Hall and Collett

[2009] FamCA 402

FAMILY COURT OF AUSTRALIA

HALL & COLLETT [2009] FamCA 402

FAMILY LAW – PROPERTY SETTLEMENT – Superannuation

Family Law Act 1975 (Cth)

APPLICANT: Ms Hall

RESPONDENT: Mr Collett

FILE NUMBER: BRF 20128 of 2006

DATE DELIVERED: 20 May 2009

PLACE DELIVERED: Townsville, Qld.

PLACE HEARD: Townsville, Qld.

JUDGMENT OF: Monteith J

HEARING DATE: 5 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Fellows of Counsel

SOLICITOR FOR THE APPLICANT: Maddens Solicitors

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: In person

ORDERS

1. That within 28 days of the date of this Order the husband pay to the wife the sum of $40,000.

2. That, in the event the husband incurs bank fees or charges to comply with Order 1 then:

   (a)he shall provide to the wife copies of documents evidencing the bank charges or fees incurred and his payment of such bank fees or charge;

   (b)the wife shall, within 14 days of receipt of such documents pay to the husband that amount which is one-half of the bank fees or charges incurred by the husband.

3. That, pursuant to paragraph 90 MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interests of THE HUSBAND (Member Spouse) in the Defence Force Retirement and Death Benefits Scheme (DFRDB), THE WIFE (Non-Member Spouse) is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $190,463 and there shall be a corresponding reduction in the entitlement of the member to whom the splittable payment would have been made, but for these orders.

4. That the operative time from which Order 3 has effect is the beginning of the fourth business day after the day on which sealed copies of these Orders is served on the Trustee.

5. That having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the Fund.

6. That the Trustee of the Fund and the member spouse, in accordance with the obligations set out under the Family law Act 1975, the Family Law (Superannuation) Regulations 2001 and the Superannuation Industry (Supervision) Act and Regulations 1994, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of, and make payment to, the non member spouse in accordance with Order 3 of these Orders.

7. Liberty to apply.

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

FAMILY COURT OF AUSTRALIA  AT TOWNSVILLE

FILE NUMBER: BRF20128 of 2006

MS HALL

Applicant

And

MR COLLETT

Respondent

REASONS FOR JUDGMENT

Introduction

1. The wife filed an amended Application on 10 December 2008 seeking property orders although the husband had filed an amended Response on 8 October 2008 in which he not only sought property orders but also sought orders with respect to K, a child of the marriage, born in August 1991.  Consequently, on 5 March 2009, an amended amended Application was filed by the wife in which she sought orders in relation to the said child.

2. On 8 August 2008, a Family Report was prepared by Ms B which became Exhibit A in these proceedings.

3. On the morning of the trial which commenced 5 May 2009, it was ordered by consent that orders 1 to 10 of the respondent’s amended Response filed 6 October 2008 be dismissed and it was further ordered that the Independent Children’s Lawyer be discharged and I reserved the applicant wife’s right and the Independent Children’s Lawyer’s right to apply for costs against the respondent father until after judgment. 

4. Orders 1 to 10 of the amended Response dealt exclusively with children’s issues relating to the child, and on the morning of the trial, he abandoned all applications with respect to that child.

5. The Family Report became an Exhibit not for purpose of children’s issues but with respect to post-separation contributions by the wife and Section 75(2) factors to be taken into account with respect to the wife.

RELEVANT BACKGROUND

1. The husband was born in April 1961 and is presently 48 years of age.  The wife was born in July 1966 and is nearly 43 years of age.

2. They commenced a relationship when the husband was 19 and she was 15.  At that time, he was employed in the defence force and she was working as a receptionist.

3. They commenced cohabitation and married in September 1984 when she was 18 and he was 23.

4. There were four children of the marriage, X born in October 1987, currently 21 years of age, Y, born in July 1989, currently 19 years of age, his twin, R, and the subject child K, born in August 1991, currently 17 years of age but about to attain her majority.

5. The parties finally separated on 26 October 2003 and were divorced on 9 December 2005.

6. The wife trained between 1995 and 1996 to become an enrolled nurse and she is employed as an enrolled nurse on a part time basis.

