Dyson and Eggers
[2019] FamCA 511
•1 August 2019
FAMILY COURT OF AUSTRALIA
| DYSON & EGGERS | [2019] FamCA 511 |
| FAMILY LAW – PROPERTY – Property Adjustment – Where discussion of applicable principles – Where husband received significant funds resulting from a claim under the Motor Accidents Compensation Act 1999 (NSW) – Where husband also received a lump sum payment under the State Authorities Superannuation Scheme being a “total and permanent invalidity benefit” – Where the husband alleges gambling addiction – Where the husband unable to account for most of the funds allegedly expended – Where the husband’s evidence does not satisfy the onus on him – Where the wife has sole care of the child – Where orders made for the wife to retain her present assets, have the home transferred to her subject to the mortgage, and have the husband pay to her a sum by way of adjustment. |
| Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) ss 75, 79 |
| Bevan & Bevan [2014] FamCAFC 19 Teal & Teal [2010] FamCAFC 120 |
| APPLICANT: | Ms Dyson |
| RESPONDENT: | Mr Eggers |
| FILE NUMBER: | PAC | 5495 | of | 2014 |
| DATE DELIVERED: | 1 August 2019 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 4 March 2019, 22 May 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Givney |
| SOLICITOR FOR THE APPLICANT: | Maclarens Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Breeze |
| SOLICITOR FOR THE RESPONDENT: | Family Lawyers & Mediators Australia |
Orders
That within three months from this date the husband do all things necessary to deliver up to the wife a duly executed Memorandum of Transfer to the wife of his interest in the real estate property at H Street, Town D.
That the wife hereinafter indemnify the husband in respect of all mortgage instalments as and when they fall due with respect to the first mortgage secured upon the Town D property.
That the wife within three years of the date of these Orders do all things necessary to procure a discharge of the present mortgage encumbrance secured on the said property so as to release the husband from any liability in regard thereto and concurrently with such discharge register the memorandum of transfer.
That the husband sign all such documents and do all things necessary as requested of him to assist the wife in complying with the previous order including but not limited to signing a mortgage discharge request.
That the husband pay to the wife the sum of $84,800 within two months from this date.
That in default of the husband complying with the above orders, the Registrar of the Family Court of Australia at Parramatta be appointed to execute such deeds, documents or instruments in the name of the husband Mr Eggers so as to give effect to the orders with such documents or instruments to include, but be not limited to:
(a)Memorandum of transfer of the husband’s interest in the subject property at H Street, Town D to the wife; and
(b)All other necessary documents authorising the present mortgagee to discharge the present mortgage secured on the subject property at H Street, Town D.
Liberty to apply as to implementation or enforcement of these orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dyson & Eggers has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC5495/2014
| Ms Dyson |
Applicant
And
| Mr Eggers |
Respondent
REASONS FOR JUDGMENT
The matter for determination is the question of property settlement as between the applicant wife and the respondent husband.
On 23 July 2015 final parenting orders were made by this Court providing that the only child of the marriage B was to live with the wife and for the wife to have sole parental responsibility for the child. No order was made in relation to the child’s time with the husband as the husband had withdrawn from the proceedings despite originally initiating such proceedings as to parenting.
Property proceedings were subsequently commenced by the applicant wife in her Initiating Application filed 11 January 2017 as amended by her further Amended Initiating Application filed 28 February 2019.
In her Amended Initiating Application, the wife sought orders, in summary:
a)That the husband transfer to the wife his interest in the real estate property at H Street, Town D (“the Town D Property”);
b)That the wife indemnify the husband in respect of all mortgage instalments as and when they fall due with respect to the first mortgage secured upon the Town D property;
c)That the wife within three years of the date of these Orders cause the discharge of the mortgage and register the transfer;
d)That in the event the wife fails to discharge the mortgage the wife shall do all things necessary to sell the property within six months from the date of default with the proceeds to be paid to the wife;
e)That the husband pay to the wife $500,000 by way of property settlement; and
f)That in the alternative to an order requiring the wife to sell the property the husband shall pay the wife the sum of $500,000 by way of lump sum spousal maintenance.
