DORSEY & MALLON
[2018] FCCA 52
•24 January 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DORSEY & MALLON | [2018] FCCA 52 |
| Catchwords: FAMILY LAW – Property – where after relationship of 10 years (including marriage) the husband received a payout for total and permanent disability of $1,250,000 which made up bulk of matrimonial pool – Held wife to receive 35% matrimonial pool and husband to receive 65% of matrimonial pool. |
| Legislation: Family Law Act 1975, ss.75, 78, 79, pt.VIII |
| Cases cited: Stanford v Stanford (2012) 293 ALR 70 |
| Applicant: | MS DORSEY |
| Respondent: | MR MALLON |
| File Number: | BRC 5284 of 2014 |
| Judgment of: | Judge L. Turner |
| Hearing dates: | 24 October 2017 and 25 October 2017 |
| Date of Last Submission: | 5 December 2017 |
| Delivered at: | Brisbane |
| Delivered on: | 24 January 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Linklater-Steele |
| Solicitors for the Applicant: | Carroll Fairon Solicitors |
| Counsel for the Respondent: | Mr Hanlon |
| Solicitors for the Respondent: | Queensland Legal Practice |
FINAL PROPERTY ORDERS
That all previous property orders are hereby discharged.
That Orders (2) to (6) of these orders are binding on the trustees of the (omitted superannuation) superannuation fund (the fund).
That in accordance with Section 90MT(1) Family Law Act 1975, whenever a splittable payment becomes payable in respect to Mr Mallon’s (omitted superannuation) superannuation interest, Ms Dorsey is entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001, using a base amount of $387,357 and there is a corresponding reduction in the entitlement of Mr Mallon.
(a)The entitlement of the husband in the (omitted superannuation) superannuation fund is correspondingly reduced by force of this order.
That this order has effect from the operative time and the operative time is the beginning of the fourth day after this order is served on the trustee.
That within the time prescribed under the governing rules of the fund, the wife request the trustee of the fund to create a new interest, rollover or transfer the wife’s entitlement in accordance with the requirement of the trust deed.
That in accordance with the Family Law (Superannuation) Regulations 2001, any payments for the husband’s superannuation interest made after the trustee has acted under its governing rules to create a new interest in the wife’s name in the fund are not splittable payments.
That subject to Orders (2) to (6) herein the parties shall otherwise retain any superannuation funds held in their respective names.
That within fourteen (14) days of the date of these orders (the settlement date) the parties do all acts and sign all documents as are necessary to transfer to the husband at the husbands expense the wife’s right title and interest in Company A as Trustee for the Mallon Family Trust including all loan accounts and undistributed profits in Company A and Mallon Family Trust.
That the wife shall do all things and sign all documents necessary to:-
(a)Resign as a director and secretary of Company A.
(b)Resign as alternate Appointer of Mallon Family Trust.
(c)Transfer loan accounts in Mallon Family Trust to the husband.
(d)Transfer to the husband any debts owing to the parties either severally or jointly in Company A and/or Mallon Family Trust.
That upon the settlement date the husband shall do all acts and things and sign all documents as are necessary, at the sole expense of the husband, to release the wife from and indemnify the wife against any liability present or contingent including tax or bank liabilities in respect to Company A and/or Mallon Family Trust.
That the husband is solely responsible for the debt of $27,800 owing to the husband’s parents.
That the parties are solely responsible for any tax implication associated with the superannuation split or withdrawing funds from any superannuation policies.
That the husband shall within seven (7) days from the date of these orders return to the wife by delivering to her legal representatives any gold coins, gold notes, silver bullion bars, and jewellery (that was previously owned by the wife) which is in the husband’s possession in order for these items to be held in safe custody to be set up by the wife for the benefit of the child [X].
That within twenty-one (21) days of the wife providing to the husband a blank hard drive the husband shall provide the wife with a complete copy of all digital photographs and movies in the husband possession up until February 2013.
That upon the wife receiving the hard drive in accordance with Order (14) the wife shall within three (3) days return to the husband the laptop the wife has in her possession.
That the parties do all such acts and sign all such documents as are necessary to close any joint account held by the parties after dividing any proceeds of same equally between the parties.
That otherwise the parties retain for their sole use all other property in their possession including motor vehicles, bank accounts and household items.
That otherwise the parties are fully responsible to the exclusion of the other any debts in their respective names.
That the parties have liberty to apply in respect to anything regarding procedural fairness from (omitted superannuation).
That each party shall do all such things and sign all such papers and documents that are necessary to give effect to these Orders provided that in the event a party unreasonably fails or refuses to sign pursuant to these orders, then a Registrar of the Court pursuant to s.106 (A) Family Law Act 1975 is authorised to sign any such document on behalf of the defaulting party.
