GAINSFORD & GAINSFORD
[2020] FCCA 394
•27 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GAINSFORD & GAINSFORD | [2020] FCCA 394 |
| Catchwords: FAMILY LAW – Property – long relationship and marriage – where wife made a large contribution early in relationship – where husband received a proportion of matrimonial property pool post separation after sale of property – where wife in receipt of Super Fund 1 pension – where both parties in poor health – Held husband receive 45% and wife receive 55% of matrimonial property pool and where Super Fund 1 pension be split 45% to husband and 55% to wife. |
| Legislation: Family Law Act 1975 (Cth), ss.79, 90SF, 90SM, Pt VIII |
| Cases cited: Cabbell & Cabbell [2009] FamCAFC 205 |
| Applicant: | MR GAINSFORD |
| Respondent: | MS GAINSFORD |
| File Number: | BRC 5303 of 2017 |
| Judgment of: | Judge L. Turner |
| Hearing dates: | 30 July 2019 and 31 July 2019 |
| Date of Last Submission: | 24 October 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 27 February 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms McLennan |
| Solicitors for the Applicant: | Andrew Burrows & Associates |
| Counsel for the Respondent: | Mr Cameron |
| Solicitors for the Respondent: | Neumann & Turnour Lawyers |
FINAL PROPERTY ORDERS
Within 60 days from the date hereof the wife pay to the husband the sum of $267,199 in exchange for which the husband shall do all such things necessary and sign all such documents as required to transfer at the wife’s expense all of his right title and interest in the house property at A Street, Suburb B in the State of Queensland more particularly described as Lot A (the A Street, Suburb B property).
In the event that the wife pays the husband the sum of $267,199 in accordance with Order (1) then contemporaneously with this payment the wife shall do all such things necessary and sign all such documents as required to:
(a)Transfer to the husband at the wife’s expense all of her right title and interest in her share portfolio of the C SHARES, D Shares and E Shares.
(b)Release from the solicitors trust account the sum of $45,497 that being the balance sale proceeds from the Suburb F property to the husband.
(c)Arrange for the 100% split of the wife’s interest in the Super Fund 2 to the husband in accordance with Order (3).
As to the superannuation split referred to in Order (2)(c):
(a)In accordance with section 90 XT(1)(b) Family Law Act 1975 (the Act) whenever a splittable payment within the meaning of section 90 XE of the Act becomes payable to or on behalf of Ms Gainsford from her interest in the Super Fund 2 (the fund) Mr Gainsford is entitled to be paid by the trustee of the fund 100% of the splittable payment and there shall be a corresponding reduction in the amount Mr Gainsford would be entitled to receive but for these orders.
(b)The operative time for Order (3)(a) is 4 business days after the service of the final orders on the trustee.
In the event that the wife does not pay to the husband the sum of $267,199 in accordance with Order (1) in the time frame as specified then:
(a)Order (2) and (3) will not take effect.
(b)As to the superannuation split:
(i)In accordance with section 90 XT(1)(b) Family Law Act 1975 (the Act) whenever a splittable payment within the meaning of section 90 XE of the Act becomes payable to or on behalf of Ms Gainsford from her interest in the Super Fund 2 (the fund) Mr Gainsford is entitled to be paid by the trustee of the fund 45% of the splittable payment and there shall be a corresponding reduction in the amount Ms Gainsford would be entitled to receive but for these orders.
(ii)The operative time for Order (4)(b)(i) is 4 business days after the service of the final orders on the trustee.
(c)The parties shall forthwith do all such things necessary and sign all such documents as required to list the A Street, Suburb B property for sale at a real estate agent as agreed between the parties (failing agreement as nominated by the Real Estate Institute of Queensland) at a price as nominated by the real estate agent.
(d)Should the A Street, Suburb B property not be sold within 3 months then the parties shall forthwith do all such things necessary and sign all such documents as required to auction the A Street, Suburb B property with an auctioneer as recommended by the real estate agent and at a reserve price as nominated by the auctioneer.
(e)Upon the sale of the A Street, Suburb B property the net proceeds of sale after all selling costs including commission, real estate agents fees, auctioneer fees, conveyancing fees, advertising expenses and any outstanding rates or utilities are to be distributed as follows:
(i)Sufficient monies to ensure the husband receives 45% of the total of the matrimonial property pool taking into account the husband retaining the Motor Vehicle G, the 45% split of the Super Fund 2 the husband’s Super Fund 3 and his bank accounts.
(ii)Sufficient monies to ensure the wife receives 55% of the total of the matrimonial property pool taking into account the wife retaining the monies in the solicitors trust account, the 55% split of the Super Fund 2, her share portfolio and her bank accounts.
In accordance with section 90 XT(1)(b) Family Law Act 1975 (the Act) whenever a splittable payment within the meaning of section 90 XE of the Act becomes payable to or on behalf of Ms Gainsford from her interest in the Super Fund 1, Mr Gainsford is entitled to be paid by the trustee of the Super Fund 1 45% of the fortnightly splittable payment and there shall be a corresponding reduction in the amount Ms Gainsford would be entitled to receive but for these Orders.
The operative time for Order (5) is 4 business days after the service of the final orders on the trustee.
That otherwise the husband retain for his sole use to the exclusion of the wife all items in his possession including:
(a)Motor Vehicle G
(b)Super Fund 3 superannuation.
(c)Bank accounts.
(d)Chattels and personal effects.
That otherwise the wife retain for her sole use to the exclusion of the husband all items in her possession including:
(a)Share portfolio (if not otherwise distributed to the husband in accordance with Order (2)).