The husband in his Amended Response to the wife’s Initiating Application filed 27 June 2018 sought, in summary:
a)That within 90 days of the date of these orders the wife pay the husband the sum of $171,500;
b)That in the event the wife transfers the husband the sum of $171,500, the husband and wife do all things necessary to transfer to the wife at her expense the husband’s interest in the Town D property;
c)That in the event the wife does not pay the husband $171,500, that within 120 days of the orders or at such later time as the parties agree in writing, the husband and wife do all things necessary to cause the sale of the Town D property;
d)That the proceeds of sale of the Town D property to be paid to the husband 60 per cent of the remaining balance and to the wife 40 per cent of the remaining balance;
e)That until the sale of the Town D property the wife have sole occupancy of the Town D property and pay all outgoings with respect to the property;
f)That each party is solely entitled to the superannuation fund in their own names;
g)That the husband be solely entitled to his motor vehicle; bank accounts; any cash held by the husband; any life insurance and/or life assurance of the husband; all other property and chattels of whatsoever nature and kind in the possession of the husband at the date of making the orders;
h)That the wife be solely entitled to the exclusion of the husband her motor vehicle; the contents of the Town D property; the artworks known as the “M Artworks”; the wife’s bank accounts; any life insurance and/or life assurance of the wife; and all other property and chattels of whatsoever nature and kind in the possession of the wife as at the date of making the orders; and
i)That each party indemnify the other against all debts owing to the other.
At trial the wife relied upon:
a)Her further Amended Initiating Application filed 28 February 2019;
b)Her Affidavit filed 20 September 2018; and
c)Her Financial Statement filed 30 August 2018.
At trial the husband relied upon:
a)His Amended Response filed 27 June 2018;
b)His Affidavit filed 26 July 2018;
c)The Affidavit of Dr K filed 16 September 2018; and
d)His Financial Statement filed 26 June 2018.
The trial commenced on 4 March 2019, however, was adjourned part heard on this date part way through the husband’s evidence as it was determined that he may require a Case Guardian for the remainder of the trial. The trial resumed on 22 May 2019 at which point a Case Guardian had been appointed and who appeared in Court on this occasion in the absence of the husband.
The husband was not made available for further cross-examination as it was submitted by his counsel, who relied on a report of the husband’s treating psychiatrist (Exh “J”) that if the husband was to give evidence in the proceedings it would be detrimental to his health and he would be emotionally decompensate in the witness box if required to do so.
The Case Guardian did not adduce any further evidence.
The husband’s oral evidence when given was mostly vague and non-responsive especially when the issue of dissipation funds by him was touched upon. This is in stark contrast to a man who unrepresented produced a detailed affidavit supported by hundreds of pages of exhibited documents some of which went back to the early days of the parties’ relationship.
Context
At the time of the trial the wife was aged 55 and the husband aged 50.
The parties commenced a relationship in early 2003 and married in 2003. The only child of the relationship B was born in 2004 and is currently 14 years old.
At the commencement of cohabitation the wife was an office worker earning an income of about $51,000 per annum and the husband was a public servant in Sydney earning an income of about $60,000 per annum.
During cohabitation the parties moved several times to follow the husband’s career. He worked some shift work but mostly day shifts.
The wife asserts that the husband was somewhat disconnected from the child and his care.
The parties separated on a final basis on 1 November 2013 and the father moved out of the former matrimonial home on 1 January 2014 to Town E, NSW. The parties’ divorce was granted in 2015.
At cohabitation
At the time of marriage the wife had no assets of significance.
At the time of marriage the husband had the following assets:
i)Apartment at O Street, Suburb N (“the Suburb N property”) purchased in 2001 for $383,000 subject to a mortgage of about $300,000.
ii)Motor Vehicle 1 purchased in January 1999 for $16,800.
iii)Furniture and chattels at the Suburb N Property.
iv)Modest savings at the ANZ Bank (Exh “D”, “… 9”),
v)Accumulating superannuation entitlements not known.
