Earlman & Blazena
[2023] FedCFamC2F 922
•27 July 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Earlman & Blazena [2023] FedCFamC2F 922
File number: MLC 125 of 2023 Judgment of: JUDGE CHAMPION Date of judgment: 27 July 2023 Catchwords: FAMILY LAW – Property settlement – De facto relationship – Relationship of approximately eight years –Financial and non-financial contributions during the relationship – De facto Wife received Total Permanent Disablement (TPD) Payment – Whether TPD Payment should be characterised as a contribution of the de facto Wife – Property wholly purchased with proceeds from TPD Payment – De facto Wife’s future needs given serious health conditions Legislation: Family Law Act 1975 (Cth) ss. 90SF, 90SM, 106A Cases cited: Aleksovski v Aleksovksi (1996) 135 FLR 131
Beckett & Beckett [2017] FCCA 608
Clauson & Clauson (1995) FLC 92-595
Jabour v Jabour (2019) 59 Fam LR 475; [2019] FamCAFC 78
JEL & DDF (2001) FLC 93-075
Singersons & Joans [2014] FamCAFC 238
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Wallis & Manning (2017) FLC93-759; [2017] FamCAFC 14
Division: Division 2 Family Law Number of paragraphs: 71 Date of last submissions: 12 July 2023 Date of hearing: 12 July 2023 Place: Melbourne Applicant: In person Counsel for the Respondent: Mr McGann Solicitor for the Respondent: Griese Lawyers ORDERS
MLC 125 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR EARLMAN
Applicant
AND: MS BLAZENA
Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
27 JULY 2023
THE COURT ORDERS THAT:
1.The Respondent retain for her sole use and benefit to the exclusion of the Applicant, all of her right title and interest in the real property situated at and known as C Street, Town D, Victoria registered in her name and more particularly described in certificate of title VOLUME … FOLIO … (Town D property).
2.The Applicant, within 21 days of the date of these orders, at his expense, do all necessary acts and things and sign all necessary documents including any deed or instrument as may be required to withdraw Caveat Number … (Caveat) lodged on the Town D property.
3.The Respondent, within 21 days of the date of these orders, at her expense, do all necessary acts and things and sign all documents including any deed or instrument as may be required to transfer registration and ownership of the Motor Vehicle 1 to the Applicant and provide the Applicant with copies of all documents in her possession (if any) relating to the registration or ownership of Motor Vehicle 1.
4.The Respondent retain for her sole use and benefit to the exclusion of the Applicant, all of her right title and interest in Motor Vehicle 2.
5.The Applicant retain for his sole use and benefit to the exclusion of the Respondent all superannuation currently in his name.
6.Pursuant to s. 106A of the Family Law Act 1975 (Cth), should either party fail to execute a deed or instrument necessary to comply with these Orders if practicable to do so, a Judicial Registrar of this Court is hereby authorised to execute the deed or instrument in the name of that person and do all acts and things necessary to give validity and operation to the deed or instrument.
7.Further to Order 6, if the Applicant fails to execute a deed or instrument necessary to comply with the Order to withdraw the Caveat in accordance with Order 2 if practicable to do so Mr Michael Griese of Griese Lawyers (Mr Griese) be engaged to execute such document or instrument and do all such things as may be necessary to withdraw the Caveat provided first that Mr Griese has filed an affidavit in this Court as to the Applicant’s failure to withdraw the Caveat in accordance with Order 2, and such affidavit to be sufficient proof of the Applicant’s non-compliance.
8.Unless otherwise specified in these orders:
(a)each party be solely entitled to the exclusion of the other to all property in the possession of such party as at the date of these orders; and
(b)each party forgo any claims he or she may have to any superannuation or related benefits (including the TPD Payment) belonging to or earned by the other.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE CHAMPION:
INTRODUCTION
Mr Earlman seeks orders altering property interests pursuant to s. 90SM of the Family Law Act 1975 (Cth). Ms Blazena is the Respondent.