(b)Her share of the Super Fund 2 (if not otherwise distributed to the husband in accordance with Order (2)).
(c)Monies from the solicitors trust account of $45,497 that being the balance sale proceeds from the Suburb F property (if not otherwise distributed to the husband in accordance with Order (2)). .
(d)Bank accounts.
(e)Chattels and personal effects.
That each party be responsible for their debts and any other liabilities in their name not otherwise dealt with in these orders and shall indemnify and keep the other party indemnified in respect to such debts and liabilities.
The party shall do all acts and things and execute all deeds and instruments to give effect to the terms hereof and if either party refuses or neglects to sign within 14 days of a written request any document necessary to give effect to these orders the Deputy Registrar is hereby appointed pursuant to section 106A Family Law Act 1975 to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to these orders.
That the parties have liberty to apply on short notice in the event of any difficulties in giving effect to these orders.
IT IS NOTED that publication of this judgment under the pseudonym Gainsford & Gainsford is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 5303 of 2017
| MR GAINSFORD |
Applicant
And
| MS GAINSFORD |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties after a long relationship spanning over 35 years (including a marriage of some 29 years) are in dispute as to the matrimonial property division.
Agreed orders
The parties were unable to reach any agreement on any issue prior to the final hearing.
Proposals
Husband
The husband is seeking that:
a)The A Street, Suburb B house property be sold with the net sale proceeds be divided 45% to the husband and 55% to the wife.
b)The wife’s pension interest in the Super Fund 1 be split 50% to the husband and 50% to the wife.
c)The wife’s interest in the Super Fund 1 (super plan) be split 50% to the husband and 50% to the wife.
d)The husband retain:
i)The Motor Vehicle G.
ii)His Super Fund 3 superannuation fund (Super Fund 3)).
iii)His bank accounts.
e)The wife retain:
i)Her share portfolio.
ii)Her bank accounts.
Wife
The wife is seeking that:
a)The Super Fund 1 pension be excluded from the property pool with the wife to receive full benefit of the pension.
b)The matrimonial property pool be divided 60% to the wife and 40% to the husband in such a way that the wife be able to retain the A Street, Suburb B property.
Issue
The issues for determination are:
a)The treatment of the Super Fund 1 pension.
b)The division of the matrimonial property pool and how such a division it to take place.
Evidence
In determining these issues regard has been had to:
a)The material as marked on the court file.
b)The oral evidence of the parties.
c)The exhibits.
d)The oral and written submissions.
e)Part VIII Family Act 1975.
f)Relevant authorities.
Both parties are legally represented.
For the husband the following witnesses were called and cross-examined:
a)The husband.
I find the husband to be a credible witness.
For the wife the following witnesses were called and cross-examined:
a)The wife.
b)Ms H (wife’s occupational therapist).
The wife presented as difficult, argumentative and evasive during cross-examination with an underlying and unrelenting agenda to paint the husband in as negative a light as possible.
The wife made uninvited comments and unfortunately her attitude both verbally and nonverbally interfered in her ability to answer questions directly and thoughtfully.
As a consequence there were inconsistencies in her evidence.
I find that in respect to these inconsistencies I must accept the evidence of the husband over that of the wife as I did not find the wife to be a credible witness on these issues.
I find Ms H to be a credible witness.
Findings of fact are made on the balance of probabilities having regard to the evidence and in what follows statements of fact constitute findings of fact.
Relevant history
The relevant history is as follows:
a)The husband (66) is retired and dependent upon a disability support pension.
b)The wife (61) years is retired and dependent upon a disability support pension and Super Fund 1 pension.
c)In 1977 the wife was injured in a motor vehicle accident.
d)In 1982 the husband suffered a cerebral aneurysm.
e)In 1982 the parties met when both resident at a rehabilitation centre dealing with their respective medical issues.
f)At the time of meeting the husband was going through a divorce and had two children to his previous wife.
g)Sometime in 1982/1983 the parties commenced a de facto relationship, living in a rental property.
h)In 1984 the wife received a compensation payout of some $38,000 from her motor vehicle accident.
i)In 1984 the parties purchased, using the compensation payout of $38,000, in the wife’s name only, the former matrimonial home at A Street, Suburb B (the A Street, Suburb B house property) for $59,500 with the balance funded by a mortgage.
j)In 1985 the parties borrowed a further $18,000 for renovations on the A Street, Suburb B property.
k)In 1987 the parties married.
l)In 1988 the parties changed the tenancy for the A Street, Suburb B property to a joint tenancy and refinanced the mortgage.
m)In 1992 the parties purchased in joint names land at Suburb F (Suburb F property) for $23,500 with the purchase secured by the A Street, Suburb B property.
n)In 1994 the husband was placed on a disability support pension as a consequence of his aneurysm.
o)In 1994 Ms J was born.
p)In 1995 the wife returned to full-time work after maternity leave.
q)In 1999 the parties borrowed $78,000 to construct a house on the City K property which was completed in or around 2000.
r)In the late 1990s the wife ceased driving due to her diminishing eyesight.
s)In 2002 the wife was declared legally blind.
t)In 2009 the husband received $22,000 compensation from the L Enquiry (due to abuse suffered as a child in a boy’s home) which was paid off the A Street, Suburb B house property mortgage.
u)In 2009 the wife received a redundancy payout of over $70,000 of which nearly $11,000 was paid towards the A Street, Suburb B property mortgage.
v)In 2010 the parties purchased a Motor Vehicle G using the husband’s superannuation funds.
w)In 2013 the husband retired and the parties moved to the Suburb F property.
x)In 2015 the parties returned to live at the A Street, Suburb B property.
