FARMER & KILLEN

[2015] FamCA 794

FAMILY COURT OF AUSTRALIA

FARMER & KILLEN [2015] FamCA 794

FAMILY LAW – PROPERTY – Application by father seeking division of parties superannuation in circumstances where father is undischarged bankrupt – No orders were made for an adjustment of superannuation between the parties – father’s application dismissed

Family Law Act 1975 (Cth) Part VIIIAB

Stanford v Stanford [2012] HCA 52, (2012) 293 ALR 70

Bevan & Bevan (2013) FLC 93-545

APPLICANT: Mr Farmer

RESPONDENT: Ms Killen

INDEPENDENT CHILDREN’S LAWYER: Mr Fitzgerald

FILE NUMBER: HBC 206 of 2014

DATE DELIVERED: 19 August 2015

PLACE DELIVERED: Hobart

PLACE HEARD: Hobart

JUDGMENT OF: Benjamin J

HEARING DATE: 17, 18 & 19 August 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Farmer in person

COUNSEL FOR THE RESPONDENT: Ms Ryan

SOLICITOR FOR THE RESPONDENT: PWB Lawyers

Orders

PROPERTY

1. No orders be made for adjustment of the property between the parties.

2. All outstanding applications be dismissed.

3. All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.

IT IS DIRECTED

1. A copy of the reasons for the contested property orders be taken out and placed on the court file.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Farmer & Killen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT HOBART

FILE NUMBER: HBC 206 of 2014

Mr Farmer

Applicant

And

Ms Killen

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. These are property proceedings commenced by Mr Farmer (‘the father’), together with parenting proceedings, which I have dealt with earlier, and Ms Killen (‘the mother’).  The proceedings were commenced in the Federal Circuit Court in March 2014 and were listed for hearing today.  Neither of the parties seeks to disturb the non-superannuation property of the other party.  The father is an undischarged bankrupt and most of his property is the property of the Trustee and he would have needed the consent of the Court to enable property orders to be made in respect of the non-superannuation property. 

2. He does not seek that.  It is clear to me from the evidence before me that the trustee has been notified of these proceedings and given the circumstances, has determined not to involve themselves in the proceedings.  What the father seeks is 60 per cent of the superannuation held by the Trustees of the RBF superannuation fund for the mother that sum being approximately $36,000.  The mother seeks no adjustment of property and says there ought not to be an adjustment of property, given the particular circumstances of this case. 

BACKGROUND

1. In terms of the background, the father was born in 1965 and is aged 50.  The mother was born in 1981 and is aged 34. 

2. The parties concede that they were in a de facto relationship within the meaning ascribed to such a relationship under the Family Law Act 1975 (Cth) (‘the Act’). The mother says the relationship operated from August 2007 until 11 December 2012, a period of just under five years. The father says that they were in a de facto relationship from January 2008 until December 2012, a period closer to four years. In the context of this matter, that difference of some five or six months is of little consequence. The parties have two children, B, aged seven, and C, aged four but who turns five in about three or four weeks from today.

3. Earlier today I made consent orders that the children continue to live primarily with the mother.  They have been in her sole care since December 2012 and on the evidence, she was the primary carer of the children from their respective dates of birth until the date of separation.  The father has a child for whom he is responsible from a previous relationship and that child is aged 16.  In making this determination, I have assumed that he will continue to pay child support of in the vicinity of $100 per month for the next two years, 2017 being the year that his elder child attains the age of 18 years or completes his secondary education.

4. The father became a bankrupt on his own petition in May 2013.  There is evidence from the father that there was a creditor’s petition at that time and I take it that he remains an undischarged bankrupt.  In the months before the parties separated the father’s business and income struggled.  This arose out of clearly three reasons: one the loss of his daughter from a previous relationship, two the financial circumstances of his business and finally, the difficult circumstances relating to the breakdown of the marriage.  This is a case where there is no application for any adjustment of property, pursuant to the Kennan[1] principles. 

