Fogarty and Fogarty

[2008] FamCA 1024

FAMILY COURT OF AUSTRALIA

FOGARTY & FOGARTY [2008] FamCA 1024

FAMILY LAW - PROPERTY SETTLEMENT – Adjustment for other matters – Just & equitable

Family Law Act 1975 (Cth) ss 75 & 79

In the Marriage of Hickey (2003) 30 Fam LR 355
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) 12 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
D & D [2006] FamCA 199; (2006) FLC 93-256

APPLICANT: Mr Fogarty

RESPONDENT: Ms Fogarty

FILE NUMBER: WOC 118 Of 2008

DATE DELIVERED: 21 November 2008

PLACE DELIVERED:	Sydney
PLACE HEARD:	Sydney

JUDGMENT OF: Judicial Registrar Loughnan

HEARING DATE: 19 November 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Ms P. Nash
SOLICITOR FOR THE APPLICANT:	Thakur & Associates

COUNSEL FOR THE RESPONDENT:	Mr D. Alexander
SOLICITOR FOR THE RESPONDENT:	Hilton King & Co

Orders

1. Within two months from the date hereof, or such further time as the parties agree in writing, the wife pay to the husband $59,000.

2. Forthwith upon receipt of that payment the husband shall do all things and sign all documents necessary to transfer his interest in the property situate at and known as B property, NSW to the wife.

3. Forthwith upon that transfer the wife shall discharge the mortgage secured on the property in favour of the Commonwealth Bank.

4. In the event that the wife does not comply with either Order 1 or Order 3 herein, Order 2 is vacated and each party shall take all necessary steps and execute all necessary documents to cause the property to be sold by private treaty, at the earliest possible date, at a price to be agreed on between the parties and failing such agreement to be determined by the President of the Real estate Institute or his nominee and the proceeds of the said sale to be disbursed as follows:

   (a)in payment of agents commission, advertising expenses and legal expenses of the sale;

   (b)in discharge of the mortgage to the Commonwealth Bank;

   (c)if Order 1 was complied with, the net balance be paid to the wife; or

   (d)if Order 1 was not complied with, the net balance be paid as to 79.9% to the wife and 21.1% to the husband.

5. The base amount allocated to the wife, the non-member spouse in these proceedings, out of the interest held by the husband in S Superannuation Fund is $62,504.50. Pursuant to paragraph 90MT(1)(a) of the Family Law Act 1975, whenever the Trustee of the S Superannuation Fund makes a splittable payment from the interest held by the husband the Trustee shall pay to the wife or her administrators, executors, beneficiaries, heirs or assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and there shall be a corresponding reduction in the entitlement the husband would have had in the S Superannuation Fund but for these Orders.

6. Order 5 has effect from the operative time which is two (2) weeks from the date when these Orders are served upon the Trustee.

7. Order 5 binds the Trustee of the S Superannuation Fund.

8. The husband and wife are declared to have the sole right title and interest in:

   8.1      Any chattels, goods, furnishings and other property which are, at the date hereof, in their possession respectively; and

   8.2      Any moneys, shares and debentures which stand in their sole name respectively at the date hereof.

9. In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court is appointed pursuant to Section 106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

10. The parties are at liberty to restore the proceedings in relation to the form of the orders or machinery issues within 14 days from the date hereof.

IT IS NOTED that publication of this judgment under the pseudonym Fogarty & Fogarty is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: WOC 118 OF 2008

MR FOGARTY

Applicant

And

MS FOGARTY

Respondent

REASONS FOR JUDGMENT

1. The parties’ marriage involved cohabitation for more than 25 years. They cannot agree on a settlement of their property.

Applications

1. The husband seeks orders in accordance with his Application for Final Orders filed 4 February 2008 as follows:

   1.That each party take all necessary steps and execute all necessary documents to cause the property situated at and known as [B] NSW to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement to be determined by the President of the Real estate Institute or his nominee and that the proceeds of the said sale be disbursed as follows:

   (a)Payment of agents commission and advertising expenses and legal expenses of the sale.

   (b)Discharge of the Mortgage to Commonwealth Bank.

   (c)The nett balance to be divided as to 55 percentum to the wife and 45 percentum to the husband.

   2.That the base amount allocated to [the wife] the non-member spouse in these proceedings out of the interest held by [the husband] in [S] Superannuation Fund is $129,130.00.