y)In late 2016 the wife’s mother passed away.
z)In or around late 2016/early 2017 the parties separated under the one roof at the A Street, Suburb B property.
aa)In April 2017 the wife’s filed a domestic violence application (DVO) for the husband to vacate the A Street, Suburb B property, but the application was subsequently withdrawn with the husband providing an undertaking to be of good behaviour.
bb)In May 2017 the husband commenced property proceedings seeking orders whereby:
i)The A Street, Suburb B property be sold with the net proceeds divided 70% to the husband and 30% to the wife.
ii)Otherwise the parties retain everything in their possession including superannuation interests.
cc)In June 2017 the wife filed a second DVO application which was subsequently withdrawn by the wife.
dd)In June 2017 the wife filed her response seeking orders whereby:
i)The wife receive 70% and the husband received 30% of the matrimonial property pool.
ii)The wife retain the A Street, Suburb B property and pay money sufficient to give effect to a 70/30 division between the parties.
iii)If the wife is unable to raise the money, the A Street, Suburb B property be sold so that overall there be a division of 70/30 in favour of the wife.
ee)In September 2017 the parties attended court ordered mediation which resulted in the sale of the Suburb F property.
ff)In 2017 the wife received an inheritance from her mother’s estate of over $78,000.
gg)In late 2017 from the sale of the Suburb F property the husband received $200,000 and the wife received nearly $45,500.
hh)In late 2017 the husband moved out of the A Street, Suburb B property to live with a friend on Town M, with the wife remaining in occupation of the A Street, Suburb B property.
ii)In April 2018 parties divorced.
jj)In July 2019 the matter proceeded to a final hearing for two days.
As at the date of the final hearing:
a)The wife remains living at the A Street, Suburb B property.
b)The wife is in a long-term relationship with Mr N who lives in City O.
c)The husband is in share accommodation.
The law
In determining matrimonial property matters consideration must be had to Part VIII Family Law Act 1975.
A clear framework exists in determining property division.
The first question to be asked in accordance with Stanford v Stanford (2012) 293 ALR 70 at [79] and [80] is whether “it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”
If answered in the affirmative, then the matter is able to proceed to a property division, applying the various principles.
Consideration must be given as to whether a global or asset by asset approach is to be adopted.
Then the four step process is to be applied as discussed by the Full Court in Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 at [39] which can be summarised as follows:-
a)Identify and value, as at the date of the hearing, the parties’ property, liability and financial resources.
b)Identify and assess the parties’ contributions pursuant to Section 90SM Family Law Act.
c)Identify and assess the parties’ ongoing needs taking into account the relevant factors relevant under section 90SM and section 90SF.
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
Application of the law
Threshold step - The question to be considered as set out in Stanford
I find that this is a matter where it is just and equitable to determine a matrimonial property division based on the following:-
a)The parties were together for some 35 years having been married for over 29 years.
b)The parties have been separated since 2016/2017.
c)There is a property pool capable of division.
d)The parties agree that a division of the matrimonial property pool needs to occur to provide the parties with financial independence.
I find that as the question posed by Stanford v Stanford is in the affirmative it is therefore appropriate to proceed with a property division.
However before exploring the four step process in order to determine the percentage division there are two issues that need to be addressed, firstly how to treat the Super Fund 1 pension and secondly whether it is to be a global or asset by asset approach.
How is the Super Fund 1 pension to be treated?
The husband is seeking an equal split of the Super Fund 1 pension.
The wife is not agreeable to a split or to the Super Fund 1 pension value being included in the property pool.
Findings as to the treatment of the Super Fund 1 pension
The wife during her working career was in receipt of superannuation which was paid into the Super Fund 1 fund.
In 2013 the wife was approved to receive a fortnightly Super Fund 1 pension and the remainder of her Super Fund 1 superannuation was paid by the wife into her Super Fund 2.
The Super Fund 1 pension is not capable of being commuted to a lump sum, despite it being capable of being valued as a lump sum.
I therefore make the first finding that the Super Fund 1 pension is not a lump sum capable of being divided as property and therefore cannot be included as part of the matrimonial property pool capable of division.
Four questions arise from this finding.
The first question is how the pension is to be treated for the purposes of a matrimonial property division?
The Super Fund 1 pension has very similar traits to Defence Force Retirement and Death Benefits entitlements (DFRDB entitlements), with DFRDB entitlements being the subject of extensive scrutiny by the Full Court in recent years.
The Full Court in Semperton & Semperton [2012] FamCAFC 132 provides a useful guide as to the treatment of such entitlements at [75] to [78]:-.
“The proper approach in relation to DFRDB entitlements in property proceedings is not demonstrably clear from the legislative provisions in the Act and the Superannuation Regulations. The Superannuation Regulations in particular can be a source of confusion. While provisions are made for the valuation, there is no further provision or direction in the Act as to how those valued entitlements are then to be treated in the distribution of parties’ property. Are DFRDB entitlements to be treated the same as other superannuation assets, or differently? Certain questions about such entitlements have been considered and answered by the Full Court. It is clear from those authorities, which are set out below, that it is a matter of discretion for the judicial officer. That discretion is guided, however, by some qualification and statements of principle by the Full Court. Notwithstanding a clear requirement that such interests must be taken into account in the determination of property proceedings, and that a specific dollar value is to be assigned to the interest under the Superannuation Regulations, careful consideration must be given to the nature and characteristics of the interest.”
So what is the nature and characteristics of the interest of the wife in the Super Fund 1 pension?