IT IS NOTED that publication of this judgment under the pseudonym Dorsey & Mallon is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 5284 of 2014
| MS DORSEY |
Applicant
And
| MR MALLON |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties are in dispute as to a matrimonial property division after a relationship of some ten years which included a marriage of over eight years.
Issue
The issue for determination is the division of the property pool.
Agreement
The parties have agreed to keep whatever cars and personal items are in their possession and retain whatever debts are in their name.
Proposals
The wife proposes that by way of property settlement:-
a)The wife receive:-
i)The wife’s superannuation entitlements of $191,907.90.
ii)A superannuation split of $600,000 from the husband’s (omitted superannuation).
b)The husband receive:-
i)The balance of his superannuation entitlement from (omitted superannuation).
The husband proposed that by way of property settlement:-
a)The wife receive:-
i)The wife’s superannuation entitlements of $191,907.90.
ii)A superannuation split of $111,000 from the husband’s (omitted superannuation).
b)The husband receive:-
i)The balance of his superannuation entitlement from (omitted superannuation).
Evidence
In consideration of this issue regard has been had to:-
a)The material as marked on the court file.
b)Previous orders and judgments.
c)Transcripts.
d)The oral evidence of the parties.
e)The exhibits.
f)The written submissions of the parties.
g)Part VIII Family Law Act 1975.
h)Relevant authorities.
The parties are legally represented.
On the first day of the final hearing a large proportion of the husband’s affidavit was struck out due to irrelevance; much of which dealt with the parenting issues which had already been resolved by way of final court orders made in 2016.
For the wife the following witnesses were called and cross-examined:-
a)The wife.
I find the wife to be a credible witness.
The husband did not require Ms J (forensic accountant for the wife) for cross-examination.
For the husband the following witnesses were called and cross-examined:-
a)The husband.
I find the husband to be a credible witness.
Findings of fact are made on the balance of probabilities having regard to the evidence and in what follows statements of fact constitute findings of fact.
Relevant history
In order to consider the issue regard must be had to the relevant history:-
a)The wife is aged 34 and works four days a week as a (occupation and employer omitted).
b)The husband is aged 40 and is currently not employed.
c)In 2002 the husband commenced employment as a (occupation omitted) with the (employer omitted) and was in receipt of (omitted superannuation) which had attached to its policy two standard insurance units for Death and Disability.
d)In 2002 the parties commenced dating.
e)In February 2003 two further standard insurance units for Death and Disability were attached to the husband’s (omitted superannuation) policy.
f)In 2003 the parties commenced cohabitation in (location omitted).
g)In 2005 the parties married.
h)In 2010 the daughter [X] was born.
i)In 2011 the husband acquired a further six voluntary units of insurance on the (omitted superannuation) policy for Death and Disability and premiums were paid out of the superannuation accumulated in the (omitted superannuation) fund.
j)In February 2013 the parties separated and [X] remained living with the wife.
k)As at the date of separation the parties jointly owned the following real properties which were subject to mortgages:-
i)Property A (the Property A property).
ii)Property B (the Property B property).
iii)Property C (the Property C property).
l)At the date of separation the parties had credit card debts, as well as share loan and personal loan debts.
m)After separation in or around mid-2013 the husband experienced the first (where a (omitted)) of a series of incidents in his employment which subsequently attributed to the husband’s claim on (omitted superannuation) for Total Permanent Disability (TPD) due to Post Traumatic Stress Disorder (PTSD).
n)As a consequence of the incident in mid-2013 the husband took several months off work, returning to work in early 2014.
o)In 2013 the husband started seeing Dr O (psychiatrist).
p)In mid-2013 the husband re-partnered with Ms M (Ms M) which was on again off again until 2015 when the relationship ended.
q)In September 2014 the parties divorced.
r)In or around 2015 [C] was born to the husband and Ms M although the husband disputes paternity.
s)In April 2015 the husband re-partnered with Ms A (Ms A).
t)In April 2015 the parties attended a conciliation conference which was unsuccessful.
u)In May 2015 the Property A property sold with a shortfall.
v)In July 2015 the husband physically left (employer omitted), although still in receipt of an income.
w)In July 2015 the Property B property sold leaving no funds available for distribution.
x)In July 2015 the Property C property sold leaving no funds available for distribution.
y)In September 2015 the husband’s time with [X] ceased.
z)In or around 2015 the husband was diagnosed with PTSD and was prescribed medication.
aa)In December 2015 the husband applied for TPD benefits from (omitted superannuation) due to PTSD.
bb)In 2015 Ms A became the husband’s carer.
cc)In January 2016 the husband received a letter from his employer advising that he would be medically discharged from April 2016.