Property Interests
The asset pool is as follows:
Asset Ownership Value ($) C Street, Town D Ms Blazena E$465,000 Motor Vehicle 2 Ms Blazena E$38,200 Motor Vehicle 1 Ms Blazena E$6,500 Total non-superannuation assets $509,700 Superannuation Mr Earlman $142,028 Total superannuation assets $142,028 Total property interests $651,728 Agreed matters
Before and/or in the course of the hearing, to their credit, the parties significantly reduced the issues in dispute. In summary, the parties agreed that:
(a)Ms Blazena ought to retain the sole ownership of the Town D property;
(b)Ms Blazena would transfer, at her expense, ownership of the Motor Vehicle 1 to Mr Earlman; and
(c)Mr Earlman would retain all his superannuation.
Each of the Town D property, the Motor Vehicle 2 and the Motor Vehicle 1 are registered solely in Ms Blazena’s name.
The $465,000 value of the Town D property is Mr B single expert valuation. Neither party challenged Mr B’s valuation. His evidence is accepted. As to real estate, after Ms Blazena received the TPD payment (discussed below), the first property purchased was a property at E Street, Suburb F, Victoria (Suburb F property) which was bought for $435,000, renovated at a cost of approximately $75,000, and then sold for $620,000. Following its sale, and a period of renting, the Town D Property was purchased.
I accept Ms Blazena’s evidence as to Motor Vehicle 1’s purchase price at $6,500. There was no evidence of its depreciation since purchase.
Mr Earlman has superannuation of $142,028.26 (ATO records).
Mr Earlman’s oral evidence was that he has an outstanding child support liability of approximately $20,000 for his (now) 17-year-old son from a previous relationship. It is appropriate to exclude Mr Earlman’s personal debt as to child support from the balance sheet because it has no connection with the relationship.
Mr Earlman said that Ms Blazena remains in possession of some of his tools. On the evidence, I was unable to make any finding as to which tools she may retain or ascribe any value to them. For that reason, any tools are not included on the balance sheet.
The TPD Payment
As to the asset pool, it was significant that in late 2019 and early 2020 Ms Blazena received a Total Permanent Disablement (TPD Payment) of approximately $700,000. Ms Blazena had ceased work in late 2016 following her diagnosis of a terminal illness and has developed related very serious and ongoing health conditions. Proceeds from the TPD Payment purchased all the non-superannuation assets: real estate, Motor Vehicle 2 and Motor Vehicle 1.
I will consider the TPD Payment and Ms Blazena’s disability further in a consideration of contributions and the relevant s. 90SF(3) factors.
Disputed matters
The only disputed matter concerned Motor Vehicle 2. Each party seeks ownership of Motor Vehicle 2. The mid-point Red Book value of Motor Vehicle 2 is E$38,200. The reduced scope of the dispute greatly assisted the Court. Nonetheless, any order as to Motor Vehicle 2’s ownership has to be just and equitable in the context of orders as to the global asset pool. The parties (at least implicitly) approached the matter on the basis that in any alteration of their property interests there was no necessity to treat the parties’ contribution to superannuation interests separately from their other contributions by way of adopting a two pool approach. I have approached the matter by considering all the assets (including superannuation) as part of a single asset pool.
By way of an initial reference point, if the parties’ property interests were altered as agreed and Ms Blazena retained ownership of Motor Vehicle 2 she would retain 77.2% of the asset pool ($503,200) and Mr Earlman 22.8% of the asset pool ($148,528). Ms Blazena would retain $354,672 more than Mr Earlman. Alternatively, if ownership of Motor Vehicle 2 were transferred to Mr Earlman, Ms Blazena would retain 72.4% of the asset pool ($464,700) and Mr Earlman 28.6% of the asset pool ($187,028). That is, Ms Blazena would retain $277,672 more than Mr Earlman. I note in passing that it would be open to the Court to order the sale of Motor Vehicle 2 and distribution of the assets between the parties.
Summary
In summary, because I have concluded that the TPD Payment was primarily a contribution of Ms Blazena and that some further alteration of property interests in her favour is just and equitable by reference to the relevant s.90SF(3) factors it is just and equitable that Ms Blazena retain ownership of the Motor Vehicle 2. My reasons are below.
A note on the witnesses
Each party filed a trial affidavit in this proceeding. For convenience, in these reasons references to Mr Earlman’s affidavit or the applicant’s affidavit are marked “AA”. References to Ms Blazena’s affidavit as the Respondent are marked “RA”.