The parties’ history
The parties resided in the husband’s Suburb N property after commencing cohabitation. The wife was there alone for a period while the husband was on a posting to Country C in 2003 for six months.
The wife in March 2005 moved to Melbourne with the child to support her family while the husband remained in Sydney. She rented an apartment for her and the child in Melbourne and the rent was paid out of the parties’ joint account as the wife was not working. The wife later obtained employment in Melbourne in September 2005 with her income paid to the parties’ joint account.
Not long after the wife moved to Melbourne the husband was transferred to Town FF in southern NSW and stayed at Town EE, New South Wales where he lived with the wife’s parents rent free. The apartment in Suburb N was rented out during this time with the rental proceeds being deposited into the parties’ joint account to pay mortgage payments and property outgoings.
In January 2006 the wife moved to Town EE with the child to live with the husband. She ceased work to be primary carer for the child and remained out of the workforce until March 2009. She supported the husband’s role as a public servant.
On or about 1 May 2006 the husband sold the Suburb N property at a loss for $360,000. At the time of sale there was a mortgage owing of about $289,000. The husband asserts that he used $15,000 from the proceeds of sale of about $70,000 to make payment towards the wife’s then tax debt.
In August 2007 the husband was transferred to Town Y NSW. The parties rented in Town J for a period, then in February 2008 the parties jointly purchased a property at X Street, Town Y (“the X Street property”) for $270,000. The Department paid the government stamp duty associated with this purchase and some conveyancing costs to a total amount of $9,057 as an incidence of his employment.
In March 2009 the wife obtained full time employment in Canberra, commuting from Town Y daily. She continued in this employment until June 2012.
In around September 2011 the parties purchased a property at Z Street, Town Y for $201,000 as an investment with a mortgage advance of about $200,000. The rental proceeds were applied to mortgage and other outgoings. This property was later sold in December 2014 for $225,000.
The wife ceased employment in Canberra in June 2012. On ceasing employment she received termination payments totalling $36,000. These funds were deposited to the parties’ joint account: $11,000 was applied to pay off a joint credit card accrued by the parties for overseas travel, $8,000 to pay off a personal loan relating to Motor Vehicle 3 that was later retained by the husband on separation and sold by him for $12,000 and $17,000 applied to the deposit on the Town D property purchased by the parties in April 2013.
In November 2012 the X Street property was sold for $330,000. The Department later paid as an incidence of the husband’s employment $12,878.10 for costs associated with the sale of this property as the sale was a result of the husband’s work transfer.
In May 2013 the parties purchased the former matrimonial home at H Street, Town D (“the Town D property”) for $376,500. The Department as an incidence of the husband’s employment paid $14,250.42 to contribute to the stamp duty and other associated purchase costs. The payment of these funds was delayed and to meet such costs the husband borrowed funds by way of a personal loan of $12,550 from the KK Bank. The husband asserts that he was responsible for repayment of the personal loan which was paid out in October 2016.
On 13 June 2013, the parties received the funds from the Department associated with the sale of the X Street property and the purchase of the Town D property totalling $27,128.52. These funds were deposited into a joint account of the parties and were not applied to payout the KK Bank personal loan.
In July 2013 the husband was transferred to Suburb F.
The mortgage repayments for the Town D property from the time of purchase until separation in January 2014 were paid from the husband’s income. The wife has paid the mortgage repayments and outgoings for the Town D property from this time with some contribution from the husband to council and water rates until December 2015.
In October 2014 the parties purchased a property at Z Street, Town Y for $185,000 as a second investment. The rental proceeds were applied to the mortgage and other outgoings. In December 2014 the property was sold for $226,555 with the mortgage payout being $201,603. Net proceeds appear to have been minimal after selling costs.
Child Support
The husband asserts that between January 2014 and July 2014 the parties had a private agreement as to child support. In August 2014, the husband was assessed as owing child support for the period from 16 July 2014 to 15 October 2015 in the amount of $10,296.