dd)In February 2016 the request of the husband to have his date for medical discharge be brought forward was approved and the husband medically resigned from (employer omitted) in February 2016.
ee)In February 2016 the husband was in receipt of a WorkCover benefit.
ff)In March 2016 the husband received a payout from (employer omitted) of some $38,000.
gg)In April 2016 at the allocated final hearing the parties entered into final parenting orders by consent for [X] which provided that the child live with the wife, the wife have sole parental responsibility for the child and the husband not spend time with the child unless otherwise agreed.
hh)In April 2016 the property matter could not proceed due to the husband having retired from employment and not providing the wife with full details surrounding the retirement. The matter was set down for final hearing in August 2016.
ii)In June 2016 [D] was born to the husband and Ms A.
jj)In August 2016 the final hearing could not proceed as the husband’s claim for TPD had not been finalised with (omitted superannuation) and the husband failed to attend court.
kk)In August 2016 the court ordered various injunctions to protect the asset pool.
ll)In September 2016 (omitted superannuation) approved the husband’s claim.
mm)In September 2016 the husband received a payment to his superannuation entitlement of $500,000 due to the disability policy component for Death and Disability attached to the four standard insurance units in the husband’s (omitted superannuation) policy. These funds are held in an accumulation fund together with the husband’s accumulated superannuation from his employment with the majority of the monies designated as non-preserved unrestricted funds.
nn)In October 2016 the husband and Ms A separated.
oo)In October 2016 the husband declared bankruptcy without notification to his lawyers or the wife.
pp)In December 2016 the husband was unsuccessful in his application for the appointment of a litigation guardian.
qq)In June 2017 WorkCover benefit payments ceased and the husband commenced receiving government payments.
rr)In September 2017 the husband received a further payment of $750,000 due to the disability policy component for Death and Disability attached to the six voluntary units of insurance taken out by the husband in respect to the husband’s (omitted superannuation) policy. These funds are held in a separate accumulation fund to the husband’s (omitted superannuation) fund for his employment and are designated as non-preserved unrestricted funds.
ss)In the letter to the husband advising of the payment dated 4 September 2017 Mr G from (omitted superannuation) writes “after consideration of the available medical evidence it has been determined by the Board’s Delegate that you are suffering from a condition which renders you totally and permanently disabled for the release of your additional insurance. Your benefit became effective 19 February 2016” (Exhibit “A”).
tt)In December 2017 the matter proceeded to a final hearing.
As at the date of the final hearing:-
a)The wife and [X] are living with the wife’s parents.
b)The wife has the sole care of [X].
c)The wife is in a relationship with Mr T (Mr T).
d)The wife is working fulltime in (employer omitted).
e)The wife is financially responsible for [X] and receives $24 per week from the husband.
f)The husband is living with his parents.
g)Ms A and [D] live in rental premises with the rent being paid by the husband’s parents.
h)[D] has health issues which require medication.
i)The husband does not spend time with [X].
j)The husband spends time with [D].
k)The husband is on Newstart allowance and has applied for a disability support pension.
l)The husband takes medication for his medical issues.
m)The husband may have a claim for income protection up to $3,060 per month due to an (insurance policy omitted) in the husband’s name with (insurer omitted).
The law
In determining property matters consideration must be had to Part VIII Family Law Act 1975 and in particular sections 75, 78 and 79.
A clear framework exists in determining a property division.
The first question that must be asked as articulated by the High Court in Stanford v Stanford (2012) 293 ALR 70 at [79] and [80] is whether “it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”
If answered in the affirmative, then the matter can proceed to a property division, applying the various principals.
Consideration must also be given as to whether a global or asset by asset approach is to be adopted and whether a one or more pool approach is to be taken.
Then the four step process is to be applied in accordance with the Full Court decision of Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 at [39] which can be summarised as follows:
a)Identify and value, as at the date of hearing, the parties’ property, liabilities and financial resources;
b)Identify and assess the parties contributions pursuant to s.79;
c)Identify and assess the parties ongoing needs taking into account the relevant factors relevant under s.79 and s75(2); and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
The question to be considered as set out in Stanford
I find that this is a matter where it is just and equitable to determine a property division based on the following:-
a)The parties were in a long term relationship of ten years.
b)The parties are now divorced.
c)There is a property pool capable of division.
d)The parties agree that a property division is required to enable the parties to sever their financial commitments.
As the question posed by Stanford v Stanford is in the affirmative, I will now determine how to proceed with the property division.
Global or asset by asset approach?
The husband submits that the court could approach the property pool on either a global basis or an asset by asset approach as the outcome would be similar ([87] to [89] husband’s written submissions).
The wife submits that “in this matter the global assessment of contributions is more likely to achieve a just and equitable outcome” ([16] wife’s written submissions).