   3.That pursuant to paragraph 90MT(1)(a) Family Law Act 1975, whenever the Trustee of the [S] Superannuation Fund makes a splittable payment from the interest held by [the husband] the Trustee shall pay to [the wife] or his/her administrators, executors beneficiaries heirs or assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and there shall be a corresponding reduction in the entitlement [the husband] would have had in the [S] Superannuation Fund but for these Orders.

   4.That Orders 2 & 3 have effect from the operative time and the operative time shall be deemed to be two (2) weeks from the date when Orders are served upon the Trustee.

   5.That this Order bind the Trustee of the [S] Superannuation Fund.

   6.That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

   7.That the husband and wife be declared to have the sole right title and interest in:

   7.1Any chattels goods furnishings and other property which are, at the date hereof, in their possession respectively

   7.2Any moneys, shares debentures which stand in their sole name respectively at the date hereof.

   8.That the wife pay the husband’s costs of and incidental to these proceedings.

2. Notwithstanding they are the orders he formally seeks, given the drop in the value of the husband’s superannuation over the course of the proceedings, I am not confident that the husband presses the base amount specified in Order 2.

3. The wife seeks orders in terms of a minute of orders incorporated in her Case Outline documents as follows:

   1.         That the Husband’s Application be dismissed.

   2.That the Husband do all such acts and things and sign all such documents as may be required to transfer to the Wife all of his right title and interest in the property situate at and known as [B property].

   3.That the Wife pay to the Commonwealth Bank such sums as is required to discharge the mortgage to the Commonwealth Bank secured on the [B] property.

   4.That the Wife be declared solely entitled to retain free from any claim from the Husband:

   4.1      Her motor vehicle

   4.2      Her superannuation entitlements

   4.3      Furniture and effects in her possession 

   5.That the Husband be declared solely entitled to retain free from any claim from the Wife:

   5.1      His superannuation entitlements

   5.2      His motor vehicle

   5.3      Furniture and effects in his possession 

   6.         That unless otherwise specified in these Orders:

   6.1Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof and insurance policies are deemed to be in the possession of the beneficiary thereof.

   6.2Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.

Documents relied on

1. The parties rely on the following written evidence:

   Affidavit of Husband filed 5 September 2008

   Financial Statement of Husband filed 5 September 2008.

   Affidavit of the wife sworn 5 September 2008 and filed 9 September 2008

   Financial Statement of Wife sworn 5 September 2008 and filed 9 September 2008.

Issues for determination

1. The issues for determination are:

• Whether the adjustment in favour of the wife for the ‘other matters’ in section 79(4) should be 5% or 10%;

• Whether some of the wife’s settlement should be reflected in a splitting order of the husband’s superannuation and if so, what proportion?

Short History

1. The parties are both 44 years of age. They started to live together in 1982 and were married in October 2000. They separated on 28 May 2007.

Children

1. The parties have two adult children:

   Jwho was born in July 1983 and as at the date of the hearing was 25 years of age; and

   C who was born in January 1986 and as at the date of the hearing was 22 years of age.             

Background Facts

1. The parties first lived together in 1982 in rented accommodation.

2. The husband worked at K Company and the wife at R Company. They opened a joint savings account and the husband’s pay was deposited into that account.

3. In 1983 the wife left paid employment and the husband was also unemployed for 6 months.

4. J was born in July 1983.

5. In 1985 the husband started work at H Company.

6. C was born in July 1986.

7. In 1994 the parties bought E property for $122,000. They used joint savings and borrowed about $119,000 from Homefund.

8. The parties sold that property in 2000 and cleared $70,000. In May 2000 the parties bought B property for $225,000 using the $70,000 from the sale and they borrowed $165,000 from the Commonwealth Bank by way of mortgage.

9. The parties were married in October 2001.

10. In 2004 the parties renovated the B property, installing a swimming pool at a cost of $20,000 and undertook fencing and landscaping. The renovations were funded with shares the husband received from his employer and from joint savings. The husband and his father built a boundary fence over one week. The husband undertook the landscaping over four weeks.

11. In 2004 the wife started paid employment on a casual basis at a supermarket.

12. In 2006 the wife obtained a permanent position at the supermarket. She remains in that position.

13. The parties separated on 29 May 2007. The wife remained in the former matrimonial home and the husband moved to rented premises. The husband continued to service the mortgage. I understand that he initially made all of the payments but then reduced his contribution.

