. Her Honour indicated at paragraph 38, quoted by the Full Court in paragraph 24, as follows:
“I have formed the view that a valuation under the regulations (being the value of $313,994) is of less relevance than the value to the husband of the fortnightly payment from his [D] pension entitlement when such an entitlement is in the payment phase. “
There followed a discussion as to the value to be used and the Full Court found no fault in Her Honour’s logic in taking that approach.
What is clear, however, are a number of distinguishing factors in that case, or a number of factors which would vitiate against the position advanced by Mr Dillon.
First, the [D] pension fund in payment phase dealt with by Her Honour had been in existence for some time prior to the relationship and that fund had, in fact, been in payment phase for some fifteen (15) years prior to determination. It was not possible for that fund in the hands of either party to be commuted. So much was agreed.
Secondly, in this case the evidence, particularly that of Mr S, is quite clear. Whilst the pension cannot be commuted in the hands of
Mr Dillon, if a splitting order is made, whether on a cash base amount or a percentage, then the amount that is ascribed to Ms Dillon will be paid out of the fund to her as a cash payment.
That cash payment will no doubt be subject to tax consequences and may also impact upon Ms Dillon’s Centrelink entitlements. However, the fund is commutable in that regard, at least in the hands of one of the parties.
Thirdly, the payments that were being received by the husband in that case, and the fund of itself, were viewed by Her Honour as an asset. Her Honour chose to deal with that asset in a specific fashion, but at no point in her Honour’s reasons, nor those of the Full Court in hearing the appeal from her Honour, was it suggested that there had at any time been an acceptance by her Honour that the pension fund in payment phase was other than an asset. It was purely how Her Honour sought to deal with that asset.
Indeed, Her Honour was faced in that case with the two funds that I have identified, and ultimately Henderson FM made a specific finding as to a percentage interest of the wife in the [D] fund, irrespective of issue as to how the value of that fund was treated. Her Honour ultimately made a splitting order with respect to the remaining fund, which included and took account of the percentage that Her Honour had found referable to the wife in relation to the pension in payment phase.
For that reason I am not satisfied that Edwards would found the submissions put by Counsel for Mr Dillon, that I would exclude the larger of the two funds, being the defined benefit fund, from consideration as an asset.
I am satisfied, however, that in this case I should most assuredly adopt something akin to an asset-by-asset approach, being an approach allowed and an appropriate approach in the circumstances, urged by the Full Court in C v C and by so doing to treat superannuation and non-superannuation assets as property available for division between the parties but in separate pools. Lest I am wrong in that regard, if I were to add the two together, very little would turn upon it as regards the end result having regard to the methodology I propose to adopt and as will be explained.
Contributions
It is asserted in Ms Dillon’s case that there would be a finding in her favour as to fifty-five per cent (55%) with respect to contribution. In Mr Dillon’s case it is similarly asserted that there would be a finding in his favour as to contribution.
The only issues of any great significance, leaving aside the calculation and formulation of the asset pool and notional add-backs addressed above and which will be addressed further, arises from the initial contribution made by Ms Dillon and the introduction of funds by way of inheritance and redundancy by Mr Dillon.
In relation to initial contribution, I have had particular regard to the Full Court’s decisions in SJS & NS (2005) FLC 93-214 and in Pierce & Pierce [1998] FamCA 74. In each of those cases, and particularly so in the case of Pierce, it was highlighted by the Court that an initial contribution is not an extraordinary contribution, it is simply a contribution at a particular point in time which must be viewed and balanced having regard to the totality of evidence and the totality of contributions made by the parties.
I accept, as is submitted in Ms Dillon’s case, that the contribution of $16,000 at the commencement of this relationship in the 1970s represented a substantial contribution. Indeed, on the non-disputed evidence of the parties, it represented something approaching thirty-five (35), if not forty (40), per cent of the purchase price of the property at [W] which has remained the matrimonial home for the parties throughout the relationship.
Similarly, I accept that the introduction of funds by Mr Dillon from the estate of his mother, which includes the [N] painting to which I have referred, is a significant contribution at the point in time at which it was made. Whether they balance each other or not is determined not by a static comparison of the two at the point in time that they were made but in the overall assessment of contributions between these parties for the totality of their relationship.