Conclusion on global or asset by asset approach
As noted in Tuck and Tuck (1981) FLC 91-021 a global approach involves the division of the parties’ assets on an overall proportion of the global view of the assets whereas an asset by asset approach as discussed in McMahon and McMahon (1995) FLC 92-606 involves the determination of the parties’ interests in individual items of property.
In Norbis v Norbis (1986) 161 CLR 513 the High Court at 75,168 noted that -
“Although it is natural to assess financial contributions under s79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as home maker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contribution on the same basis, i.e. on a global or, alternatively on an ‘asset-by-asset’ basis. Which of the two approaches is more convenient will depend on the circumstances of the particular case. However there is much to be said for the view that in most cases the global approach is more convenient”.
In the marriage of Zyk and Zyk (1995) FLC92-644 the Full Court at 82,510 explained the two approaches and when it is appropriate to use each approach:-
“The global approach allows the Court to assess the contributions aspect of s.79 exercise in an overall way by considering the parties’ contributions to their property as a whole although factoring into that exercise the circumstance, if it be so, that they have made varying contributions to the total property at trial or which formed part of the history of their property during the marriage. It is generally preferred and the generally adopted approach. It enables a broad approach to be taken to the varying contributions of the parties over the years of marriage and in particular it usually has the advantage of more easily dealing with and giving proper recognition to paras(b) and (c) contributions. However where the contributions to the components of the total property are disparate, caution needs to be exercised in this approach and the overall conclusion tested against the requirement that the orders be just and equitable”.
I find that it is appropriate in this matter to adopt a global approach in determining the property division.
I make this finding based on the following:-
a)The parties were together for ten years and during that time their finances were merged and decisions were made as a family unit.
b)The payment of the TPD post separation was only possible due to the (omitted superannuation) policy held by the husband during the relationship and by the husband acquiring further insurance units during the relationship.
c)There is no evidence that the “contributions to the components are disparate” as each party through their financial and non-financial contributions both directly and indirectly allowed the parties to work and accumulate superannuation and the benefits associated with the superannuation.
d)A global approach is a more convenient and practical way to approach this matter.
Two pools or one?
The property as at the date of separation consisted of a non-superannuation pool and a superannuation pool.
Non-superannuation pool
According to the wife the non-superannuation pool, taking into account the assets and liabilities (excluding the loan to the husband’s parents), had little net worth as at the date of separation with there being just over $50,000 available based on her calculations ([40] of the wife’s trial affidavit).
The wife is highly critical of how the husband disposed of the heavily mortgaged real properties at Property A, Property C and Property B post separation and how the husband drew down monies from the loan accounts.
I find, however, that the evidence falls short of successfully arguing a wastage argument by the husband of the non-superannuation pool.
After the sale of the real properties the non-superannuation pool was in the negative of over minus $54,000 ([55] wife’s trial affidavit).
The husband subsequently declared bankruptcy and included in his own debtors petition (Exhibit “G”) are reference to some of the matrimonial credit card debts.
At the time of the final hearing the non-superannuation pool consisted of motor vehicles, household items and coins, bullion, notes and jewellery which the parties want [X] to have in safe custody.
Agreement, in essence, was reached to the parties retaining the motor vehicles and household items in their possession and any associated debt and for the husband to return to the wife any items that should be in the child’s safe custody.
The non-superannuation pool (apart from the debt to the husband’s parents) has, therefore, been disposed of and/or distributed and I find does not feature in the issue for determination before the court.
Superannuation pool
The superannuation pool falls within two time periods:-
a)That which existed at the time of separation; and
b)That which was acquired post separation.
As at the date of separation the superannuation pool was worth $270,201 that consisting of the following:-
Superannuation
$Value
(omitted superannuation) (husband)
151,223
(omitted superannuation) (wife)
118,987
Total Superannuation at separation
$270,210
As at the date of the final hearing the superannuation pool was worth $1,682,840 that being made up of the following:-
Superannuation
$Value
(omitted superannuation) (husband)
240,933
(omitted superannuation) first TPD payment paid in 2016 (husband)
500,000
(omitted superannuation) second TPD payment paid in 2017 (husband)
750,000
(omitted superannuation) wife
191,907
Total Superannuation at final hearing
$1,682,840
Conclusion on one pool or two pool
I find that as the only asset available for distribution is superannuation then a one pool approach must be adopted.
Are the monies owing to the husband’s parents to be included in that pool?
During the course of the relationship the husband’s parents provided funds to the parties and payments to reimburse the husband’s parents for these funds came out of the joint account held by the parties.