14. In May 2007 the husband bought a 1996 Ford Falcon motor vehicle for $5,100. The car was subsequently written off.

15. In June 2008 the husband bought a Proton Jumbuck motor vehicle for $20,000 with a loan of $20,000 from St George Bank.

Credit and Submissions

The evidence of the witnesses

1. There are no relevant factual disputes and so there was no cross-examination.

Submissions

1. It is submitted for the husband that the contributions were equal and that there should be a 5% adjustment to the wife under section 75(2). The parties are said to be in a similar position, both in paid employment, the same age, no health issues and no dependants. It is submitted that a 10% adjustment would be high in an acceptable range of outcomes and is not warranted here. The husband argues that the wife should take a proportionate part of the settlement in the form of a splitting order in respect of his superannuation. It is submitted that it would be unfair for the husband to be left with no significant non-superannuation assets.

2. The submissions on behalf of the wife are to the effect that contributions were equal and an adjustment of 10% is warranted for the other matters in section 79(4). The wife seeks that she retain more of the non-superannuation assets than that a percentage division would require and that there be no splitting order in relation to the husband’s superannuation. She seeks that order so as to assist her retain the former matrimonial home. She will otherwise have difficulty in rehousing and both parties will suffer because of the costs of sale of the B property. It is submitted that a higher percentage adjustment is appropriate in a small pool case. It is submitted that a reasonable standard of living in the circumstances is secure housing and unlike the husband, the wife’s best chance at that is to retain the home.

The approach in proceedings under section 79

1. The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]

   [1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in  In the Marriage of Hickey (2003) 30 Fam LR 355 at 370

The property of the parties at the date of the hearing

1. The Court is required to make a finding as to the property of the parties at the date of the hearing.

2. I was asked to take out of the list of assets, any reference to household contents. I assume the parties have reached an agreement about personalty which does not conflict with the style of orders they each seek in that regard.

3. The assets and liabilities are agreed as follows:

Assets	Value
B property	$390,000
Husband’s shares	$3,360
Husband’s Suzuki motor vehicle	$1,500
Husband’s paid legal fees	$6,179
Husband’s S Super	$218,175
Wife’s Mitsubishi Mirage motor vehicle	$5,000
Wife’s REST superannuation	$14,740
Wife’s paid legal fees	$4,000
Total	$642,954.00

Liabilities:

1. Pursuant to the parties’ agreement the relevant liability of the parties as at the date of the hearing is:

Liabilities	Amount
Mortgage on the B property	$109,000
$109,000.00

1. The net assets have a value of $533,954 ($642,954 - $109,000).

Financial Resources

1. The husband has accumulated leave entitlements (recreation and long service leave) which by reference to the husband’s hourly rate of pay, the wife values at in excess of $21,500. It is not argued that the entitlement represents an asset. There is no evidence of the terms of the husband’s employment on this issue but it is likely that the entitlement cannot be cashed out without the husband leaving his employment. It is likely that the entitlement will simply represent the right to be paid on days when he is absent from his workplace. This is a significant benefit. The husband’s leave entitlement is properly taken into account as a financial resource.

2. Otherwise, there is no evidence in relation to either party having a financial resource.

Contributions

1. The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[2]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[3].

Approach to the assessment of contributions

[2] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1

[3] In the Marriage of Shewring (1987) l2 Fam LR 139

1. As to whether the Court should assess contributions asset by asset or globally, the authorities have it that the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.

2. In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court opined that it is preferable for contributions to superannuation to be assessed separately from those made to other assets. However the Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:

   “… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”

3. Here the case has been argued on a global basis and I too will employ a global approach.

Contributions

1. The parties agree that contributions were equal. In the context of a long marriage one can understand the basis for that agreement but I will briefly mention the nature of their contributions.

Section 79(4)(a) Contributions

1. The parties bought a caravan at the commencement of their relationship and the husband owned a motor vehicle. They were each in paid employment during the relationship. The husband worked throughout the marriage except for 6 months in 1983. Since 1985 he has worked on a shift work basis, full-time for H Company and its successor S Company. The wife left paid employment when the children were born, undertook some house cleaning when they started school, started casual work in 2004 and returned to full-time work as a Shop Assistant in 2006. Although he was paying rent for his own accommodation, the husband supplemented the wife’s expenses since separation by contributing to the mortgage on the B property.