These parties have had, by any stretch of the imagination, a long relationship. They have been together in excess of thirty (30) years, which in this day and age is perhaps extraordinary of itself. The length of the relationship between the parties means that the parties have made a myriad of contributions throughout that period of time.
It is conceded, it would appear clear from Mr Dillon’s evidence, that the majority of homemaker and parent contributions were made by
Ms Dillon. However, throughout the relationship, the majority income contribution would also appear to have been made by Mr Dillon.
However, as the Full Court has made clear not only in Pierce but in authorities since the commencement of this legislation, a consideration of contribution is not a mathematical or precise exercise. The assessment of contribution is to some extent, from the perspective of a scientific mind an exercise in “bucket chemistry”. It is a matter of balancing everything that has occurred during the relationship between the parties and doing so within the context of the nature of marriage.
These parties made a joint commitment to each other and, at the time of their marriage, committed and contributed all of their efforts and resources.
Clearly, from 2004 onwards there is good reason why Ms Dillon would be of the view that this had ceased to be the case at least as regards
Mr Dillon. However, I am satisfied, by reference to the totality of contributions made by each of these parties throughout their relationship, that contributions should be assessed as equal.
Adjustments pursuant to s.75(2)
In relation to s.75(2), there are a number of factors that would potentially impact upon the parties.
Ms Dillon has left paid employment and her working life, it would appear, without any criticism of her at all, as she has been a hardworking woman, wife, mother and contributor to society for all of her life and is now entitled to the rest and benefit that her stage in life brings her, is over. Ms Dillon has left paid employment and is accordingly presently remunerated only through the receipt of Centrelink benefits, which s.75(2) directs that I not consider as income, as well as funds that have been received by her as a consequence of orders made by this Court dividing the fortnightly payment received by Mr Dillon from his superannuation fund which fund was entirely created and contributed to during the relationship.
In Mr Dillon’s case it is asserted that whilst he is still working, that the nature of his employment is such that his income is unreliable and limited, and in the absence of the funds received by him from his superannuation pension, that he would have difficulty making ends meet.
A great deal of cross-examination turned upon a consideration of
Mr Dillon’s present financial circumstances, and in particular by reference to his most recently sworn financial statement filed on
21 November 2011, being only a week prior to the hearing. There were a number of what would appear to be typographical errors within that document. I am happy to accept that indeed a number of them have arisen as a consequence of amendment of the document whilst being settled and completed and the requirement to transfer figures from one portion of the document to another, particularly from various parts commencing at part (c) onwards to part (b), being the financial summary.
However, what is clear from that document is that, notwithstanding the assertion by Mr Dillon that he is financially strapped at present and not making ends meet, there is an excess of at least $170 per week, if not more, based on his present income. That is so, even taking into account that Mr Dillon’s household does not just comprise himself. It comprises his present wife, who is in some limited part-time employment and her two adult children at least one of whom is in paid employment but not contributing towards household expenses
It would appear from the financial statement that a number of figures are perhaps greater than will be met at present, if not greater than they have been in the past. That is particularly so with respect to tax. On that basis, it would appear clear that on the present income received by
Mr Dillon into his household from his own efforts or his own resources that he is able to meet his expenses. That is not to suggest that he lives a lavish lifestyle, but similarly nor does Ms Dillon.
In relation to s.75(2) generally, I note the age and state of health of the parties: Each of the parties led lay evidence as to a number of health difficulties that presently or may in the future impact upon their earning capacity. However, there is no medical evidence to support those assertions and it is sensibly conceded by both Counsel that one could place no real weight upon that.
Ms Dillon is some years older than Mr Dillon. That is, of itself, again no criticism; Ms Dillon is clearly a hardworking and motivated woman who has ensured that she meets her responsibilities throughout her life. However, she is not in paid employment and it would be unreasonable, although not impossible, to expect her to return to paid employment to meet her expenses at this point in her life. She is entitled to the fruits of her labours and should be entitled to now enjoy retirement.