The wife, in an email sent post separation to the husband on 22 February 2014, wrote:-
“I just want to talk to you about the money that is owed to your parents. I believe they should be paid in full for all the money that was loaned whilst we were together and I will continue to be responsible for my half of this…….there should be $27,800 still remaining to be paid back which equated to $13,900 each. I am committed to paying back my half in full to your parents and I will pay this directly to them….Please do not take any more money out of the joint account to give to your parents as I do not authorise this. I will continue to be responsible for my half of the money owed and I will ensure this is given to your parents which is $13,900” (Exhibit “H”).
Within the email the wife provided details as to the amounts originally borrowed and the repayments made to the husband’s parents from the parties’ joint account since 2013.
As at the date of the final hearing the wife has not made any payments to the husband’s parents.
The husband maintains that the sum of $27,500 is still owing to the husband’s parents and needs to be included in the matrimonial pool.
This debt was not included in the husband’s petition for bankruptcy.
The wife, in her affidavit, discussed the monies owing to the husband’s parents in her trial affidavit ([275] to [297]) stating that “I agreed to make contributions to pay both amounts back to Mr Mallon’s parents over time. Although I didn’t agree to repaying the money back in principle I made a decision to agree to this in the hope that if an agreement was reached early regarding our finances, Mr Mallon’s anger and aggressive and threatening behaviour towards me would subside….Mr Mallon would always give me an ultimatum about these arrangements and I felt I had no option but to sign the schedule and return it so we could move forward” ([277] wife’s trial affidavit)
The wife makes no mention of her February 2014 email in her trial affidavit.
In written submissions it is suggested that “the wife’s response (referring to the email) does not amount to any binding admission. The statements made in the email were at a time (as the wife reiterated in cross-examination) when she was making efforts to try and placate the husband and move the matter towards resolution” ([34] wife’s written submissions).
The wife is critical of the husband not providing independent evidence from his parents of the alleged loans and of the husband not including the debt in his debtor’s petition.
Conclusion on monies owing to the parents
I find, having considered the available evidence and on the balance of probabilities, that the monies are owing to the parents by the parties.
I make this finding based on the following:-
a)The evidence supports that the husband’s parents financially assisted the parties in their financial ventures during the marriage.
b)The evidence supports that monies were repaid by the parties from their joint bank account to the parents.
c)The wife is a well-educated woman who understands financial matters.
d)I do not accept the wife’s version of events as to what gave rise to her email to the husband in February 2014 and on its face the email was one prompted by the wife to the husband about their joint indebtedness to the husband’s parents.
e)I find that the email is a voluntary, deliberate and well informed admission by the wife of the debt to the husband’s parents, a calculation of that debt and the amount of the debt for which the wife is responsible.
I, therefore, find that the debt forms part of the matrimonial pool.
Four step approach
Matrimonial property pool available for distribution
I find that the matrimonial property pool available for distribution totals $1,655,040 consisting of the following:-
Superannuation assets
$ Value
(omitted superannuation) (husband)
240,933
(omitted superannuation) first TPD payment paid in 2016 (husband)
500,000
(omitted superannuation) second TPD payment paid in 2017 (husband)
750,000
(omitted superannuation) wife
191,907
Total superannuation pool
$1,682,840
Less liabilities
Monies owing to husband’s parents
27,800
Total liabilities
$27,800
Total matrimonial property pool
$1,655,040
Contributions
Initial contributions
The wife states that her initial contributions totalled some $11,000.
The husband states that his initial contributions totalled some $60,000.
The husband maintains that given the length of the marriage and the extent of the contributions that an adjustment should not be made in favour of either party for initial contributions.
I agree and find that the evidence does not support for any adjustment to be made for initial contributions.
Contributions during the marriage
The husband maintains that the contributions made by the parties during the marriage were equal.
Despite lengthy written submissions by the wife it is unclear as to what her position is in respect to contributions during the marriage.
I find having considered all the evidence that the contributions of the parties during the relationship were equal and, therefore, the evidence does not support for any adjustment to be made for contributions during the marriage.
Post separation contributions
It was after separation that the husband received two payouts for his PTSD for TPD from (omitted superannuation) totalling $1,250,000 which makes up the bulk of the matrimonial pool.
The husband submits that the payment of $1,250,000 should “be viewed and submitted by the Court in the same light as a damages verdict arising from a personal injury claim” referring to Williams v Williams (1985) 10 Fam LR 355 and In the Marriage of Holmes (1988) 12 Fam LR 331 to support the proposition that an award for damages to a party to a marriage constitutes property of that party for the purposes of section 79. ([80] and [83] husband’s written submissions).
The wife submits that the court “can deal with the superannuation interests of the husband as ‘property’” ([63] wife’s written submissions).