On 3 December 2016, the husband was reassessed as being liable to pay $1,132 a month in child support. The husband asserts that in March or April 2017, he was reassessed as being liable for only $35 per month in child support which is what he says he is currently paying.
The husband’s circumstances
The husband is currently unemployed and resides with his parents in Queensland. After separation he lived in various rented premises until March 2016.
The husband was employed full time as a public servant throughout the parties’ relationship.
On 11 July 2014, after separation, the husband was involved in a serious rear end motor vehicle collision while he was on duty. As a result the husband sustained soft tissue neck and back injuries. He was on sick leave for four months before returning to work on a part time basis.
The husband developed major depressive disorders and suffered post-traumatic stress disorder (“PTSD”) following the incident. He continued to work on a part time basis until August 2015 when he was certified as having no capacity for any employment. He continued to receive a salary until about November 2016.
In October 2015, the husband commenced attending a 21 day Adult Trauma Program to assist with his PTSD symptoms at P Hospital.
On 30 October 2015, the husband attended upon a Mr Q, a vocational assessor, for the purpose of determining his future earning capacity as a result of the motor vehicle accident. The vocational assessor assessed the husband as being totally unemployable on the open labour market by reason of his physical and psychological incapacities.
On 6 October 2016, the husband was medically discharged from the Department.
The husband’s dissipation of funds
On 20 November 2015 the husband received a Department Insurance payout of $26,464 from R Limited for permanent impairment and pain and suffering resulting from the aforementioned incident. The husband asserts that these funds were used to repay a friend named Mr T who had lent him money for his legal fees associated with the parenting proceedings between the parties.
In early November 2016 the husband received a final termination payment from the Department of $68,986. He deposited the payout to his KK Bank Account on 1 November 2016 withdrawing $60,000 on 16 November 2016.
As a result of a claim under the Motor Accidents Compensation Act 1999 (NSW), the husband received a net settlement sum of $719,926.80 which was deposited on 4 March 2016 into the husband’s account with W Bank BSB … Account Number …13. His bank records reveal:
a)$40,000 transferred to the husband’s W Bank Account …67 on 19 April 2016 with these funds drawn by way of cheque for $39,175.99 to V Group to purchase Motor Vehicle 2 (Exh “E”);
b)$600,000 transferred to his S Bank Account …90 on 20 April 2016 with these funds later transferred to his W Bank Account …67 as to $450,000 on 8 June 2016 and total of $153,367.60 in August 2016 (Exh “E”);
c)Numerous transfers to the husband’s W Bank Account …67 leaving a balance of Nil in the W Account …13 as at 21 August 2016 (Exh “E”); and
d)From his W Bank Account …67 he withdrew $50,000 cash on 10 June 2016, $400,000 cash on 15 June 2016 and $175,000 cash on 19 August 2016 (Exh “E”).
The husband baldly asserts that funds were “spent on rehabilitation expenses, general living expenses and gambling”. This at time when he was still receiving a salary.
On 17 November 2016 the husband received a lump sum payment of $724,466.64 from the State Authorities Superannuation Scheme being a “total and permanent invalidity benefit” which was deposited into a NAB Account BSB … Account Number …64 (Exh “D”). The payment comprised benefits accumulated over the husband’s period of service with the Department from December 1989 with payments being:
Personal Account Balance $ 211,562
Employer financed benefit $ 416,228
Additional benefit $ 97,936
Basic Benefit $ 83,510
Additional adjustments $ 1,528
This is a benefit that accrued by reason of the husband’s continuing employment with the Department over a period that he remained in employment whilst the wife undertook the primary homemaking and parenting duties for the child. Accordingly, the wife has made an indirect contribution to the benefit paid.
Yet two withdrawals each in the sum of $360,000 were made on 13 December 2016 and 20 December 2016 leaving the account with a small balance. There is no evidence as to the fate of these funds. Was he holding $720,000 in cash? If so, where and is there any supporting evidence? Was the withdrawal by cheque and, if so, where was it deposited?