The evidence supports that:-
a)The Super Fund 1 pension in the wife’s name was acquired by the wife through superannuation from her employment.
b)The interest held by the wife in the Super Fund 1 pension is in the payment phrase and is unable to be commuted or converted into a lump sum by the wife.
c)The Super Fund 1 pension was valued in 2017 at just over $650,000 but as of 2019 may be worth around $643,000.
d)The Super Fund 1 pension is paid to the wife on a fortnightly basis and according to the superannuation information provided by the P Superannuation on 15 January 2019 the wife receives an annual pension of $44,310 which equates to $850 per week.
e)The Super Fund 1 pension does not prevent the wife from receiving a means tested disability pension from the government.
f)The Super Fund 1 pension is subject to taxation and according to the evidence the wife pays $80 per week by way of income tax.
Coleman J in PJM & STM (2005) FLC 93-242 (where the matter had been remitted to His Honour after appeal for a re-exercise of discretion) expressed a view that if a DFRDB entitlement is in the payment phase and cannot be commuted then it is preferable to isolate the pension in its own pool.
This approach was considered to be the correct approach by the Full Court in Semperton at [89].
I therefore make the finding that the Super Fund 1 pension is to be treated separately to the rest of the matrimonial property pool.
The second question is how is the Super Fund 1 pension to be treated value wise?
In that regard I adopt the Full Court reasoning in Edwards and Edwards (2009) FLC 93-409 where it was held that although the DFRDB entitlement in that matter had a monetary value attributed to it, the trial judge had not erred in finding that, for the purposes of a property division, the preferred approach in prescribing a value to the husband’s DFRDB fund in the payment phase was what it provided to the husband in dollar terms each week.
I therefore make the finding that consideration must be given to the Super Fund 1 pension as to the value it brings to the wife on a weekly basis given that is a guaranteed source of income.
The third question is how can the Super Fund 1 pension be distributed between the parties for the purposes of a property division?
I find that a Super Fund 1 pension equates to an interest in a superannuation plan (section 90XD Family Law Act 1975) and therefore the court has power to make orders in respect to that pension (section 90 XS) including orders to transfer in whole or in part or split the pension (section 90 XT).
The valuer supports that the Super Fund 1 pension is of such a type that it is capable of being split.
Enquiries have already been made by the husband of the Super Fund 1 trustee who confirms that a splitting order can be made in respect to the Super Fund 1 pension.
I therefore make the finding that the Super Fund 1 pension is capable of being split between the husband and the wife.
The last question is at what stage of the four step approach is consideration to be given to the Super Fund 1 pension?
Care must be taken not to “double dip” which is what occurred in the first hearing of PJM & STM where the trial judge awarded a contribution based entitlement to the wife in respect to the DFRDB entitlement and then considered the DFRDB entitlement again when making a section 75(2) adjustment.
Coleman J in Cahill and Cahill (2006) FLC 93-253 at [81] and [82] adopted the following approach:-
“The Court is not persuaded that it is obliged to make a contribution entitlement finding in respect of the DFRDB figure thrown up by the formula. The Court is constrained under s.79(2) from doing things which are not just and equitable. In the Court’s view any contribution finding in relation to this notional value of the superannuation would be unjust to both parties, the only question being which party would be more unjustly treated. Accordingly, the Court does not propose to make a contribution finding in relation to this notional asset. It ought not however, be thought that so doing means that the DFRDB pension entitlement ceases to be relevant, nothing could be further from the truth. What it does mean is that, a guaranteed income stream, of a substantial order, will be treated within the context of s.75(2). It is income, it will always be income and it is a powerful s.75(2) factor.”
The approach to treat the DFRDB entitlement in the context of the third step which deals with factors under section 75(2) was supported by the Full Court in Semperton at [92].
In Carron & Laniga [2019] Fam CACF 115 at [39] it was held by the Full Court that the features of this type of pension “made it readily identifiable as a financial resource rather than an asset”.
The Full Court in Edwards at [68] stated:-
“Her Honour was clearly conscious of the need to have regard to the totality of the parties’ assets and their final positions’ before she made any decision with respect to the husband's DFRDB pension, and that she was required to ‘look at the consequences of the orders the parties ask I make and what would be the effect on the parties present and future financial position of the orders each seek’.
Semperton at [78] also expressed the need for consideration to be given to the making of just and equitable orders as required by section 79 when dealing with superannuation entitlements.
The last finding is that the appropriate step to deal with the Super Fund 1 pension is in the third step as to future needs and in the fourth step when considering the just and equity of the orders.
Global or asset by asset approach?
As to the remainder of the matrimonial property pool I find that it is appropriate that a global approach be adopted.
The four step approach in Hickey
Step 1 – Property pool
I find that the matrimonial property pool available for distribution is $1,105,413 consisting of the following:-
Non Superannuation Assets
$ Value
A Street, Suburb B property (joint)
850,000
Motor Vehicle G (husband)
12,000
C SHARES (wife)
830
D Shares (wife)
707
E Shares (wife)
2,095
Q Bank account – inheritance (wife)
22,274
Q Bank account (…22) (wife)
1,143
Q Bank account (…37) (wife)
1,759
CBA account – sale proceeds Suburb F property (husband)
61,377
Solicitors trust account – sale proceeds Suburb F property (wife)
45,497
Total non superannuation assets
$997,682
Superannuation assets
$ Value
Super Fund 3 (husband)
3,817
Super Fund 2 (wife)
103,914
Total superannuation assets
$107,731
TOTAL MATRIMONIAL PROPERTY POOL
$1,105,413
Conclusion on the matrimonial property pool
I find that the matrimonial property pool available for distribution is $1,105,413.