I agree and find that the payouts which now form part of the superannuation pool are property for the purposes of section 79 Family Law Act 1975.
The wife submits in essence that it is irrelevant as to when the property came into existence relying on Farmer v Bromley (2000) FLC 93-060 at [57] where Finn J states that “as the Act currently stands, the jurisdiction as conferred by section 79(1) to alter the interest of spouses to property extends without limitation to all the property which either party is entitled to whether in position or revision (section 4)” ([71] wife’s written submissions).
In further support of her argument the wife refers to Bonnici v Bonnici (1991) FLC 92-272 where the Full Court, when dealing with an inheritance received well after separation, stated that the “property does not fall into a protected category” and that “in the present case there had been no other assets than the husband’s inheritance, that the wife had…..clearly carried the main financial burden and the support of the family and had also played a more substantial role as a homemaker and parent than the husband, then it would clearly be open and indeed encumbered upon the Court to make a property settlement in her favour from the inheritance”.
I agree.
The husband submits that the payouts are a “contribution” by the husband as “the party who suffered the injury” ([83] husband’s written submissions).
This proposition is based on the findings of the Full Court in Aleksovski v Aleksovski (1996) FLC92-705 where the personal injuries damage award was treated as contributions by the wife with the court stating at 83,437 that “in our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received is a contribution by the person who suffered the injury”
Whilst a payout from a superannuation policy is not exactly the same as a personal injuries damage award, I agree that the nature of the payment is such that it is to be treated as a contribution of the husband.
The issue though is how that contribution of the husband is to be considered given the contributions by the wife.
In Aleksovski at 83,437 it is stated that such a contribution “should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time”.
The wife submits that the “court would take the view that the wife has made a contributions to the assets of the parties both present and past and the court having made assessment of the contributions pursuant to s.79(4)(a)(b) and (c) can nonetheless consider whether an adjustment of the husband’s interest is required on account of other factors in s.79(4) notably the s.75(2) factors and would therefore make orders against the husband’s superannuation entitlements” ([87] husband’s written submissions).
In the unreported Full Court decision of K & K [2004] FamCA 360 Finn J, when dealing with an appeal where the husband brought in a substantial common law damages award post separation, commented at [3] that the first instance judge had “divided the property between the parties based on their respective contributions only” and “made no adjustment to the contributions based division on account of any other matter contained in s.79(4) of the Family Law Act 1975”.
Finn J noted at [4] that “after a detailed analysis of Coleman’s J reasons for judgment, Holden and Warnick JJ have concluded that his Honour appears to have regarded certain proportions of the husband’s damages award as ‘being a contribution exclusively by the husband and against which the wife’s contributions were not measured with the result that the wife’s contributions were not measured with the result that the wife’s contributions were have been devalued’”.
Finn J concluded at [6] that “ultimately their Honours have concluded that Coleman J erred in ‘failing to assess the wife’s contribution to the whole of the husband’s damage award’ and in assessing the wife’s contribution ‘on the basis of relating it to what the position might have been had her claim been determined’ prior to the husband receiving his damages award, and that these errors have resulted in the wife’s contributions being ‘seriously devalued’ thus producing a result ‘manifestly unjust’ to the wife”.
Whilst not specifically on point in respect to the TPD payouts I find that K & K [2004] FamCA 360 provides guidance in this matter because events leading up to and subsequent to the TPD payments must be looked at closely when ascertaining the contributions of the husband and in being cautious in not devaluing the contributions of the wife.
In considering the evidence I make the following findings that are relevant to the contributions.
Firstly, I find that although the claim for TPD for PTSD did not occur until post separation the evidence supports that the incidents leading up to the husband’s diagnosis of PTSD dated back long before the husband first reacted in 2103 when the “index episode” of the (omitted) occurred resulting in these previous incidents taking place during the relationship.
This is supported by the following evidence:-
a)The husband, in the document that supported his original claim for TPD from (omitted superannuation) (part of which makes up Exhibit “E”), sets out in graphic detail the many traumatic events the husband endured since his commencement with (employer omitted) in 2002 and his reactions and distain to what had happened and what was expected of the husband as a (occupation omitted).
b)Dr O (psychiatrist) noted in a letter addressed to (employer omitted) dated 18 August 2015 that the husband “is now preoccupied by many different traumatic events rather than merely the index episode…he is now citing traumatic events that occurred prior to this event”.
c)The WorkCover subpoena indicated that the husband had made WorkCover claims in 2003, 2004, 2005, 2011, 2012 and 2013 ([97] husband’s written submissions).
Secondly, I find that the husband was exhibiting questionable behaviours prior to his formal diagnosis of PTSD in 2015 which may have been an early indication of his mental health issues and that this resulted in the husband being behaviourally unstable leading up to and around separation with his behaviours impacting on the wife and making her contributions more difficult.