On 23 January 2017 the husband deposited $89,000 cash to his AA Bank Account …37 with those funds paid into his BB Superannuation Account on 25 January 2017.
In all, the husband received funds totalling $1,539,843.44.
The husband asserts that he developed a gambling addiction following the motor vehicle collision which resulted in him gambling a significant amount of the monies he received from the Motor Accidents settlement and his total invalidity superannuation benefit. The husband asserts that he realised how much he had gambled following the wife commencing property proceedings.
The husband asserts that he started attending Gambling Anonymous meetings and still attends these meetings on a regular basis. He also lodged a self-exclusion notice with 2 casinos on 20 April 2017 which restricts him from taking part in gambling at these venues.
The husband says he is able to account for some of the monies he received as a settlement and of the total invalidity benefit but not all. The husband asserts that he paid $36,000 to his solicitor for payment to the wife relating to costs of parenting proceedings.
In relation to the total invalidity benefit, the husband asserts that all that remains of this are funds now held in his BB superannuation Account. Apart from funds paid into his superannuation account ($89,000), funds expended by him to purchase the motor vehicle ($40,000) and payment of costs to the wife ($36,000) the balance remaining unaccounted for about $1.375 million
Otherwise, he asserts, funds were expended on “living expenses, payback of loans, legal costs, medical costs, rehabilitation costs and gambling….” and gifts to strangers.
The husband relies on a report from his treating psychiatrist Dr K dated 2 May 2017 (Exh “D”) that refers to in part a diagnosis of “pathological gambling”. No basis is given for the diagnosis other than it can be inferred from representations made by the husband at a time when he had “disposed” of an inordinate amount of money in a short period of time as contained in a synopsis provided by him to the psychiatrist in, it appears, early 2017; a few months before the report. Dr L makes no reference to gambling in his lengthy initial report to the referring doctor dated 17 July 2015.
In oral evidence Dr L acknowledged that as at June 2016 there was no reference at that time by the husband to any gambling issue. Any reference to the husband’s gambling issues as found in his report was solely based on what the husband had communicated to Dr L in the husband’s summary he had provided. Dr L proffered that the husband told him how the money had been dissipated and accepted what the husband told him.
A comprehensive Motor Accidents assessment in October 2015 reveals that the husband represented to the examiner that he did “not attend clubs or restaurants” and makes no reference to gambling (Exh “D”).
Otherwise, the husband relies on a “Self-exclusion Notice” (Exh “N”) from the Brisbane Casino procured by him in April 2017 as evidence of his addiction. The husband made application for the exclusion notice by application dated 20 April 2017 with the application be granted the same day. This application for exclusion was made at a time when he had no significant funds remaining.
The opinion of the husband’s treating practitioner can only be seen as reflective of assertions put to him by the husband as an afterthought after the husband had disposed of or dealt with most significant funds in an extraordinary manner as detailed above. The practitioner acknowledged as much in his oral evidence. The husband has not established that he had a “pathological addiction” to gambling.
If accepted, the husband held in a short period most significant sums in cash.
Such a course of conduct requiring explanation requires cogent and objective evidence as to his dealings so as to avoid the argument that he has in reality secreted such funds for his own purposes later or they are held in hidden assets or in a manner simply not disclosed by him.
The issue of gambling looms large in these proceedings. Mostly as the funds received by the husband they were clearly funds available to him to provide for him into the future by way of living expenses and any necessary medical expenditure.
Yet he asserts he has exhausted them save for a car, some superannuation and payment of the wife’s legal costs arising from the parenting proceedings.
Section 140 of the Evidence Act 1995 (Cth) provides:
Civil proceedings: standard of proof
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a)the nature of the cause of action or defence; and
(b)the nature of the subject-matter of the proceeding; and
(c)the gravity of the matters alleged.