Mr Dillon, it is asserted, has only three years left to work before he reaches the age of 65. There is no requirement that he retire at 65. There is suggestion in the evidence that part of the purpose for having applied for a line of credit and to borrow funds is to set up a business, but there is no evidence upon which a finding that this will occur or is even anticipated could be made. But I am satisfied, however, that this factor favours Ms Dillon.
The income, property and financial resources of the parties and their capacity to participate in gainful employment.
Mr Dillon is certainly able to participate in gainful employment and is at present. The income, property and resources of each party in this case is beneficial in that each has been in a position to rehouse themselves, or to remain in housing, and without any appreciable ongoing cost. Neither party lives in accommodation encumbered by mortgage.
Whether either party has the care or control of a child under 18, is not relevant.
The commitments of each party to support themselves or any other person or child that they have a duty to maintain.
It was asserted in Mr Dillon’s case that he has an obligation and a commitment to support not only himself but his household, comprising his wife and her two adult children.
The difficulty with that submission, however, is that Mr Dillon has no legal obligation to maintain any of those persons. Mr Dillon’s present wife is perfectly capable of obtaining paid employment and has recently completed a qualification to do so. Mr Dillon’s wife’s evidence is that she wishes to return to [omitted], her country of origin, to undertake what would appear to be charitable or community-based employment and to give back to her community of origin. That is an admirable cause. However, if she were to remain in Australia, she is now qualified as a [omitted] and able to obtain employment as such.
One of the children of the Respondent’s wife is in paid employment; although her evidence was that until he is earning more than $500 net per week that he is not expected to contribute to the household. That is, of course, more than Ms Dillon is earning and yet she is required to maintain herself. Neither party, in any event, has any legal duty to maintain any person other than themselves.
The eligibility of either party to receive a pension or other entitlement, including by way of superannuation.
Ms Dillon is in receipt of Centrelink benefits at present, as well as receiving, by way of Court order, one half of the nett amount (it being the subject of some controversy as to deductions for the benefit of
Mr Dillon prior the pension payment being split) of the pension received by Mr Dillon from the defined benefit fund.
Mr Dillon receives the remaining half, as well as income from employment as a contractor with [T].
Each of the parties will on retirement be entitled to receive some form of Centrelink, possibly of comparable value; although, as Mr Dillon is married, it may be that his entitlement is reduced or dispensed with.
Each of the parties, absent any order by this Court, will have a superannuation entitlement, although, Ms Dillon’s will be modest at the very least. Mr Dillon would, on his proposal, otherwise retain the benefit of the some $700 per week, or $1400 per fortnight, from the defined benefit fund in payment phase of which he is a member.
Where the parties have separated, a standard of living that in all the circumstances is reasonable:
Whilst neither party made specific submissions with respect to this factor and although I am very grateful to Counsel and each of them for the submissions that they have made, this would appear to be the substratum of the dispute and issue between these parties.
It is often described, and indeed in the explanatory memorandum leading to the introduction of superannuation-splitting provisions within the Family Law Act it was so described, that there is historical and economic disadvantage to a parent within a marriage who has absented themselves from paid employment to make, as Ms Dillon has, the majority homemaker and parent contribution whilst the other parent has continued in paid employment, being, as it were, the breadwinner and accumulating, as it were, the nest egg for retirement.
The standard of living that each of these parties presently maintain is comparable, although it would appear to clearly favour Mr Dillon. He has the benefit not only of financial companionship but emotional companionship, and he has pursued this path to his own advantage. He is entitled to do so and nothing turns upon that. However, Mr Dillon is in a position whereby he has been able to rehouse himself in a perfectly new home, which one would hope is not requiring him any significant maintenance or improvement, with not only a new partner but, in effect, family, and to be able to maintain himself through both wages, earnings and contract payments, as well as that which is received by him from his superannuation pension.
Ms Dillon is not in as fortunate a position, and if orders were made as proposed by Mr Dillon, that would see such a substantial difference in the living circumstances of each of these parties as to represent complete injustice and inequity.
The standard of living that these parties had for thirty one (31) years of their marriage and which they had planned towards was a joint retirement which would be funded by the defined benefit fund and pension that would be received by Mr Dillon.