I make this finding based on the following:-
a)The wife speaks of the relationship having “hit bottom between September 2012 and December 2012” where the husband and the wife “were continually arguing and it was very clear that we were both unhappy in our relationship” ([11] wife’s trial affidavit).
b)During this time the wife describes the verbal abuse and inappropriate behaviours of the husband who had become agitated about the wife “hiding things from him” and wanting to access her emails ([12] to [16] wife’s trial affidavit).
c)By February 2013 the relationship was over.
d)The arguing and accusations continued and the wife speaks of the husband losing “his temper very quickly” where the husband “would become red in the face, breathe heavily, pace throughout the house and would raise his voice, use profanities and make horrible threats during arguments about how he could ruin my life” ([22] wife’s trial affidavit).
e)Communication between the parties became difficult with the wife noting that “communication between Mr Mallon and myself descended into abusive, threatening, lecturing, dismissive and dominating behaviour from Mr Mallon to myself….I felt physically ill anytime my phone would ring or would make a noise to indicate that I had received a text message” ([28] wife’s trial affidavit).
f)The wife explains how the “stress of dealing with Mr Mallon every single day had completely taken its toll on me and it was clear I was not functioning. I attended upon a doctor seeking help for my wellbeing and was prescribed anti-depressant medication. I also attended 10 sessions with my counsellor to develop tools and techniques in order to deal with” the husband ([28] and [29] wife’s trial affidavit).
Thirdly, I find that the husband’s behavioural issues escalated post separation resulting in numerous threats and actions being taken against the wife such as threatening:-
a)To obtain access to the wife’s work emails and try and use the emails to get the wife fired ([131(a) and (b)] wife’s trial affidavit).
b)To claim spousal maintenance from the wife ([131(c)] wife’s trial affidavit).
c)Take all of the wife’s superannuation payments ([131(d)] wife’s trial affidavit).
d)Bankrupt the wife ([131(e)] wife’s trial affidavit).
e)Lodge a caveat over the wife’s parent’s home ([131(e)] wife’s trial affidavit).
f)And making complaints about the wife committing fraud ([131(e)] wife’s trial affidavit).
g)And making an unfounded complaint to police about the wife’s abuse of [X] ([340] wife’s affidavit).
Fourthly, I find that the husband’s behavioural issues have resulted in the legal proceedings being protracted, time consuming and painful for the wife and, therefore, making her contributions in caring for [X], putting things in place for the property division and meeting her work commitments all that much harder.
I make this finding due to the husband’s conduct during the course of the property proceedings including (but not limited to):-
a)The wife finding out information from subpoenaed documents rather than being informed by the husband.
b)Not informing the wife in a timely manner as to his medical discharge from (employer omitted) or full details as to his claim for TPD.
c)Not providing the wife in a timely manner with the documentation regarding the TPD claim.
d)Not informing the wife in a timely manner as to his bankruptcy.
e)Not including in the financial statement prepared for the final hearing the $750,000 payout received from (omitted superannuation).
f)Not providing sufficient evidence as to his medical condition.
g)Repeatedly not complying with requests for disclosure.
h)Misrepresenting the TPD superannuation funds as being an allocated pension.
i)Objecting to subpoenas issued to (employer omitted), WorkCover and (omitted superannuation).
Lastly, the husband decided for reasons (one of which was due to his PTSD) to cease all time and communication with [X], leaving the care of the child solely to the wife resulting in the no contact orders.
In April 2016 the husband made a decision not to spend time with [X] setting out the details at [69] to [71] of the husband’s trial affidavit.
The husband states that “as a result I decided to put more concentration and effort on helping myself and trying to get rid of my PTSD and depression” ([72] husband’s trial affidavit).
In cross-examination during court proceedings in April 2016 the husband explained “I’m not going to pursue the issues with the child any more. I won’t seek access to the child until I receive further information from my psychiatrist in relation to my illness” and that the husband wanted “no further involvement with the child”.
I find given the above that it is necessary for an adjustment to be made in favour of the husband for the post separation contribution of the TPD payments but that this adjustment must be measured against the many contributions of the wife leading up and since separation.
The husband incorrectly, at [87] of the husband’s written submissions, calculates the percentage adjustment based on a mathematical calculation of the amount of the TPD payments as compared to the total value of the matrimonial pool.
I find that the TPD payments as property brought post separation into the marriage equates to a 35% adjustment in favour of the husband.
However, when measured against the contributions of the wife, which I assess at 7.5%, the appropriate adjustment to the husband is 27.5%, therefore, resulting in the husband receiving 72.5% of the matrimonial asset pool and the wife receiving 27.5% of the matrimonial asset pool at the conclusion of this step.