Circumstances relating to asserted gambling losses were discussed by the Full Court in C and C [2006] FamCA 528 where the Court considered De Angelis and De Angelis (2003) FLC 93-133 and AB and GB (No.2) [2005] FMCAfam 402. The Court referred to De Angelis where that Full Court said at [76]:
76.We agree that gambling is for some people a form of entertainment and that a party can be no more criticised for spending money on it than the other party can be criticised for spending money on sporting or other forms of entertainment. However every case must depend on its own particular circumstances. In the present case his Honour had the advantage of evidence which permitted him to arrive at actual, or at least approximate, figures for the wife’s expenditure on gambling, and in addition he had expert psychiatric evidence regarding her propensity for gambling. Against the background of the availability of this evidence, we consider that he was entitled to treat the wife’s gambling losses as he did.”
As discussed above, it was incumbent on the husband to adduce evidence to support his assertions as to his monetary dealings. He adduces little: not one receipt for medical expenses, not one receipt for rehabilitation expenses, no rent receipts etc. Indeed, he asserts in his costs statement that his legal fees of about $42,000 paid to date of trial have been funded by borrowings from others.
For the reasons given, the husband’s evidence as to gambling is not accepted. He has had the use and benefit of most significant funds the disposition of which remains unexplained.
The wife’s circumstances
The wife does not contend any health issues.
The wife was unemployed from July 2012 to January 2014.
Following separation the wife worked intermittently in executive assistant roles dependant on the care arrangements she was able to obtain for the child B.
The wife was being paid an annual salary of about $88,920 in these executive assistant roles. The wife asserts that she stopped work in October 2016 as she was unable to arrange child care for B until starting up her own small business at some point in 2017. She asserts that her current weekly income from this business and her part time management of Airbnb properties is approximately $1,000 a week.
Final parenting orders were made on an undefended basis in relation to the child of the parties’ relationship in July 2015 after the husband disengaged from parenting proceedings. Orders were made that provide for the wife to have sole parental responsibility for the child and for the child to live with the wife.
The wife has assumed since separation the primary care of the child with no assistance or engagement from the husband whose last contact with the child was in late October 2014. It is expected that her primary role in this regard will continue into the future.
The wife and child presently occupy the former matrimonial home at H Street, Town D. The child presently attends a local School where he is in year nine. The wife pays the private school fees for the child.
The Approach to Property Adjustment
The approach to the determination of an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4).
The Court in the application of s 79(2) of the Act needs to conclude that it would be unjust or unfair to leave the parties’ property rights intact.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
It would, in some circumstances, be unjust or unfair to leave property rights intact where there is common ownership and discrete assets are sought by each. Such is the case in this matter and the parties both agree that their common ownership of property is to be brought to an end so as to reflect their respective contentions as to entitlement.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property as does the husband.
It is appropriate that property adjustment orders be made.
Otherwise, a consideration of s 79(4) factors as discussed below reveals it would be unjust or unfair to leave the parties’ property rights as they are.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant: (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The Balance Sheet
A working balance sheet was admitted marked as Exhibit “C”.
Some issues as to value can only be resolved on the basis of admissions against interest by the relevant party.
The balance sheet for determination of the question of property adjustment as at the date of trial comprised:
Assets:
Joint H Street Town D $ 650,000
Wife M Artwork $ 10,000
Wife Motor Vehicle 4 $ 5,000
Husband Motor Vehicle 2 $ 20,000
Wife Contents $ 1,000
$ 686,000
Liabilities:
Joint Mortgage Town D $ 360,000
$ 326,000
Superannuation:
Husband BB Super $ 88,661
Husband GG Super $ 6,500
Wife HH Super $ 77,506
$ 172,667
Insignificant bank balances so long after separation have been omitted.
Otherwise, the wife seeks to have the Court included in the asset pool notionally the larger capital sums received by the husband being $724,466.64 from the State Authorities Superannuation Scheme and Motor Accidents Compensation Act NSW and the net settlement sum of $719,926.80 totalling $1,444,393.44. As discussed above the husband is unable to properly account for about $1.375 and it is proper that such sum be notionally included in the “pool” for division.
The husband also had other funds paid to him until November 2016, he having been paid his salary until that time.