Section 79(4)(b) contributions

1. There is little evidence of non-financial contributions. A swimming pool was installed and fencing and landscaping were undertaken at the B property. The swimming pool and pool fencing were installed by contractors. The husband and his father did the boundary fencing over one week and the landscaping took the husband four weeks.

Section 79(4)(c) contributions

1. There are two children of the marriage.

2. The wife was a full-time homemaker and was largely responsible for the day to day arrangements for the children and the household tasks. The husband worked shift work for most of the marriage. The wife did the gardening and the husband, the lawnmowing.

3. I am satisfied that the wife was the primary care giver of the children and the main homemaker. That is not to say that the husband was not an interested and loving father but reflects the division of labour made between the parties.

Conclusion on Contribution

1. The parties agree that the contributions were equal and I so find.

The other matters in Section 79

1. Dealing with the matters identified in the legislation:

Section 79(4) (d)

1. Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no evidence about this.

Section 79(4)(e) - Section 75(2) Factors

1. The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (j) and (k).

(a)      the age and state of health of each of the parties;

1. First, as to the age and state of health of each of the parties. Each of the parties is 44 years of age. The wife saw her General Practitioner and was treated by one Psychologist until December 2007 and another from January 2008. She last saw her Psychologist in June 2008 but has monthly telephone contact with her. The wife experiences panic attacks and takes Lovan 20 on her GP’s prescription. Otherwise there is no evidence about the health of the parties.

(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;

1. The husband receives $1,515 per week made up of $1,500 in wages and $15 in share dividends. He lives alone. The husband’s fixed expenditure is as follows:

Expenses	Amount
Income tax	$450.00
Superannuation contributions – S Superannuation	$90.00
Rent	$220.00
Mortgage payments to CBA	$100.00
Insurance of some sort	$16.00
Motor vehicle registration	$15.00
Loan payments to St George Bank for car loan	$160.00
Credit card payments	$160.00
All other expenditure	$300.00
Total	$1511.00

1. The husband says he is tired of shift work and has been looking for employment with S Company and other employers which does not involve shift work. The husband thinks that taking up a role away from shift work will reduce his income. There is no suggestion that the husband is not currently exercising his earning capacity. There is no evidence of a medical reason for the change proposed. A voluntary reduction in income would result in the husband not exercising his earning capacity, but that is a matter for him.

2. The wife’s income is $560 per week made up of her salary as a Shop Assistant. She lives with the parties’ son C who earns $600 per week.

3. The wife’s expenses are as follows:

Expense	Amount
Income tax	$100.00
Mortgage	$100.00
Motor vehicle registration – Mitsubishi Mirage	$15.00
All other expenses	$345.00
Total	$560.00

1. Evidence about the wife’s assets and liabilities is set out earlier in these reasons.

2. It is not suggested that the wife is not fully exercising her earning capacity.

(c)       whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

1. The children are over 18 years.

(d)      commitments of each of the parties that are necessary to enable the party to support:

1. himself or herself; and

2. a child or another person that the party has a duty to maintain;

(e)       the responsibilities of either party to support any other person;

1. I have set out above the evidence about those commitments.

(f)       subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

1. any law of the Commonwealth, of a State or Territory or of another country; or

2. 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;

1. The parties have been able to generate superannuation interests.

(g)      where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;

1. There is little evidence in relation to the standard of living of the parties during the marriage.

(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;

1. This is not relevant.

(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; 

1. This is not relevant.

(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;

1. The wife’s role at home has allowed the husband to build a long career. That commitment has contributed to his current and future earning capacity and the benefits that brings with it.

(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;

1. The wife gave up paid employment upon the birth of the children. It is likely that the marriage adversely affected her earning capacity. She was denied the opportunities that come with an unbroken history of permanent employment, including the building of skills and experience that can lead to better paid employment and the other benefits of employment such as leave and superannuation.

(l)       the need to protect a party who wishes to continue that party's role as a parent;

1. This is not relevant.

(m)      if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;

1. There is no evidence about this issue.

(n)      the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;

(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

1. There is no order or child support assessment.

(o)      any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. There is nothing further requiring attention under this provision.