Step 2- Contributions
Initial contributions
When the parties commenced cohabitation in or around 1982 neither party had property or liabilities.
Conclusion
I therefore find that no adjustment is warranted in favour of either party based on initial contributions.
Contributions during the relationship
The husband submits that the parties contributed equally throughout the marriage taking into account the financial and non-financial contributions made by each of the parties ([31] husband’s written submissions).
The wife, disagrees stating an adjustment is to be made in her favour as the wife made greater financial contributions during the relationship through lump sum contributions, the ongoing application of her income towards living expenses and her superannuation entitlements ([44] wife’s written submissions).
As to financial contributions the evidence supports that during the relationship the husband:
a)In 1985 contributed $4000 from cashing in his R Life Insurance policy which was used towards the renovations of the A Street, Suburb B property.
b)Since 1994 was (and still is) in receipt of a disability support pension which was supplemented until his retirement in 2013 from his employment in the construction industry and odd jobs such as trades work. The husband acknowledges that he was not always employed due to health issues but that when he was employed his income was often higher than the wife’s income.
c)Received a victim compensation payment of $22,000 in 2009 from the “L Enquiry into Child Sexual Abuse” which was applied directly to the A Street, Suburb B property mortgage together with a further payment of $7000.
d)Bought in 2010 the Motor Vehicle G for $38,000 drawing down funds from his superannuation fund.
As to financial contributions the evidence supports that during the relationship the wife:
a)From 1983 to 2009 was employed full-time as a public servant as a consequence of that employment is now in receipt of the Super Fund 1 pension and has a small super plan fund.
b)In 1984 received a compensation payout of $38,070 which was used to acquire the A Street, Suburb B property, the major asset in the property pool.
c)In 2009 received a redundancy package of $70,000 which the wife submits was used to pay off debt and to discharge the mortgage (just over $10,000) over the A Street, Suburb B property but where the husband submits that the majority of the monies were not accounted for by the wife and paid into her sole account.
The wife submits that the contribution of the compensation payout which enabled the acquisition of the A Street, Suburb B property “must be looked at in the context of the use made of the property and it’s worth now in the context of the size of the overall property pool” and that “the wife’s contribution of that property has not been eroded over time and was not offset by the husband’s own contributions” ([48] wife’s written submissions).
The wife submits that the A Street, Suburb B property “was the ‘springboard’ for the parties to increase their financial worth both by improving the A Street, Suburb B property” and purchasing the Suburb F property ([49] wife’s written submissions).
The husband argues that due to the wife’s inability to drive, the husband provided greater non-financial contributions in his responsibilities towards Ms J and in running the household.
As to non-financial contributions the wife submits that “the parties made non-financial contributions to the conservation, improvement and preservation of properties at A Street, Suburb B and Suburb F” ([56] wife’s written submissions).
The husband submits that in respect to the renovations on the A Street, Suburb B property he was “an owner builder” where he performed the bulk of the physical labour and managed the trades ([42] husband’s written submissions).
The wife acknowledges that the husband “applied his manual labour and skill” towards improvements on the A Street, Suburb B property although such improvements did not meet building standards which may impact on the price of the A Street, Suburb B property before it was sold ([57] wife’s written submissions).
Conclusion
This was a long relationship of some 35 years including a marriage of some 29 years.
Early in the relationship the wife brought into the relationship the financial contribution of her compensation payout which enabled the parties to purchase the A Street, Suburb B property, with that property being used to acquire the Suburb F property.
The wife argues that this contribution entitles her to a larger division of the matrimonial property pool.
The Full Court in Cabbell & Cabbell [2009] FamCAFC 205 sets out a comprehensive summary of the treatment of initial contributions citing Pierce v Pierce (1999) FLC 92-844.
The Full Court dispels the notion of erosion stating that what is relevant is the “weight to be attached, in all the circumstances, to the initial contribution.”
The phrase “all the circumstances” encompasses all other contributions with the Full Court stressing the need for the trial Judges to “not only identify the relevant contributions but also to assess them.”
The Full Court supports the comments made in Williams & Williams [2007] FamCA 313 including that the trial Judge must give “recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.”
The Full Court concludes that ultimately it is in the discretion of the trial Judge taking into account the individual facts of a particular case in determining how to treat an initial contribution.
In Verley & Verley(No. 2) [2008] FamCA 326 Cronin J cautioned against a mathematical approach being adopted and in respect to long marriages noting that “the longer the marriage, the more likely it is that there will be later factors of significance which reduce the original contribution.”
I find that this early contribution of the compensation payout does not justify an adjustment being made in favour of the wife for contributions.
I make this finding based on the following:
a)This was a very long relationship.
b)Both parties contributed all they had financially and non-financially in acquiring the matrimonial property pool during this long relationship.
c)The husband put all of his financial lump sums such as compensation payouts, insurance payouts and superannuation cash out towards the acquisition preservation and maintenance of the property pool.
d)In considering the myriad of contributions, it would not be appropriate to isolate that one contribution made by the wife early in the relationship to support an adjustment in her favour.
I therefore find that an adjustment in favour of the wife for her early contribution is therefore not warranted.
Post separation contributions
Since separation the husband has had the financial benefit of:
a)Drawdowns from his Super Fund 3 superannuation of some $12,000, some of which was applied to a holiday for the husband with his daughter and some of which assisted his daughter in purchasing a car.
b)The sum of $200,000 from the sale proceeds of the Suburb F property, out of which the husband gifted $29,000 to his daughter, pay legal fees and living expenses and has of the date of the final hearing has $61,000 in his bank account (which forms part of the matrimonial property pool).