Future needs
The wife argues an adjustment for future need should be provided to her based on:-
a)Her ongoing and sole physical, emotional and financial support for [X] who is aged 7 where the wife is currently in receipt of minimal child support as per the assessment.
b)The wife struggles weekly to financially survive and her standard of living has dropped significantly since separation.
c)The wife wants to continue to work four days a week so as to provide the role of parent to [X].
I find that an adjustment is to be made in favour of the wife for future needs.
However, before assessing the extent of that adjustment it is necessary to determine the husband’s future needs.
The husband is older than the wife and currently on government benefits.
The husband may be entitled to income protection with (insurer omitted) but I accept that this is an unknown as the husband has received substantial payouts for TPD from (omitted superannuation).
It is also unknown as to whether the husband is able to work.
Dr O in correspondence to (employer omitted) dated 18 August 2015 wrote “currently my impression is that Mr Mallon is incapable of returning to work in any capacity. It is not possible for me to predict the duration of this capacity but note that it several months before Mr Mallon was able to return to work previously”.
The wife argues that the husband’s state of health should not be a factor in future needs.
I disagree.
I accept that evidence is lacking and that the husband has acted in a peculiar manner throughout the proceedings.
But what cannot be argued is that the husband has been diagnosed with PTSD and that the diagnosis was such that a superannuation fund has accepted his claim for TPD, subsequently making a payment of $1,250.000.
TPD is defined in the “Decision and statement of reasons” provided by the Delegate at (omitted superannuation) dated August 2016 as “disablement of a degree which, in the opinion of the Board after obtaining the advice of not fewer than 2 medical practitioners, is such as to render the member unlikely ever to work again in a job for which the member is reasonably qualified by education, training or experience” (Exhibit “B”).
The husband was assessed by (omitted superannuation) as having a TPD entitlement due to “PTSD, Anxiety Disorder and Panic Disorder” and that TPD existed at the time of the termination of his employment in February 2016 (Exhibit “B”) .
In making this determination the Delegate had access to five medical reports; four from Dr O (psychiatrist) and one from Dr E (consultant psychiatrist).
In addition to the husband’s health issues the husband has a young child, [D].
I find, therefore, measuring the future needs of the husband to that of the wife that the wife is to receive an adjustment in her favour of 7.5% for future needs.
This results in the husband receiving 65% of the matrimonial asset pool and the wife receiving 35% of the matrimonial asset pool at the conclusion of this step.
Just and equitable
The wife in receiving 35% of the matrimonial pool will receive assets totalling $579,264 ($1,655,040 x 35% = $579,264) that being made up as follows:-
Superannuation split to wife
$387,357
(omitted superannuation) wife
$191,907
Wife’s share of matrimonial pool
$579,264
The husband in receiving 65% of the matrimonial pool will receive assets totalling $1,075,776 ($1,655,040 x 65% = $1,075,776) that being made up as follows:-
Superannuation assets
$ Value
(omitted superannuation) (husband)
240,933
(omitted superannuation) first TPD payment paid in 2016 (husband)
500,000
(omitted superannuation) second TPD payment paid in 2017 (husband)
750,000
Total superannuation pool
$1,490,933
Less liabilities
Monies owing to husband’s parents
27,800
Less superannuation split to wife
$387,357
Total liabilities
$415,157
Husband’s share of matrimonial pool
$1,075,776
I accept that both parties have tax liabilities in the event that they choose to withdraw from the superannuation funds.
I find that the property division is just and equitable in respect to the wife as:-
a)The wife is young (34) and in good health.
b)The wife is in permanent secure employment earning a good income.
c)The property division will provide the wife with choices including acquiring a property.
d)The wife has many working years ahead of her as well as the ability to accumulate superannuation and property.
I find that the property division is just and equitable in respect to the husband as:-
a)The husband is forty years old and is no longer able to work in his trained employment as a (occupation omitted).
b)The husband has ongoing serious health issues with PTSD which impact on his functioning.
c)The husband has a young child to care for who has medical needs.
d)The husband has limited ability to accumulate superannuation and property into the future.
e)The husband will have sufficient funds to acquire property and pay off the debt to his parents and monies to supplement his living expenses.
I, therefore, find that a 35% adjustment in favour of the wife and a 65% adjustment in favour of the husband is just and equitable and the appropriate property division in this matter.
I certify that the preceding one hundred and twenty one (121) paragraphs are a true copy of the reasons for judgment of Judge L. Turner
Date: 24 January 2018
Key Legal Topics
Areas of Law
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Civil Procedure
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Administrative Law
Legal Concepts
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Judicial Review
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Procedural Fairness
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Standing
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Natural Justice
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Jurisdiction
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