Ms Blazena well-understood that the TPD Payment was critical in providing for her lifelong financial needs. Ms Blazena was an impressive witness. She had a strong recollection of the financial details of her relationship with Mr Earlman. In a rational way, she explained that she had applied the capital sums of the TPD Payment to achieve the security of owning her own home, mortgage free. As to Motor Vehicle 2, her evidence was striking that her TPD Payment had enabled her to purchase a quality motor vehicle which she previously could not afford. In a regional town, a reliable car is essential so she can travel for her health or medical needs.
Mr Earlman faced the challenges of a self-represented litigant. Despite some assistance from the Court, he did not challenge Ms Blazena on any of her evidence. Mr Earlman was far less able than Ms Blazena to recall financial details. Although there were exceptions as noted below, generally if there was a conflict between the evidence of Ms Blazena and Mr Earlman I preferred the evidence of Ms Blazena.
BACKGROUND AND FINDINGS
Mr Earlman is 54 years old.
Ms Blazena is 48 years old.
Mr Earlman has one son (now aged 17) from a previous relationship. Ms Blazena has 2 adult children from a previous relationship. There are no children of the parties’ relationship.
In 2013 the parties started living together. As set out above, their de facto relationship lasted about 8 years. Mr Earlman moved out of the Town D property in February 2022. Ms Blazena’s adult children lived with the parties very briefly (a month or two).
Pre-relationship superannuation
It was undisputed that at the start of the relationship Mr Earlman had superannuation of $86,575.17: (AA, [20]); (COG-1). As a reference point, that approximates 13% of the asset pool ($86,575 of $651,728). Ms Blazena’s pre-relationship superannuation, which approximated $50,000, has been wholly depleted by the subsequent TPD Payment to her.
The parties brought limited assets to the relationship
With the exception of superannuation, I find that each party brought limited assets to the relationship.
Superannuation aside, at the start of the relationship, Mr Earlman had debts greater than his assets. For a time, the parties lived in a house Mr Earlman owned in Town G, Victoria. “The bank” repossessed the Town G property: Mr Earlman owed approximately $318,000; the bank recovered only approximately $270,000: (RA, 35(b)). Notwithstanding Mr Earlman’s evidence that he had various other assets of a total value of approximately $50,000 (including Motor Vehicle 2 valued at $15,000, another vehicle, Motor Vehicle 3 valued at $20,000, Motor Vehicle 4 and Motor Vehicle 5 valued at $10,000 and a bike: AA [8]), Mr Earlman reported all of these items as stolen in a police report dated 2015: (RA [17] (BK-3)). Ms Blazena’s evidence (which I accept) was that only Motor Vehicle 4 and Motor Vehicle 5 and Motor Vehicle 3 were duly returned and sold for a combined amount of $6,200.
Ms Blazena’s evidence was that at the start of the relationship she owned approximately $15,000 worth of assets comprised of Motor Vehicle 6 with an estimated value of $12,000 and approximately $3,000 in savings: (RA [14]).
When the relationship started, Mr Earlman had full-time employment as a tradesperson with H Company earning approximately $140,000 annually: (AA, [14]).
In 2014 (within a year of the relationship’s commencement) H Company made his employment redundant. He received $30,000 severance pay and a further payment of $7,000: (AA, [12]). I infer that the amount of the severance payment indicates that part of his entitlement was earned by reference to employment before the relationship. Mr Earlman had subsequent FIFO employment at Town J in Western Australia for six months and at Town K for approximately three months: (AA, [13]). He ceased full-time work as a tradesperson in 2015.
At the start of the relationship, Ms Blazena was employed by L Company (RA [10]) and later by M Company in Town D: (AA, [14]).
Ms Blazena’s disability
In 2016, Ms Blazena was diagnosed with a terminal illness. She had to undergo extensive surgeries. She developed a medical condition following surgery which resulted in many health problems and reliance on a mobility walker. Ms Blazena had a medical condition for which she had to undergo surgery. She has multiple health issues. She suffers from diabetes as a further result of her medical condition. As she put it, “my health will further deteriorate over time, there is no possibility of recovering”: (RA, [5]). Further, she said, “every day is hard work walking in my shoes. It is physically gruelling and exhausting for me”: (RA, [29]). The seriousness of Ms Blazena’s health conditions is beyond argument. Despite the doubtless severity of Ms Blazena’s health conditions, Ms Blazena did not contend, and there was no evidence that, her health conditions are terminal.