The wife submits that the $200,000 forms a partial property settlement and must be “taken into account and credited against any sum that he is to receive by way of property settlement” ([61] wife’s written submissions).
Since separation the wife has had the financial benefit of:
a)The sale proceeds from the S shares of $11,000.
b)In 2017 an inheritance from her mother’s estate of $79,800 of which $22,274 remains (which forms part of the matrimonial property pool) with the monies being utilised by the wife “for living expenses and legal fees” ([43] wife’s written submissions).
c)The sum of $45,497 from the sale proceeds of the Suburb F property of which the sum of $45,497 remains.
Since separation the wife has had the indirect financial benefit of full use and occupation of the A Street, Suburb B property.
Conclusion
I find that an adjustment is to be made in favour of the wife for 5% for post separation contributions.
I make this finding based on the following:
a)The husband has had the benefit of $200,000 partial property settlement of which some $61,000 remained as at the date of the final hearing.
b)Whilst under other circumstances given the size of the pool this might have equated to a larger adjustment in favour of the wife, this must be balanced against the financial benefits the wife has received directly from the sale of shares and her inheritance and more importantly directly from her sole use and occupation of the A Street, Suburb B property, whereby the husband had to make arrangements for his own housing.
Overall conclusion on contributions
The overall conclusion as to contributions is a 5% adjustment in favour of the wife.
Step 3 - Future needs
Age
The parties are of similar age; the husband is 65 and the wife is 60.
Conclusion
I find that this future need therefore does not impact on the percentages for the property division.
Employment
It is acknowledged by the parties that neither party has the capacity to be gainfully employed due to age and health issues.
Conclusion
I find that this future need therefore does not impact on the percentages for the property division.
Health
As to his health the husband says:
a)“Because the majority of my working life involved manual labour, my knees are worn out with arthritis causing me to walk with a noticeable limp. I also have disc disease in my back which causes me pain” ([51] husband’s January 2019 affidavit).
In her letter dated February 2019 Dr T GP noted the following as to the husband’s health:
a)The husband has been a patient since February 2018 at the U Medical Centre.
b)The husband had “and intracranial haemorrhage secondary to an intracranial aneurysm in 1982 and with a reluctant left side partial hemiparesis”.
c)“This affects his gait, balance and power, particularly in stairs and uneven ground”
d)“It also results in general muscle discomfort due to his asymmetrical gait, mainly his knees and lower back”
e)“The right side of his body may be expected to continue to suffer the side-effects of the burden of mobility imposed by the weaker left side”
f)“It continues to impact on his activities of daily living”
g)“It will continue to impact significantly in the future, a specially with self-care and maintaining independent living”
In his report dated July 2019 Mr V occupational therapist (Mr V) makes the following observations as to the husband’s health:
a)The husband “sustained an intracranial aneurysm in 1982 resulting in paralysis in the left side of his body and slurred speech… he advised that he made a slow recovery but still has residual weakness and loss of coordination to the left side of his torso and limbs”.
b)“His altered gate following the aneurysm contributed to the onset of lumbar spine pain in the 1990s and right knee pain in more recent years… he continues to rely on over-the-counter analgesic and anti-inflammatory medication to manage his lumbar spine and right knee pain symptoms”
c)“He has haemachromatosis which is monitored closely with his general practitioner. He said that he experienced a period of ‘dizzy spells’ early in 2019 and presently takes aspirin every 2nd day… He has asthma treated with Ventolin and Spiriva”
d)“He lives with a friend, aged in his 70s… He performed a large share of the house cleaning (3 to 4 hours a week), laundry (1 to 2 hours a week) grocery shopping (1 to 2 hours a week) and gardening tasks (up to 1 to 2 hours a week in summer)”
e)“He explained that he performs most manual tasks with his right upper limb due to the weakness and loss of coordination on his left side. He describes performing all tasks ‘very slowly, painfully and clumsily’ and describes feeling ‘exhausted’ after completing same”
f)“He enjoyed playing golf socially… He needs to hire a buggy to play 18 holes, ‘but I generally play up to 9, although it leaves me absolutely wrecked afterwards’”
g)“The lumbar spine and knee pain was most troublesome. He rated the pain intensity as to 10 at best and 8/10 when aggravated… Standing and walking for prolonged periods, driving distances, crouching and stooping to reach towards the ground and handling heavy items were most provocative. The heat and temperatures greater than about 33° contributed to the posterior head pain. He obtained some partial pain relief by taking regularly medication and varying his postures and activities”
h)The following functional restrictions were assessed:
i)“Occasional lifting and carrying capacity of less than 7 kg”
ii)“Lessened tolerances for prolonged standing, walking, sitting and driving”
iii)“Unable to form tasks requiring high levels of dynamic balance”
iv)“Reduced ability of activities requiring crouching and stooping to handle items at ground height”
v)“Unable to bear weight fully through left arm” for “crawling and pushing positions”.
vi)“Reduced ability of activities requiring reaching, grasping and fine motor control with the left arm”
i)“It would be reasonable for him to receive future commercial assistance with some of the house cleaning and heavy laundry and tasks in light of his left hemiparesis and right knee and lower back pain problem”
j)“He has no home modification requirements or home adaptive equipment needs”
As to her health the wife says:
a)The wife is legally blind.
b)“The wife’s vision impairment directly impacts her lifestyle, community access, functional capacities, employment opportunities and personal and domestic independence” ([64] wife’s written submissions).