Whilst this is not a Court of contract and I do not approach this case from any such position, it is clear that what the parties had arranged and bargained between themselves, whether they had spoken it out loud, reduced it to writing or simply gotten on with it on that basis due to biology and Ms Dillon’s requirement to give birth to the child of their relationship and to thereafter continue in the primary role of parenting, is that Mr Dillon would work, accumulate income and accumulate retirement benefits which both parties would have the benefit of on retirement.
The separation of these parties, and indeed remarriage, has had the consequence that this part of the bargain, as it were, would appear to have been unilaterally terminated.
It is not just and equitable in my mind, and I will deal with that more specifically as part of the fourth step, to suggest that such a disparity in standard of living and retention of income producing assets sanctioned by orders made by this Court is appropriate.
The contribution made by either party to the income earning capacity, property and financial resources of the other party.
Clearly in this relationship, the arrangement that these parties arrived at, again whether verbalised or otherwise, was that Ms Dillon would undertake the majority of homemaker and parent duties and Mr Dillon would be the household income earner.
That is what they did. That is what has happened.
To that extent and whether I am to treat Mr Dillon’s superannuation entitlements as assets or resources (and I am satisfied they are both)
Ms Dillon has clearly, in my mind, contributed to them. She has, through her actions and through her performing her part of the bargain, engaged in the marriage, undertaken duties within the home and for the parties and the children comprising the household, and both of these parents have conducted a joint life for thirty-one (31) years in the expectation that on retirement they would both receive the benefit of their labours.
If I were to make orders as proposed by Mr Dillon, only he would receive the benefit of both parties’ labours in relation to superannuation by retaining the only significant income producing asset.
The duration of the marriage and the extent to which it has affected the earning capacity of both parties:
These parties have been together for over thirty (30) years.
They are now divorced and, as a consequence of the length of the relationship and Ms Dillon’s absence from employment during it, she has not accumulated superannuation interests to support her in her retirement. Indeed, but for the injection of funds which arose from the sale of assets and the receipt of other monies, Ms Dillon would have no superannuation entitlements to speak of.
It is to be remembered that the parties had agreed to contribute funds from the sale of property and the like to a superannuation fund in
Ms Dillon’s name. That, to my mind, must suggest and corroborate the joint intention of these parties that superannuation would be funded for both of them in retirement.
Ms Dillon’s earning capacity, I accept, is at an end. Again, that is not a criticism of her. She is entitled to her leisure, or relative leisure, after many years of working very, very hard.
Mr Dillon is similarly going to be entitled to his leisure on his retirement after many years of working very, very hard.
However, what is proposed on one case is that retirement would be for one party significantly more comfortable than the other.
If either party is cohabiting with another person, the financial circumstances relating to the cohabitation.
Clearly, Mr Dillon has re-partnered and remarried and is in a relationship with a partner who is in limited paid employment at the moment, a household with others in paid employment and with a partner whose capacity to obtain far more remunerative employment is manifest.
Any other fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
This perhaps ties in with factors described above. These parties will both need to fund their retirement, by and large; although, one or both may have some limited entitlement to Centrelink benefits.
However, for both parties to maintain the standard of living that in all the circumstances is reasonable, or as reasonable as could be approximated having regard to the circumstances of their lengthy marriage, and to be able to maintain themselves with some dignity would require, in my mind, that I include Mr Dillon’s superannuation fund and in particular the larger of those two funds, being the defined benefit fund, as an asset and approach its division not only on its asset value but also on the basis that the income that the fund generates should be divided between these parties.
If the parties had remained together they would have both received the benefit of that fund to which both have, whether directly or indirectly, contributed, and I am satisfied it would be entirely unjust for the fund to be retained or substantially retained by one party to the disadvantage of the other.
Similarly, the facts and circumstances of this case are such that both parties now have access to and reside within unencumbered real estate. That is of great benefit to them, as it will enable them to support themselves and such others as may be part of their life from time to time now and in the future, as well as allowing and enabling each of them to devote their income, such as it is, to their day-to-day maintenance and upkeep rather than housing cost.