(p)      the terms of any financial agreement that is binding on the parties.

1. There was no binding agreement made between the parties.

Section 79(4)(f)

1. There are no relevant orders.

Section 79(4)(g)

1. There is a no child support assessment.

Conclusion

1. It is an agreed fact that there should be an adjustment to the wife by virtue of the other matters in section 79(4). The wife argues for a 10% adjustment for the “other matters” referred to above and the husband argues that it should be 5%.

2. The wife does not have unqualified good health but there is no evidence to link that to her income earning capacity. The most important matters that warrant an adjustment are:

ØThe difference in the parties’ incomes and earning capacities;

ØThe financial resource of the husband in the form of 739 hours of available long service and recreation leave;

ØThe fact that the wife’s role in the marriage has allowed the husband to build a career but has adversely impacted on her earning capacity.

1. It is not possible or appropriate to fully compensate the wife for the differences in the parties’ earning capacities. That difference is significant and is highly unlikely to be reduced. I should have regard to the dollar impact of an adjustment, not just to the percentages. Here there is a modest pool of assets and that warrants an adjustment at a higher percentage level. I will make an adjustment to the wife of 10%. In the context of this case that makes a difference between the parties of the order of $106,000.

Just and Equitable

1. Based on their contributions and the other matters in s 79 the appropriate division of property is 40% to the husband and 60% to the wife. I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.

2. The net assets have a value of $533,954. The outcome of that division would be that the husband would receive about $213,581.60 and the wife about $320,372.40.

3. The husband seeks a splitting order in relation to his superannuation. The wife opposes such an order or in the alternative, seeks that her settlement be reflected in non-superannuation assets to the greatest extent possible. Her ultimate aim is to retain the home.

4. I have been referred to Doherty & Doherty [2006] FamCA 199; (2006) FLC 93-256 where the Full Court did not interfere with a decision of a Federal Magistrate to leave one party with all of the superannuation and the entitlement of the other was met out of non-superannuation assets. I accept the submission on behalf of the husband that the distinguishing feature of that case was that the husband apparently had appropriate accommodation and demonstrated no immediate need for realisable assets. Here, although the husband demonstrated no immediate or specific need for a cash sum, he is living in rented premises. In Doherty the Full Court expressly avoided giving binding guidance on this issue at paragraph 23 as follows:

   23.      There will no doubt be cases in which close consideration and discussion of factors to be taken into account when deciding on division of assets, including superannuation, “in specie” is necessary.  Indeed, guidance from the Full Court may be highly desirable.  This is not the case for that discussion.

   but said at paragraph 24:

   24.      The decision about the mix of assets was a discretionary one.  In our view, in the absence of evidence in support of the orders that the husband sought and more particularly in the absence of submissions on his behalf to support the form of those orders, we consider that the option which her Honour exercised, having regard to what we earlier said of the principles applicable to this appeal, was well open to her.

5. In amending the Family Law Act 1975 to permit the splitting of superannuation payments the Parliament has indicated a preference for dealing with superannuation in that way. Over recent years Government policy has included encouragement to individuals to make better provision for self-funded retirement. Further, given that superannuation interests cannot normally be accessed before reaching a certain age and leaving the workforce, it can be unfair to require one party to retain a disproportionate amount of the superannuation interests and the other to retain a disproportionate amount of the non-superannuation assets.

6. On the other hand, the Court can take judicial notice of the fact that preferential treatment is afforded to assets and income in the form of superannuation after 60 years of age and that ameliorates the disadvantages of taking funds in the form of superannuation compared to accessible assets. The Court can also take judicial notice that of recent times many superannuation funds, including that of the husband, have made a loss.

7. In those circumstances, the Court would not lightly leave one party with all of the superannuation interests and the other with non-superannuation assets. The Court has discretion in relation to the proportions in which the parties retain superannuation interests. In exercising that discretion I take into account the following:

ØWhatever I do the wife is unlikely to be able to generate a self-funded retirement by way of superannuation.

ØWith his stronger earning capacity the husband is more likely to be able to make a proper provision for his retirement. There are bonuses that come with that capacity, such as the ability to make pre-tax contributions to superannuation through salary sacrifice. I gather from his Year to Date Maintenance form which is part of exhibit 1 that the husband does make some salary sacrifice to superannuation.