Since she ceased work because of her health in 2016 Ms Blazena has received a disability pension which is her only income source. She will not be fit to return to work. I accept that she has “high medication and medical costs [which] severely impact the family budget”: (RA, [34]).
Mr Earlman as Ms Blazena’s carer
In a forthright way, Ms Blazena accepted in her oral evidence that after 2016 Mr Earlman was her carer. He was entitled to, and in fact received, a disability support carer’s pension because of his care for Ms Blazena. I accept also that his partner’s serious illness had a real and consequential impact upon Mr Earlman. Ms Blazena said that, apart from Mr Earlman’s role as her carer, she also “had the full support of [her] family who did more than their fair share of caring for me”: (RA, 35(g)).
Mr Earlman’s evidence tended to overstate his contribution to the care of Ms Blazena. Mr Earlman asserted, and Ms Blazena denied, that she was bedridden for 2½ years after her diagnosis and surgery: (AA [16]; RA35(f)). I prefer Ms Blazena’s evidence. I find that an accurate description of Mr Earlman’s contribution is as set out in para. 35(e) of Ms Blazena’s affidavit:
I say that throughout our relationship [Mr Earlman], before I received my diagnosis, did the majority of the cooking and shopping as he enjoyed cooking and was home more often than I was. In return, I did all the other household domestic jobs such as cleaning and laundry. This did not change after I became unwell and I continued to do as well as I could manage, all of the household domestic jobs.
I find that Mr Earlman’s carer obligations did have an impact on his income earning capacity after 2016. His capacity to engage in full-time work was reduced because of his carer’s responsibilities. On the other hand, he had, however, not been in full-time employment for some time before late 2016 when Ms Blazena became seriously ill.In 2017 Mr Earlman obtained casual employment as a community worker. He worked mainly (but not exclusively) at N Authority: (AA [18]). Mr Earlman’s evidence was that the casual nature of that employment gave him the flexibility he needed as Ms Blazena’s carer: (AA [18]). There was no evidence of his earnings or how many hours weekly he worked in that job.
Ms Blazena’ receipt of the TPD payment
In late 2019 and early 2020 Ms Blazena received the TPD Payment (by 3 instalments) totalling approximately $700,000: (RA [25]). The amount of the TPD Payment exceeds the total asset pool.
Mr Earlman’s evidence was that Ms Blazena’s receipt of that TPD Payment meant that he was able to stop work to solely care for her: (AA, [19]).
In early 2020, by means of the TPD Payment, the Suburb F property was purchased mortgage-free for $435,000.
Ms Blazena applied money from the TPD payment to update her furniture and white goods. Mr Earlman quantified the amount spent on furniture and white goods at $70,000: (AA [23]).There was no evidence as to either party’s retention of the furniture and white goods or their value. Ms Blazena’s evidence was that she spent approximately $75,000 from the TPD Payment on trades for the renovation of the Suburb F property to update the kitchen and laundry: (RA, 35(l)).
Motor Vehicle 2
After the TPD payment was received, Motor Vehicle 2 (ownership of which is disputed in this proceeding) was purchased for approximately $40,000: (AA [23]).Mr Earlman’s evidence is that it is a vehicle likely to appreciate in value because it has an attraction to collectors. Despite his assertion that Motor Vehicle 2 was worth $50,000, he is not a car valuer, and I prefer the Red Book value of Motor Vehicle 2: $33,000 - $43,400 (midpoint $38,200).
In early 2021, the Suburb F property was sold for approximately $650,000. Ms Blazena’s evidence was that once transaction and renovation costs were factored in, any “profit” on the purchase and sale of the Suburb F property approximated $70,000-$75,000.