The choices that have been made in that regard, whilst they have been criticised in Ms Dillon’s case, are not criticised be me. Mr Dillon has prudently purchased accommodation in which he resides. These parties are lucky to be in or to able to put themselves in such a position. Whether the manner in which he has sought to record the title of that property is advantageous to him is a matter for Mr Dillon and need not concern me, save to the extent that I if I had been asked to make any order that affected that property, complication would have arisen as a consequence of the legal interest of the his new wife.
By considering all of the above factors I am satisfied that certainly in relation to tangible assets Ms Dillon would be entitled to an adjustment of not less than five per cent (5%) and, as submitted by her Counsel, as much as 10%. The adjustment that might occur in the Ms Dillon’s favour in that regard is tempered by my intention to make an order that will result in the treatment of superannuation assets on an equal basis and a division of those assets in specie so as to ensure that both have the benefit of an income-producing asset or at least potentially so.
Justice and equity
The fourth step of the process and perhaps the most fundamental in many regards is the requirement to consider that the orders to be made by the Court are just and equitable.
The Full Court in Clauson (1995) FLC 92-595, and again in C v C, were clear on describing that Part VIII determinations involve a broad discretion. In C v C, the Full Court was also clear that the Court can apply the same or a different percentage to superannuation and to non-superannuation assets and may deal with superannuation either in specie, by dividing it, or by treating it in some other fashion such as to include it in the total asset pool and to offset it’s value against other assets.
I accept that the Court has a broad discretion and can choose between leaving the entirety of the fund in Mr Dillon’s hands or transferring the entirety of the fund to Ms Dillon. The Court can also offset it against other assets if that is appropriate, although, it has been made clear, both through explanatory memoranda, the second reading speech and subsequent interpretations by the Full Court including in C v C, that some caution would be urged in that regard, noting the dramatically different nature of such assets.
I accept in this case that I should treat superannuation and non-superannuation assets as separate pools. Lest I am wrong in that regard, if I were to add them together I note that this would produce, overall, the same dollar value. However, I would still be inclined to make orders which treated superannuation in specie so as to divide it rather than to offset it against other assets. This is particularly so given:
a)There are no other assets against which it could be offset without requiring the sale of Mr Dillon’s home which would give rise to a myriad of difficulties, including legal and jurisdictional issues as regard the parties;
b)No such order is sought; and,
c)Any drawing of funds, whether by way of secured mortgage against that property or otherwise, would erode the income in reality available to Mr Dillon and defeat the purpose of the orders I propose to make.
Overall, I am satisfied, having regard to the above assessment of contribution and s.75(2) factors, that Ms Dillon would be entitled to receive not less than fifty-five per cent (55%) of the non-superannuation assets and is entitled to receive fifty per cent (50%) of the superannuation assets.
In that regard, and again returning to the pool, I note that the areas of contention between these parties would, on the basis of the above assessment, become irrelevant. On the basis that Mr Dillon has already drawn a sum of not less than $160,000 from his [F] accumulation superannuation fund, that would appear, by and large, to equate to and approximate Ms Dillon’s superannuation fund.
To the extent that there is the additional drawing of $20,000, I note that there is also a tax liability, which has arisen in relation to interest, which would temper that and would satisfy me that Ms Dillon retaining, in its entirety, her superannuation interest would be justly and appropriately offset against the superannuation entitlement which has been drawn down and expended by Mr Dillon.
In relation to the balance of the pool and dealing with the non-superannuation pool, I note that the effect of the orders that I would then make is that Mr Dillon would retain:
a)The funds received from the [E] property of $660,000;
b)The [N] painting, with a value of $34,000;
c)His motor vehicle, with a value of $27,000;
d)The remaining interest earned, less the tax liability, of $26,100; and,
e)The accumulated income, which I do not include for the purpose of these reasons as an asset but simply as a reflection of resource that was received from the defined benefit pension during the period when the entirety of it was retained by him.
This would have the effect that Mr Dillon would retain assets with a total net value of $747,100 or not less than that amount.
I have referred, as above, to the fact that an adjustment of not less than five per cent (5%) would be made in Ms Dillon’s favour, having regard to s.75(2) factors. However, I am also satisfied that indeed the adjustment that is urged upon me of ten per cent (10%) would be appropriate.