7. She gave evidence that she was unable to work longer hours because she had to look after K who required a lot of supervision and K’s maternal grandmother, who has, in the past, assisted, has failing health and is now dependent on oxygen.

8. The maternal grandfather is 73 and her maternal grandmother is 70.

9. The husband is currently employed in the Australian Defence Force.  He swore in his affidavit that his salary was approximately $63,000 per annum but from Exhibit C in these proceedings which is a letter dated 18 February 2009 from the Australian Government Defence Force Retirement and Death Benefits Scheme, it shows that his current annual rate of pay is $75,231.  I accept that as being accurate.  It is the basis upon which, among other things, his entitlements under the scheme are calculated.

10. On the other hand, the wife deposes that she is earning approximately $33,800 gross per year.  Consequently, she is earning less than half of his salary.

11. The current arrangements for the care of the children are really irrelevant other than with respect to the youngest child.  The child lives with her mother and is likely to continue to do so for the rest of her mother’s life.  All of the other children are adults and I will deal with their various living arrangements when I come to deal with contributions and, in particular, post-separation contributions.

ORDERS SOUGHT BY THE PARTIES

1. To understand the orders sought by the parties, it is necessary to understand that there has already been a partial property settlement.

2. The wife deposes in paragraph 23 of her trial affidavit that:

   “at the date of separation, the matrimonial pool was as follows:

   Cash from sale of matrimonial home  $130,000.00

   Westpac Investment Fund in the husband’s name      $75,000.00

   Trade in Funds from the van  $2,500.00

   Furniture  $10,000.00

   Tools  $15,000.00

   Caravan  $500.00

   Husband’s car  $8,000.00

   Wife’s Magna motor vehicle  $8,000.00

   Wife’s superannuation  $9,607.76

   Total  $149,607.76”

3. She goes on to depose at paragraphs:-

   “24.The husband also had superannuation entitlements under the DFRDB and MSBS funds

   25.“When we separated we shared equally in the funds from the sale of the matrimonial home.  We also divided the furniture on an equal basis.

   26.[The husband] retained the tools and his car and I retained my Magna motor vehicle and caravan.”

4. Although there was initially some dispute about these matters, by the time the matter came to trial, the issues had been narrowed considerably.

5. Although in her amended amended Application filed 5 March 2009 she had sought that the net asset pool be split 60/40% between the wife and the husband, with a splitting order with respect to the Defence Force Retirement and Death Benefits Scheme, on the morning of the trial, Mr Fellows of Counsel, who appeared on behalf of the wife, sought that the net asset pool be split 50/50% between the wife and the husband, including the husband’s interest in the Defence Force Retirement and Death Benefits Scheme.

6. The husband, on the other hand, sought that within ten weeks, he pay the wife $15,000 and that an amount of $20,000 be allocated as required by s 90MT(1)(a) of the Family Law Act 1975 to the wife out of the husband’s interests in the DFRDB Scheme.

7. By the conclusion of the trial, in his final address, the husband, who appeared for himself, argued that I should make an order that the amount standing to the husband’s credit in the Westpac Account, namely $55,000, be split equally between the parties, but that the wife pay the withdrawal penalty which he asserted was 12.5 percent.

8. With respect to the DFRDB interest, he submitted that it should be split 20 percent to the wife and 80 percent to himself.

9. Embedded in the argument with respect to the Westpac Account is the fact that the husband had expended $24,600 from that fund post-separation and Mr Fellows argued that it was a premature distribution in the husband’s favour which should be added back.  I will deal with these matters later in my Judgment.

principles applicable to the matters before the court

1. The provisions of s79 of the Family Law Act define the Court’s power and obligations in determining applications for property settlement.  The Court has a discretion to make orders altering the interests of parties in property, provided the Court is satisfied that such orders are appropriate, just and equitable.

2. The Court is obliged by the provisions of s79(4) to take into account the following matters:

   a)the financial and non-financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them (sub-paragraphs (a) and (b));

   b)the contribution made by a party to the marriage to the welfare of the family, including any contribution made in the capacity of homemaker or parent (sub-paragraph (c));

   c)the effect of any proposed order upon the earning capacity of either party to the marriage (sub-paragraph (d));

   d)the matters referred to in s75(2) so far as they are relevant (sub-paragraph (e));

   e)any other order made under the Act affecting a party to a marriage or a child of the marriage (sub-paragraph (f));

   f)any child support payable (sub-paragraph (g)).