Arrangement of financial affairs
The parties maintained two bank accounts. Ms Blazena annexed to her affidavit extracts from a statement from her O Bank account into which the TPD Payment was paid (B-04) and which was solely in her name and a joint account with the CBA #...06 (B-05). The CBA joint account was Mr Earlman’s only bank account. Ms Blazena’s evidence was that predominantly she drew upon her O Bank for personal expenses and Mr Earlman drew upon the CBA joint account. Not long before the relationship ended, the parties purchased a Motor Vehicle 7. It lacked the power to tow Motor Vehicle 1 and was duly sold. The $12,000 sale price was deposited into the CBA account. Ms Blazena asserted that Mr Earlman drew upon that account for his personal needs. She said Mr Earlman retained the $12,000 sale price of Motor Vehicle 7. Given the CBA was a joint account, who retained the benefit of the $12,000 (and for what purposes) remained unclear. I make no finding as to which party received the benefit of the $12,000.
Town D Property
In mid-2021, after a short period of renting, the Town D property was purchased for approximately $440,000.
Mr Earlman said that each of the properties (the Suburb F property and the Town D property) were registered solely in Ms Blazena’s name “as my ex-defacto and mother of my son was vindictive and [Ms Blazena] was concerned my ex-defacto would try to claim an interest in any assets I held”: (AA, [29]).
In 2022 Mr Earlman lodged a caveat over the Town D property (RA, [27]).
Events and the parties’ circumstances since the end of the relationship
In February 2022 Mr Earlman moved out of the Town D property. Since February 2022, Ms Blazena’s daughter (and now 3 year old granddaughter) live with her at the Town D property. Her daughter is Ms Blazena’s full-time carer: (RA [7]).
Mr Earlman’s primary residence is Motor Vehicle 1.
For reasons which were not explained beyond that Mr Earlman wished to leave Victoria because (in part) he was not in a “good place” following the end of the relationship, the Motor Vehicle 1 is parked on a property in regional Queensland some 90 km from Town P . His evidence was that he lives in the Motor Vehicle 1 rent-free on private property in exchange for some caretaking work.
Despite his trades qualifications (RA, [9]) Mr Earlman has had no paid employment in the last 12 months. His evidence was that one of his current challenges in finding employment (despite his qualifications) is that his “tickets” to perform that work have lapsed. Regaining his “tickets” would cost approximately $33,000, capital he does not have. He currently receives a job seeker payment allowance. He has diabetes but is fit for work. He does not have a motor vehicle which doubtlessly restricts his capacity to look for work (and should he secure work the lack of a motor vehicle will restrict his capacity to travel for work) given that he lives outside a regional centre.
STATUTORY FRAMEWORK
Justice and Equity
It is just and equitable to make a property settlement order because there will no longer be the common use of property by the parties: Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52, [42].
Ms Blazena did not oppose an order transferring ownership of Motor Vehicle 1, which is in Mr Earlman’s possession, to him at her expense.
Contributions
I must take into account the parties’ financial and non-financial, direct and indirect, contributions to the acquisition, conservation or improvement of the property: ss. 90SM(4)(a)-(b). I must also take into account the parties’ contributions to the welfare of the family: s. 90SM(4)(c).
With the exception of Mr Earlman’s superannuation of $86,575.17, neither party had substantive assets at the relationship’s outset.
In the early part of the relationship the evidence Mr Earlman’s work earnings led him to make a greater financial contribution than that made by Ms Blazena. In early 2014 (just one year into the relationship) Mr Earlman’s job was made redundant and he received a redundancy payment of approximately $30,000: (RA [19]). As I have said, I infer that the amount of that entitlement was in part referable to his pre-relationship service with H Company. He had some further FIFO work at Town J and Town K after his redundancy. I find that Ms Blazena’s evidence that Mr Earlman “barely worked again after becoming redundant” was an overstatement: (RA [19]). There was, however, no evidence of Mr Earlman’s earnings by the FIFO work or as a community worker.
Because of Ms Blazena’s illness, she had no earnings after the end of 2016.
From 2017 onwards the parties principally relied upon their social security entitlements for income: Ms Blazena on a disability pension and Mr Earlman on a disability carer’s pension.
The TPD Payment
The TPD payment provided the foundation for the acquisition of property (real estate, Motor Vehicle 2 and Motor Vehicle 1). It funded the purchase of the furniture and the trades for the renovation of the Suburb F property. But for the receipt of the TPD payment, there would have been no assets of significant value to divide: see Jabour v Jabour (2019) 59 Fam LR 475; [2019] FamCAFC 78, [25]. The TPD Payment is nonetheless one of the myriad of the contributions both parties made to the relationship: Jabour, [73]. The TPD Payment is not quarantined from the asset pool and the myriad other contributions must not be accorded a subsidiary role: Wallis & Manning (2017) FLC93-759; [2017] FamCAFC 14, [20]. The Court is mandated to look at the totality of what the parties have contributed in a financial and non-financial sense: Singersons & Joans [2014] FamCAFC 238, [66].