Whilst I have indicated that I propose to temper the overall adjustment, particularly in relation to superannuation, by the fact that it will be divided equally between these parties, both as to its asset value and its ongoing cash payment value to each party, the additional adjustment would be warranted, particularly having regard to the premature distributions that have occurred and the fact that Mr Dillon has had available to him and has had the sole benefit, through his unilateral action, of significant funds of money to do with as he wishes.
On that basis, and if a ten per cent (10%) adjustment were to be made, I note that the assets that are to be retained by Mr Dillon and Ms Dillon respectively fall well within the range of outcomes described above.
Ms Dillon is to retain:
a)The property at [W], with a value of $875,000;
b)Her motor vehicle, with a value of $3,000; and,
c)Furniture with a value of $10,000.
This will give Ms Dillon total net non-superannuation assets of $888,000. That has the net effect that Ms Dillon will retain from non-superannuation, or tangible, assets about fifty-four per cent (54%) of the asset pool. That is within or in fact slightly below the range of outcomes that I have described.
In relation to superannuation, I am satisfied that there should be an equality of division. Both of these parties have contributed towards the accumulation of that fund: Mr Dillon directly, through earning wages, and Ms Dillon indirectly, through her subverting her participation in paid employment and the accumulation of similar and corresponding employment entitlements to the benefit of not only the children but
Mr Dillon.
On that basis, I am satisfied equality of division is appropriate. I am also satisfied that a division of that fund so as to produce an equality of income, or potential income, is appropriate.
It is to be noted from the expert evidence that a commutation or a cash payment out in lump sum to Ms Dillon would follow an order for division of that fund, whereas Mr Dillon must continue to receive a superannuation pension and has no ultimate entitlement to commute. However, that is not a matter within Ms Dillon’s control and indeed there may be, and the consequences are unknown, detrimental consequences to her from either taxation and/or reduced Centrelink entitlements.
It was put in submissions that Ms Dillon, if she were to receive a lump sum of $330,000 and to invest it in a term deposit with a rate of six and a half per cent (6.5%), would be able to generate income. Indeed, the income she would generate would be almost identical to the income that would be received by Mr Dillon from the remainder of the fund wherefrom he will receive a pension, which Mr S’s evidence suggests would be around $21,500 per annum. At six and a half percent (6.5%), Ms Dillon would receive an investment income upon which she would have to pay tax, of $21,450.
On that basis, I am entirely satisfied that this is the appropriate order to make. It would result not only in an equal division of an asset that the long marriage of these parties warrants, justifies and, in my mind, demands, but an equal division of income.
That has a benefit for these parties in their circumstances, where they are both accommodated, both able to support themselves and meet day-to-day living expenses, albeit that if that were their only income, their lifestyle will be frugal. It is regrettable that such frugality would befall these parties in their retirement when they have both worked so hard, and in the case of Ms Dillon has worked hard in somewhat onerous circumstances, particularly for the last few years of her marriage. However, the Court cannot conjure funds or assets to divide between parties, no matter how deserving they may be.
The benefit for these parties is that they will at least both have adequate and comfortable accommodation, which they are familiar with and which is unencumbered, as well as an income stream which will be generated from the asset that they have both contributed to for over 30 years.
For those reasons, I am satisfied that orders as sought by the Applicant wife and as amended in her case outline of submissions for an equal division on a fifty per cent (50%) of the defined benefit fund are appropriate.
There is no opposition to, and indeed in submissions it was suggested consent to, an order that the [N] painting be made available for collection by Mr Dillon and I propose to so order. As indicated, that will result in a division of the non-superannuation asset pool as to fifty-four per cent (54%) to Ms Dillon and as to forty-six per cent (46%) to Mr Dillon, that adjustment taking into account the inferior financial position by reference to s. 75(2) that Ms Dillon finds herself in.
Equality of division of superannuation will do the best I can to put these parties in a position of equality as regards each other.
I certify that the preceding one hundred and ninety-one (191) paragraphs are a true copy of the reasons for judgment of Harman FM
Date: 9 January 2012
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