c)In addition to the vision impairment “the wife was diagnosed with gastric lymphoma in 2009 and was treated with radiation… she does not know whether she will require further treatment in the future” ([65] wife’s written submissions)
In her report dated 22 January 2019 Ms H, occupational therapist (Ms H) makes the following observations as to the wife’s health:
a)The wife “is a severely vision impaired… lady who receives a disability support pension (blind) – her best corrected vision is categorised as right 6/18 and left 6 straight 60”.
b)“She has significant aberration associated with the history of laser surgery 20 years ago and myopic degeneration of her right eye. The combination of reduced central vision and aberration causes her difficulty with her general visual focus”
c)The wife “now uses a long cane for orientation and mobility assistance (she manages reasonably well information environments, but mobilising an unfamiliar environments courses her considerably more difficulty)”
d)The wife reports suffering from various pain:
i)Back and neck “constant pain in both shoulder blades, upper and lower back and neck”
ii)Abdomen “regular nausea and frequent diarrhoea”
iii)Head “chronic headaches and also migraines”
iv)Eyes “occasional pain in her eyes. Her vision is always poor… She has no effective lateral vision. Her upward vision is very restricted. She is effectively totally dependent on her very limited central vision. Bright light, as bright sunlight, tends to limit her vision more than at night time”
v)Other issues “She has fallen on the internal spiral stairs... she has fallen and broken toe... she has fallen on the street… she perseveres to walk but manages best on flat ground... when she negotiates an incline she has difficulty judging the gradient… she has similar difficulty negotiating stairs and gutters”
The wife contends that:
a)Whilst both parties “suffer health issues; the wife suffers far greater problems than the husband.… Whilst it is said that the husband is in need of home assistance, his evidence of trial is that he continues to do work around his friend’s property, and he plays golf each week. The husband adduced no evidence that his health issues are in fact productive of any financial impost upon him” ([37] husband’s written submissions).
b)“The wife’s needs are greater than the husband” ([36] husband’s written submissions).
c)“The wife’s living circumstances are significantly more complicated and expensive than the husband as a result of her vision impairment” ([66] wife’s written submissions).
Conclusion
I find that both parties have extensive health issues which negatively impact on their day to day health.
I further find that despite these health issues the parties continue to enjoy aspects of their retirement; for the husband he plays golf and gardens and for the wife she plays card games which takes her on overseas trips.
Lastly I find that because of the nature of their health issues that neither party is in a worse position than the other and therefore no adjustment is to be made as to this future need.
Income
The wife has available to her a weekly income of $1,221 made up as follows:
a)A guaranteed income stream from her Super Fund 1 pension of some $850 per week.
b)A means tested government disability pension which according to the wife’s last financial statement is $451 per week.
c)A taxation liability of $80 per week.
The husband’s main source of income is from the disability support pension which according to the husband’s last financial statement is $355 per week, with that amount to increase once the husband no longer has an interest in the A Street, Suburb B property.
There is no evidence before the court as to what the extent of the increase in the pension will be for the husband once his interest has been removed from the A Street, Suburb B property, although the evidence supports that the wife’s disability pension is some $100 more per week.
According to the information online for maximum payment of disability support pension available for a single person is $926 per fortnight; a weekly amount of $463.
In addition to the pension the husband deposes to receiving “a small amount of ‘cash in hand work’ I do for neighbours” ([48] husband’s January 2019 affidavit).
The husband is seeking for a 50/50 split of the Super Fund 1 pension.
The wife submits that a splitting order for the Super Fund 1 pension “will have a disproportionately significant impact upon the wife without any appreciable benefit necessarily accruing to the husband” and that “a splitting order in favour of the husband is likely to result in a reduction of the amount otherwise paid to him in the form of a means tested pension” ([35] wife’s written submissions).
There is no evidence before the court as to what the impact will be on the husband’s pension if he was in receipt of a split of the wife’s Super Fund 1 pension.
However based on the wife’s current position it appears that the husband would still be in receipt of a disability pension even if there is another source of income such as the Super Fund 1 pension (the wife is in receipt of both of these pensions).
Conclusion
I find that there is a significant discrepancy in the parties’ weekly income and that this discrepancy will continue into the future, even if the husband’s disability support pension was payable at the higher amount.
I find that such a discrepancy is able to be addressed by a split of the wife’s Super Fund 1 pension.
As to the extent of that split is an issue which will be addressed in the fourth and final step.
Overall conclusion on future needs
I find that the future needs do not warrant an adjustment of the matrimonial property pool but given the discrepancy in income it does warrant a split of the wife’s Super Fund 1 pension.
Step 4 - Just and equitable
Retention of A Street, Suburb B property
The first three steps support that a property adjustment be made in favour of the husband of 45% and in favour of the wife of 55%.
A division of 45% of the matrimonial property pool in favour of husband will result in the husband receiving assets totalling $497,436 ($1,105,413 x 45% = $497,436)
This will leave the wife with 55% of the matrimonial property pool totalling $607,977 ($1,105,413 x 65% = $607,977)
The wife is seeking to retain the main asset namely the A Street, Suburb B property worth $850,000 as part of her property pool.
The wife submits in support of her proposal:
a)The court “must take into account and accord significant weight to the practical consequences for the wife being compelled to relocate from her current residence… and how she could be expected to adjust to new living and community surroundings in circumstances where she is legally blind and has lived in the family home for 30 years and the home has been set up to cater for particular needs. So far as justice and equity can be done the court should fashion orders that will enable the wife to remain living in the family home” ([5] wife’s written submissions).
b)“If the wife is forced to move from the A Street, Suburb B property then she will incur further expenses over and above her existing expenses” ([37] wife’s written submissions).
c)“There is no evidence of there being any suitable, affordable, and appropriately modified residences in the area where the wife resides” ([14] wife’s written submissions).
d)“The fact the wife is familiar with the area and the home in which she lives means that her need for (and cost of) third-party services and assistance is less than would otherwise be” ([41] wife’s written submissions).
e)“Moreover she is afforded a degree of independence that is not likely to be the case if she is forced to relocate” ([41] wife’s written submissions).
f)“The wife deposes it would take her at least 3 to 5 years to familiarise herself with new surroundings if she was required to relocate” ([67] wife’s written submissions).
g)“The wife also deposes that her standard of living would be affected because she would feel vulnerable in a new environment” ([68] wife’s written submissions).