In Aleksovski v Aleksovksi (1996) 135 FLR 131 at [139], a Full Court majority found that “the wife’s damages award and, in particular, that portion of it which related to pain and suffering, should be regarded as a contribution by her to the marriage and to the family.”
A TPD Payment usually has a slightly different character from a personal injuries payment because, in large part, it is paid in respect of future needs rather than representing compensation for past pain and suffering. There was no specific evidence as how the TPD Payment in this case was calculated. The authorities are to the effect that a TPD Payment is ordinarily “compensation for future economic loss”: Beckett & Beckett [2017] FCCA 609 at [127]. In Beckett, Altobelli J held at [154] that:
in the same way as a spouse is deemed to contribute to the superannuation entitlements of his or her spouse during cohabitation (in the normal course) it is contended that the same should apply so far as the TPD benefits received pursuant to the trust deed establishing the superannuation fund
I find that overwhelmingly the TPD Payment was a contribution of Ms Blazena to the relationship. It provided the foundation for the parties’ acquisition of all the non-superannuation assets. Nonetheless, as Altobelli J recognised in Beckett, Mr Earlman contributed to the TPD Payment by his broader contributions to the relationship. On the other side of the ledger, Ms Blazena contributed to Mr Earlman’s accrual of his superannuation because of her ongoing contributions to the relationship.
As to the welfare of the family in s. 90SM(4)(c), I give due weight to Mr Earlman’s care for Ms Blazena because of her illness. Although I have found that he tended to overstate the extent of his non-financial contribution, he had a carer’s obligation for most of the relationship, from the time of Ms Blazena’s illness in late 2016 until the relationship came to an end in 2022.
As to Mr Earlman’s non-financial contributions to the acquisition, conservation or improvement of any property, I give some weight to his involvement in the painting of Suburb F with Ms Blazena. I find that his work was more limited than he contended and was limited to painting and cutting some holes in the ceilings for downlights as Ms Blazena set out in her unchallenged evidence at para. 35(m) of her affidavit. I also accept Ms Blazena’s unchallenged evidence that Mr Earlman performed some limited work at the Town D property in the removal of a small tree, painting in the shed and redoing the lawns: [RA, 35(o)].
It is necessary to move from a qualitative evaluation of contributions to a quantitative reflection of such an evaluation. There must be a “leap” from words to figures: Steinbrenner & Steinbrenner [2008] FamCAFC 193, [234]. Given the quantum of the TPD payment, there must be a substantial weighting of contributions in favour of Ms Blazena. Nonetheless, there must also be due weight given to Mr Earlman’s contributions particularly as to pre-relationship superannuation, his greater financial earnings early in the relationship and his non-financial contribution as Ms Blazena’s carer. I therefore assess the contributions of the parties (financial and non-financial, direct and indirect, and to the welfare of the family) to be 75:25 in favour of Ms Blazena. In dollar terms, Ms Blazena’s contribution is $488,796. Although that assessment of her contribution is less than the value of the TPD Payment, the TPD Payment needs to be considered in the context of myriad other contributions. Mr Earlman’s contribution is $162,932. Ms Blazena’s contribution is $325,864 greater than Mr Earlman’s contribution.
An adjustment under s. 90SM(4)(d), (e), (f) and (g) and 90SF(3)?
Section 90SF(3)(a) - Health of the parties
Ms Blazena confronts an array of the most serious health conditions. She is 48 years old. She cannot work. Her unchallenged evidence was that her medical expenses “severely impact the family budget”: (RA, [34]). Despite suffering from diabetes, Mr Earlman has relatively good health.