   [1] Kennon v Kennon (1997) FLC 92-756

5. Each of the parties relies upon their affidavits and statements of financial circumstances.  I have read those documents.  Much of the material contained in those documents relates to the parenting matters.  One of the father’s affidavits shows that he was earning reasonable income, at least in the years prior to separation.  He operated a business, apparently, through a family trust.  The father did not cross-examine the mother in relation to her material, however, I will treat the areas where they are in dispute as being in dispute and I make no criticism of the father for that, nor do I treat it as a concession that the mother’s evidence was unimpeached. 

6. It was a sensible and pragmatic decision by the mother’s solicitors to try and resolve the property without engaging these parties in further litigation, bearing in the mind the modest pool that’s involved and the geographic distance between the parties.  The law regarding the treatment of property has been clarified by the High Court following the decision of Stanford and Stanford[2]. The approach to be adopted by the Court must be satisfied that before making any order, it is just and equitable to do so. Then the Court must consider what orders, if any, it should make, having regard to s 79(4) of the Act. Bryant CJ and Thackray J noted in Bevan and Bevan [3]that Stanford (supra) :-

   … serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.

   [2] [2012] HCA 52, (2012) 293 ALR 70.

   [3] (2013) FLC 93-545.

7. The approach I will adopt in determining the division of property is, I believe, uncontentious.  Firstly, I will identify, in the context of the ordinary principles, the existing legal and equitable interests of the parties in the property.  I will consider whether, in the circumstances of the parties, it is appropriate and just and equitable for any order to be made, having regard to the relevant provisions of the act, this being a de facto property claim, and finally to consider and take into account any contribution of other matters as are relevant, having regard to Part VIIIAB of the act, and make such order as appropriate. 

8. It is a function of the Court to consider all of the relevant factors in the context of what is appropriate in all of the circumstances provided always that it is just and equitable to do so.  The first step for me to consider is whether, given all of the evidence before me, the Court ought to consider the adjustment of property, having regard to the direction given by the High Court in Stanford & Stanford (supra).  I am satisfied that I ought to consider a property order.  That does not necessarily mean I will make a property order but I need to consider doing so.  In terms of the legal and equitable interest in property, the only property to which the parties seek adjustment is that of the superannuation. 

9. It is an agreed fact that the father has superannuation totalling about $2,900.  That is set out in his financial statement.  It is an agreed fact that the mother has superannuation totalling some $60,284 with the RBF superannuation fund.  In a broader context, the mother has other property but of a very modest form.  That property is a motor vehicle which she values at $18,000, and some household contents of about $5,000.  The father has no property of any consequence, all of his substantial property having been taken by the Trustee in Bankruptcy.  As I said, it is only the superannuation to which I have to have regard.

10. To give itself jurisdiction, the Court has to be satisfied that the parties are in a de facto relationship or were in a de facto relationship.  Given the evidence of both parties, I am satisfied that they were and that their relationship subsisted for more than two years and that there are children of that relationship.  As a consequence, this Court is seized with the jurisdiction to make property orders.  The proceedings commenced in the Federal Circuit Court were commenced in 2014, which was within the two-year period to commence those proceedings and as such they were commenced in time. 

11. I am thus enabled to consider an adjustment of property. In terms of the financial contributions made directly or indirectly on behalf of the parties, pursuant to s 90SM(4)(a) of the Act, the mother had worked for many years prior to the relationship and had accumulated superannuation funds, on her evidence, of some $48,000. Added to those funds, since that time, are the funds for her few months work during the period when the parties were together, her 12 months part-time work after the birth of B and prior to the birth of C and, significantly, I presume, her work in earning income subsequent to the parties’ separation.

12. The father worked full-time during the course of the relationship and provided the bulk of income during that time.  Including that time, the father contributed the sum of about $23,000, being the net payment from the AMP, by way of lump sum superannuation paid to him in July of 2012, which was at the time when the parties were in high conflict and at a time when the financial circumstances of the father in particular and the parties in general was under immense pressure.