It is clear that the Motor Accidents Compensation funds received were personal to the husband in that the entitlements accrued as a result of injury post separation. It was conceded by counsel for the wife that the wife made no contribution to the Motor Accidents payout received by the husband.
The superannuation funds were a lump provision payable in recognition of total and permanent disability being a payout of the husband’s then superannuation entitlement. Regrettably, apart from the components of the superannuation lump sum benefit set out above, the calculations relevant to each component are not known.
Overall, the funds were a provision that would be expected to provide for the husband’s needs for the years ahead. The wife’s contribution to the funds received can only be seen as indirect in her continuing role in the home and with the child that facilitated the husband continuing his public service career at various locations in NSW and thus maintaining his entitlements under his superannuation fund throughout cohabitation. But, nevertheless, she made such a contribution of sorts to the State Authorities Superannuation Scheme benefit. Such a contribution is, of course, only part of a consideration of her contributions in this matter particularly as to parenting post separation considered below.
The husband’s contention is that in his present asserted parlous circumstances his needs should be recognised from the presently identifiable asset pool, he having exhausted an inordinately large capital sum in an inordinately short period of time.
Having regard to the onus on the husband and the weight of evidence adduced by him, the Court is not satisfied that the funds were expended as asserted by him but that on balance they remain mostly at his disposal. Even if that is not the case, he has not established that his dissipation of funds should not simply be considered as waste. His assertions as to the psychological dysfunction that led to such dissipation is not accepted as discussed above.
In the circumstances of this matter the issue of such funds will be considered in the context of s 75(2) of the Act.
Contributions
The husband brought into the relationship assets referred to above. It is conceded that his contributions at this time exceeded those of the wife. The parties’ cohabitation was for a total of about 10 years with the parties now separated for more than five years.
Counsel for the wife contended for four different assets pools comprising:
Pool 1: The home and personalty set out above
Pool 2: TPI Superannuation Benefit
Pool 3: The Motor Accidents compensation
Pool 4: Present Superannuation entitlements of the parties.
He contends that contributions to each pool differ.
As to Pool 1, the wife contends that overall contributions including her significant post separation parenting contributions in the absence of but minimal child support as referred to above should result in the pool being adjusted as to 55 per cent to the wife and 45 per cent to the husband. On balance such an assessment of contributions for the reasons discussed above is proper.
As to Pool 2, the wife contends contributions by her as referred to in the discussion above and her ongoing contributions post separation must mostly give way to the TPI nature of the benefit that triggered the payment. She contends for a contribution entitlement of 25 per cent to her and 75 per cent to the husband. The husband joined the fund in December 1989, 14 years before a cohabitation of about 10 years. Her support for the husband’s continuing employment by way of contributions are set out above. On balance it is proper to have regard to the nature of the benefits paid and it is considered that overall that to this pool her contributions should be regarded as to 15 per cent and as to the husband 85 per cent. The balance unaccounted for is $1.375m so the wife’s entitlement would be
As to Pool 3, the wife contends no contribution entitlement it being a motor accident compensation settlement. Such a position is proper in the circumstances.
As to Pool 4 it is contended that the majority of superannuation contributions accrued during the cohabitation and shortly thereafter with both parties having modest funds at present. Neither party seeks a splitting order it is contended that they should not be the subject of notional adjustment on a contribution basis.
Counsel for the husband asserted that as to the presently identifiable asset pool that contributions should be regarded as equal save for an adjustment in favour of the husband for his initial contribution. By reason of the discussion above such a contention is untenable.
The approach contended for by counsel for the wife would result in the wife receiving 55 per cent of Pool 1 being $179,300 plus 15 per cent of Pool 2 ($724,466 less the husband’s superannuation pay in of $89,000 leaving a balance of $635,466) being $95,319, totalling $274,619 and from Pool 4 her present super entitlement of $77,506, in all totalling in all $352,125.
Should she retain the home and her other present assets she would then have net assets of $383,506. She would be required to pay the husband an adjusting payment of about $31,381 to retain the home.