ØIt will be more difficult for the wife to secure appropriate accommodation than will be case for the husband. To labour the point, her financial position and employment history would not be as attractive to a lender as would those of the husband.

ØUnlike the husband, the wife identifies a specific need for non-superannuation assets. She has found that she can borrow a maximum of $130,000.

ØThere is potential benefit to both parties in the wife’s proposal because the parties will incur costs if they sell the property. That last matter was referred to by the Full Court in Doherty at paragraph 21 as follows:

21.      As counsel for the wife pointed out, a relevant matter also to be considered in relation to the sale of the former matrimonial home and militating against a sale, were the costs of sale which would mean a reduction in an already modest asset pool. 

1. In my view a splitting order is appropriate but I will only reflect half of the wife’s superannuation entitlement in the form of superannuation and will adjust the rest from the other assets. That will leave the husband with a modest cash sum as a foundation from which to secure accommodation.

2. The superannuation assets have a value of $232,915. The wife’s entitlement pursuant to section 79 as identified above is 60% or $139,749. She already has $14,740 in her own superannuation fund. To bring her to 60% she should receive $125,009. If she is to receive only one half of her entitlement in the form of a splitting order then the base amount for the splitting order will be $62,504.50. That will result in a reduction in the relevant payment to the husband.

3. An allowance must then be made in the division of non-superannuation assets for the difference between the wife’s entitlement to superannuation based on section 79(4) and the reduced amount I have identified. The non-superannuation assets have a net value of $301,039. 60% of that is $180,623.40. The wife’s superannuation split will be based on an amount that is about $62,504.50 less than her entitlement. In making an adjustment out of the non-superannuation assets, in my view it is not a matter of a dollar for dollar adjustment. There should be some discounting for the fact that the husband will likely wait many years to access all of his superannuation. I will allow an adjustment against the non-superannuation assets of $50,000 in the wife’s favour. Thus the wife will receive about $230,623.40 ($180,623.40 + $50,000) from the non-superannuation assets.

4. The wife has or has had the benefit of:

Assets	Value
Wife’s Mitsubishi Mirage motor vehicle	$5,000
Wife’s paid legal fees	$4,000
Total	$9,000.00

1. In order to bring her to 60% she would need to receive a further $221,623.40 from the remaining assets – the B property. For the purposes of these proceedings the property has a net value of $281,000 ($390,000 - $109,000). If she wants to retain the property she would need to pay the husband $59,376.60. I will round that figure down to $59,000. If the wife cannot make that payment the B property will be sold. In that event and so that the parties share in any difference between the net sale price and the agreed net value, the proceeds will be divided in the proportions 221,623:59,367 which I will express as 79.9% to the wife and 21.1% to the husband.

2. She will owe her legal fees and any other personal debts.

3. The husband has or will had had the benefit of:

Assets	Value
Husband’s shares	$3,360
Husband’s Suzuki motor vehicle	$1,500
Husband’s paid legal fees	$6,179
Total	$11,039.00

1. He will receive a payment of $59,000 from the wife or in default of that payment, 21.1% of the net proceeds of sale of the B property. He will owe his legal fees for these proceedings.

Conclusion under Section 79

1. The effect of the orders will be to give the wife the opportunity to buy out the husband’s interest in the B property. The payment of $59,000 appears to be beyond her reach given the need to refinance the existing mortgage. Therefore it is likely that the wife will be unable to make that payment. In that event the B property will be sold and the net proceeds after sale costs and adjustments and the discharge of the mortgage will be divided 79.9% to the wife and 21.1% to the husband. By dealing with that division in terms of percentage the parties will share the benefit or detriment of any difference between the ultimate net sale proceeds and the value arrived at for the purposes of these proceedings.

2. There will be a superannuation splitting order for the wife in relation to the husband’s superannuation based on an amount of $62,504.50. The parties will otherwise retain what they have and what they owe. In my view the outcome I have foreshadowed would be just and equitable pursuant to s 79.

3. In relation to the proposed splitting order I note that the trustee of the S Fund has been given notice of the form of orders sought on behalf of the husband.[4]

   [4] This confirmation was given by the husband’s solicitor on 9 September 2008.

4. The parties are at liberty to relist the matter in relation to the drafting of the orders and any other machinery issues within 14 days.

I certify that the preceding ninety two (92) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.

Associate: 

Date: 21 November 2008