13. In terms of the household, the mother provided the role as a homemaker and parent.  She had the care of two children, both very young.  Each worked hard, although at times without any significant communication in their contributions, both direct and indirect, over that period of time, including the initial contributions of the father through the property of his earlier relationship and the father asserts in his affidavit, and it’s not challenged, that his father assisted by providing $8,000.  The father asserts, as I said earlier, that he helped with the children from time to time, including when he finished work early.  As such, as at the date of separation, the father had made, indirectly, some contributions to the superannuation fund of the mother.

14. Subsequent to separation, the father moved D Town in country Victoria.  This was about Christmas 2012, and he has lived there ever since.  He lives with his parents and earns about $30,000 per year doing part-time work for an employer, although the work sounds like its being undertaken as contract work.  The father says that there may be some more work available to him and, further, that he’s hoping he might find some work as a teacher.

15. He did not provide any financial support to the mother for the children from December 2012 to date.  It is likely that there will be a child support assessment some time in the relatively near future.  This order will not affect either party’s earning capacity.

16. In terms of the relevant factors under s 90SF(3) of the Act, as I said, the mother is aged 34. She has good health, although she suffers from time to time from anxiety and depression, and that was particularly pronounced at the time of separation, given the hostility between the parties at that time. The mother has that under control, and it is treated by her general practitioner.

17. The father is aged 50, and the type of work he does sometimes involves physical labour.  He asserts that he has difficulty with that, given some shoulder problems.  Although there is no expert evidence to that effect, I will treat it as a fact for the purpose of this determination.  He likewise suffers from depression and suffers from anxiety.

18. The father has an income of about $30,000 a year and clearly, on his evidence, believes that that will increase into the future.  He has options in terms of additional work, notwithstanding his shoulder problems, and he gave evidence that this may be available, that it may be that he can get less physically difficult work that would enable him to earn a better income teaching.

19. His financial resources are limited.  He has a very modest superannuation entitlement of about $2,900.  He lives at his parents’ home and works in the area around that home.  He has the physical and mental capacity to obtain gainful employment, notwithstanding his shoulder. 

20. The mother has the training and capacity to earn income in a school.  She has the care of two very young children, and although she works part time she relies upon the tax benefit and single parents benefit in terms of her support and that of the children.  At present, both parties are in romantic relationships, but none of those have developed into shared lives at this stage.  It is likely that the mother will enter into a shared life at some stage into the future.

21. As I said, the mother has the care and control of the two children of the relationship and will bear the lion’s share of parenting of those children into the future.  The father has a responsibility to see those children.  It will cost him reasonably significant amounts of money to travel at least once a month to Hobart to see the children, through travelling to the airport at Melbourne, parking, airfares, accommodation and travel when in Hobart.

22. The father also has the responsibility, for the next two years or slightly more, for the care of his elder child.  He otherwise has the obligation only to care for himself.  The mother has no obligation to support or care for any other persons apart from the children.

23. The mother is in receipt of the pension and the family allowance tax benefit to which I have alluded earlier.  It is likely that the standard of living of both parents has fallen, given the circumstances that befell them over the last two, three or four years.

24. The father is an undischarged bankrupt, and it is not clear to me as to what amount may be deducted from his income if he starts earning a strong income before he – his bankruptcy is discharged.  There is no ability of a creditor to claim any interest in the superannuation fund.  The de facto relationship was a relatively medium-term relationship, being somewhere less than five years and perhaps about four years.

25. These orders will not impact upon the property of the party; nor will it impact upon the creditors of the father following his bankruptcy.  This order will simply impact upon the superannuation benefits that the parties may each have available to them when they retire, which could be as short as 15 years for the father, or longer, and could be as short as 31 years for the mother.  Any child support payable by the father is, in all of the circumstances, likely to be quite modest.

26. What, then, should I do in adjusting the property, having regard to the contributions and the future needs?  If there was to be a split of the superannuation, it would, in all of the circumstances, be modest.  However, given those matters that I raised with the father and given the father’s ability to earn income into the future, although not for as long as the mother,  I do not intend to make any adjustment order in relation to the superannuation.

27. It will not affect the current assets of the parties.  It may affect them in their retirement, but I am satisfied that the father has the capacity to make up any modest shortfall in terms of his work over the next 15 or so years.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 19 August 2015.

Associate:     

Date:              19 August 2015