Thereafter, it is contended by counsel for the wife that there should be a further adjustment for relevant s 75(2) factors that would result in the husband being required to pay to the wife an adjusting payment.
The overall approach: One Pool
Otherwise, the Court may approach the matter by way of an assessment of contributions to trial as to the present identifiable asset pool set above including present superannuation (totalling $498,667) together with the net funds otherwise received and unaccounted for by the husband from the two larger payouts being $1,406,955. Such a pool would comprise:
Assets:
Joint H Street Town D $ 650,000
Wife M Artwork $ 10,000
Wife Motor Vehicle 4 $ 5,000
Husband Motor Vehicle 2 $ 20,000
Wife Contents $ 1,000
$ 686,000
Liabilities:
Joint Mortgage Town D $ 360,000 $ 326,000
Superannuation:
Husband Sun Super $ 88,661
Husband GG Super $ 6,500
Wife HH Super $ 77,506 $ 172,667
Husband Net funds from payouts not accounted for $ 1,375,000
Total $ 1,873,667
As discussed above it is proper also to have regard to the wife’s contribution to the TPI fund that the husband asserts he has had the use and benefit of as discussed above. Such would weigh contributions overall in favour of the husband.
The Court can then proceed to make an appropriate adjustment as to relevant factors under s 75(2) as appropriate.
The overall pool approach is to be preferred by reason that the wife’s contributions overall can more readily be identified against such a notional pool.
On such an asset pool basis it is appropriate by reason of the matters discussed above that the wife’s contributions be seen as 20 per cent and to the husband 80 per cent.
On this basis the wife’s 20 per cent entitlement of such a pool ($1,873,667) would be the sum of about $374,733. This would mean the husband would retain his funds, his superannuation and car and be required to transfer the home to the wife who would assume liability for the mortgage, retain her other present assets and have to pay to him an adjusting payment of about $8,773.
Section 75(2) factors
The Court is required to have regard to s 75(2) factors that are as follows:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
Relevantly, the wife is aged 55 and the husband 50. The wife does not assert any adverse health circumstances. The husband has ongoing physical and psychological disabilities. While no evidence was adduced as to the components of the funds received by the husband, it can be presumed that the superannuation benefit classified as being a “total and permanent invalidity benefit” and the compensatory relief is inextricably related to the husband’s ongoing adverse health circumstances.
The present income circumstances of the parties are set out above. The present assets are identified. The husband has received significant funds to address his future needs. The Court is not satisfied that he has dissipated such funds as he asserts. They are available to him to meet his needs. Otherwise, if he has expended the funds in a wasteful manner, his recklessness should not be sheeted home to the wife in that she should be required to have regard to his resultant circumstances.
Importantly, the wife wholly has the ongoing parenting obligation for the parties’ child now aged 14 without any assistance from the husband.
Both parties have modest accumulation superannuation entitlements as identified above.
The wife has little expectation of anything but minimal or no child support into the future.
A consideration of the above highlighted factors should result in a further adjustment in favour of the wife as to five per cent.
Such an adjustment would be in the order of about $93,600 (($1,873,667 x five per cent).
Discussion
Overall, the wife is entitled to retain her present assets including superannuation, have the home transferred to her subject to the mortgage, and have the husband pay to her the rounded figure of $84,800 ($93,600 less $8,773).
The Court is required to consider the justice and equity of orders proposed. It may be that an order that the husband pay to the wife the sum set out is illusory in terms of enforcement but it represents the entitlement of the wife as determined.
It is appropriate that the wife be given time as sought by her to refinance the mortgage on the home by reason of her present financial circumstances.
In the circumstances of this matter, it is appropriate that such orders be made.
Orders will be made accordingly.
I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 1 August 2019.
Associate:
Date: 1 August 2019
Key Legal Topics
Areas of Law
-
Family Law
-
Property Law
-
Equity & Trusts
Legal Concepts
-
Remedies
-
Injunction
-
Jurisdiction
-
Costs
-
Procedural Fairness
0
7
2