Section 90SF(3)(b) -Gainful employment
Ms Blazena has no capacity for gainful employment. Mr Earlman has a capacity for gainful employment. He has challenges: he has no capital to regain his “tickets” which underpinned his substantial income as a tradesperson; he has no vehicle or capital to buy one and the Motor Vehicle 1 which is his primary residence is situated in an area where the need for a vehicle is self-evident. Nonetheless, he has skills and capacity to work. His health is not a barrier to work. He is of an age where he might expect to have another decade of working life. In Clauson & Clauson (1995) FLC 92-595 at 81,911, a Full Court observed: “it has long been recognised that in most cases the most valuable “asset” which a party can take out of the marriage is a substantial, reliable income-earning capacity”.
There is a disparity between Ms Blazena whose illness means she has no future income earning capacity despite being aged only 48 and Mr Earlman who has a substantial income earning capacity because of his qualifications and skills and relative good health.
Section 90SF(3)(g) -A reasonable standard of living
So as to have a reasonable standard of living Ms Blazena is critically reliant upon the Town D property. I accept her evidence that is she is also critically reliant on the Motor Vehicle 2. There are countervailing considerations: Mr Earlman’s standard of living is also affected by the absence of a motor vehicle and the fact that he has no secure housing. He relies on Motor Vehicle 1 as his primary residence.
Other s. 90SF(3) factors
Ms Blazena’s poor health will entitle her to the benefit of a disability support pension (s. 90SF(3)(f). Mr Earlman has no comparable entitlement. There are no issues about maintenance. The relationship affected Mr Earlman’s earning capacity (to some degree) because of his carer responsibilities. Although Mr Earlman’s “tickets” lapsed during the relationship the evidence was that he had ceased his work before the advent of Ms Blazena’s illness: s. 90SF(3)(k).
There are s. 90SF(3) factors in favour of both parties. Whilst not ignoring the factors in favour of Mr Earlman, a further adjustment in favour of Ms Blazena is just and equitable because of the stark relative difference in the parties’ health and the resulting stark disparity in their capacity for future gainful employment. Ms Blazena is critically dependent on the existing property if she is to have a standard of living that is in all the circumstances reasonable and has no capacity to improve her situation by work. Any adjustment is less than it might otherwise be because there ought not to be double counting as to the TPD payment. The TPD Payment is a contribution I have characterised as overwhelmingly having been made by Ms Blazena in the context of the parties’ myriad contributions. It is also a capital sum which having been applied to the mortgage-free purchase of real estate, gives Ms Blazena a measure of security as to her future needs. Further, Mr Earlman’s capacity for gainful employment has to be realistically assessed. He has not worked full time for a number of years.
A Just and Equitable Order
On a preliminary view, the s. 90SF(3) factors warrant a further adjustment of property interests of 5% in favour of Ms Blazena. In dollar terms that approximates a $32,586.40 adjustment, having regard, in particular, to Ms Blazena’s future incapacity for any work and that Mr Earlman has a capacity for a further decade of work but has been unemployed for some time. Further, Ms Blazena has secure housing; Mr Earlman does not. A countervailing factors limiting any adjustment is that my assessment of contributions means that Ms Blazena will retain a significantly greater percentage of the assets before any further adjustment pursuant to s. 90SF(3) factors. An 80:20 percentage division would lead to Ms Blazena retaining property valued at $521,382.40 and Mr Earlman retaining property valued at $130,345.60, a difference of $391,036.80.
Any property order must attach to particular property. Further, the parties had achieved substantial agreement as to any alteration of their property. In a consideration of whether the result is just and equitable “it is the justice and equity of the actual orders not of the percentage distribution which must be considered”: JEL & DDF (2001) FLC 93-075 at [142]. Nearly all of the value of the property which Mr Earlman will retain is superannuation. Superannuation interests are a different species of property because Mr Earlman will be unable to access his superannuation until retirement. Any just and equitable order should be properly calibrated to take into account that Mr Earlman will substantially only retain his superannuation after the property settlement order.
If the Court gives effect to the parties’ agreement as to the property and Ms Blazena retains ownership of the disputed Motor Vehicle 2 that would lead to a division of the asset pool 77.2%:22.8% in her favour. Standing back and considering the totality of the situation, a division of the asset pool whereby Ms Blazena retains the Town D property and Motor Vehicle 2, while Motor Vehicle 1 is transferred to Mr Earlman along with him retaining his superannuation, is just and equitable.
I will make orders accordingly.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Champion. Associate:
Dated: 27 July 2023
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