Ms H supports the wife remaining in the A Street, Suburb B property noting:
a)Although the wife “impressed as reasonably resilient I expect” the wife “will have considerable difficulty adapting after over 30 years to a different house, property and locality”.
b)“Orientation, familiarity and predictability within a familiar environment is critical to” the wife’s “safety given her with severe visual impairment… was observed to be comfortable and confident within her familiar home environment as well as her familiar locality”
c)“Any enforced relocation away from her familiar environments will be physically, practically and psychologically challenging… The implications will be far reaching… She has familiar neighbours, friends, parishioners, doctors, veterinarian, bank, post office, supermarket, availability of meals on wheels and other facilities where she is obviously well-known and recognised; she is familiar with and was observed to be safe negotiating the local railway crossing and various street crossings. Even in her well-known immediate and familiar locality she has suffered a few falls – I expect she would be at greater risk in an un-familiar location. Although” the wife “endeavours to be of a positive outlook, I expect any need to relocate from her familiar locality in which she copes well, despite her vision impairment, likely to be overwhelming”.
d)The wife “expected it to take her 5 years to ‘fully adjust to a new location’. I expect, given her advancing age, that she is likely to take at least several years to feel reasonably confident living alone in any new and unfamiliar environment”.
I find that whilst the wife is justified in her position to remain in the A Street, Suburb B property, what must be balanced is the need for the husband to have access to funds to enable the husband to obtain his own housing.
I find that a 45% division to the husband and a 55% division to the wife is just and equitable as, given the size of the pool, it provides each party with the means to rehouse.
But for this to occur, the wife, in maintaining her wish to remain at the A Street, Suburb B property needs to raise monies to pay out the husband.
Given the nature of the assets the minimum the wife would need to pay the husband is $267,199 if the husband was ordered to retain the following to make up his share of $497,436:
Motor Vehicle G
$12,000
C SHARES
$830
D Shares
$707
E Shares
$2,095
CBA account – sale proceeds Suburb F property
$61,377
Solicitors trust account – sale proceeds Suburb F property
$45,497
Super Fund 3
$3,817
Super Fund 2
$103,914
Payment by wife to husband
$267,199
Husband’s share of matrimonial property pool
$497,436
This requires the wife to:
a)Transfer her share portfolio to the husband.
b)Authorise the release of the trust account monies for the Suburb F property to the husband.
c)Transfer 100% interest in the wife’s Super Fund 2 to the husband.
d)Raise against the equity in the A Street, Suburb B property the sum of $267,199 to pay to the husband.
This will leave the wife with 55% of the matrimonial property pool totalling $607,977 ($1,105,413 x 65% = $497,436) that consisting of the following:-
A Street, Suburb B property
850,000
Q Bank account – inheritance
22,274
Q Bank account (…22)
1,143
Q Bank account (…37)
1,759
Total assets
875,176
Less payment to husband
267,199
Wife’s share of matrimonial property pool
$607,977
The wife will need time to investigate her ability to raise the monies, whether through her partner, family, friends or a mortgage.
If the wife cannot raise the monies then the reality is the A Street, Suburb B property will need to be sold.
Whilst this is far from ideal for the wife, there are options available for rehousing.
Unfortunately there was no evidence before the court as to what might be available in the A Street, Suburb B area but Ms H in cross-examination spoke of purpose built units for persons with visual disabilities.
Ms H in her report said:
a)The wife “will require a dwelling suitably configured to meet her safety needs – optimally she requires a low set house on flat ground security doors, externally located key safe, raised garden beds, conduction cooktop and nonslip surfaces in all wet areas and absence of horizontal or vertical barriers”
b)“She could access orientation and mobility assistance through vision Australia – a free service”
The wife has repeatedly demonstrated her ability to overcome adverse conditions her whole life including in more recent times relocating to and from Suburb F, travelling on trains and buses and travelling overseas.
If the wife is unable to raise the monies then there will be one more obstacle, which the wife will need to overcome and given her history is able to overcome – a move to another residence.
Whilst the wife may argue that this is not a just and equitable outcome, there is no other alternative, as it would not be just and equitable for the husband to receive any less than the 45% share to which he is entitled.
The last issue is the split of the Super Fund 1 pension.
At most each party is able to receive $463 per week from the disability support pension.
The wife is nearly at that amount.
The husband is not yet, because of his interest in the A Street, Suburb B property.
The wife receives a further $850 per week.
There is tax currently payable by the wife of $80 per week which may decrease in the event of the split.
I find that it is just and equitable to split the Super Fund 1 pension in the same percentage that the matrimonial property pool was divided, 45% to the husband and 55% to the wife.
This will provide to the parties similar incomes during their retirement.
Costs
No orders have been made as to costs.
If either party wish to make a cost application then the appropriate application is to be filed in accordance with the legislation.
I certify that the preceding one hundred and forty-eight (148) paragraphs are a true copy of the reasons for judgment of Judge L. Turner
Date: 27 February 2020
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Fiduciary Duty
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