3. Accordingly, in assessing the entitlement of each of the parties to property settlement, there is both a retrospective element relating to the contributions of each of the parties and a prospective element relating to matters referred to in s75(2).

4. According to guidelines established through a series of leading decisions, the Court should determine the following matters on the evidence, that is:-

   ·    Firstly, the Court must determine the assets, liabilities and financial resources of the parties to the marriage

   ·    Secondly, the Court must consider all relevant contributions of each of the parties and, where possible, the Court should assign an entitlement of each of the parties arising as a result of those contributions.

   ·    Thirdly, the Court should then consider the prospective components of the claims of each of the parties arising as a result of the provisions of s75(2).  The Court should then identify what alteration, if any, should be made to the entitlement of each of the parties earlier assessed on account of contributions as is deemed necessary having regard to the s75(2) factors.

   · Fourthly, having determined and considered the entitlement of each of the parties to property settlement, the Court should consider whether there is, in addition, any entitlement to spousal maintenance, either periodic or lump sum, in accordance with the provisions of ss72 and 74 of the Family Law Act.

INCOME, PROPERTY, FINANCIAL RESOURCES AND LIABILITIES OF THE PARTIES

1. I have already dealt with the income of the parties.

2. I have also dealt with the property of the parties that was divided between them immediately after separation.

3. Consequently, there are only two items of property that I need to deal with.

4. The first is a valuation of the superannuation interest of the husband in relation to his interest held in the Defence Force Retirement and Death Benefits Scheme.

5. The Solicitors who then acted for the husband in September 2008 provided the wife with a valuation of the husband’s interest in the DFRDB Scheme by letter dated 25 September 2008 provided by S Company and calculated by Mr E in a total sum of $380,927.47.  That appears as annexure KH5 to the wife’s trial affidavit.  She had obtained her own valuation from P Company which was provided by letter dated 7 August 2007 and was annexed to her trial affidavit as KH4.  They calculated the husband’s interest at $384,493.49.

6. The wife’s seeks to rely on the later valuation provided by the husband’s solicitors in the amount of $380,927.47 and I propose to find that sum as the husband’s superannuation interest in the Defence Force Retirement and Death Benefits Scheme.

7. I have been provided with material which satisfies me that the trustee of the scheme has been provided with the form of orders that the wife seeks and that the Trustee is content with orders to be made in those terms and consequently, that the Trustee has been provided with procedural fairness.

8. The other item of property is the cash standing to the credit of the husband in the Westpac Lifetime Superannuation Service. 

9. The husband has annexed to his affidavit statements from this account which show that as at 31 December 2003, shortly after separation, the amount standing to his credit was $73,734.33.  However, by annexure B to his affidavit, it shows that as at 30 June 2007, that amount had grown to $79,692.61 but that as at 30 June 2008, it stood at $55,395.30, showing a reduction of $24,297.31.

10. In the documents exhibited to the husband’s affidavit, it appears that there was only one withdrawal up to 5 March 2008, being one sum in an amount of $18,322.47.  As the statement stops at 5 March 2008, the additional $5,974.84 must have been withdrawn between 19 February 2008 and 30 June 2008.

11. As I have said, the amount standing to the husband’s credit as at about the time of separation was $73,734.33 and had increased to $79,692.61 as at 30 June 2007, by what I assume to have been interest.

12. The husband admits that he has drawn on the Westpac account in an amount of $24,600 and he sets out at paragraph 80 how he accounts for the use of that money.

13. I set out hereunder paragraph 80 of his trial affidavit:

    “80.     Of the Westpac Superannuation account the monies I have redrawn in the sum of $24,600 have been applied as follows:-

    a.        I applied the sum of $1,400 for a Ford Laser KC which was [X’s] first car which included his registration costs;

    b.        I applied the sum of $2,100 for parts for [X’s] car after he had an accident;

    c.        I applied the sum of $600 for [R’s] first motor vehicle being a Ford Telstar 1989 model;

    d.        I applied $1,700 to [R’s] first car being a Ford Festiva 1996 model after the Telstar was too large for her to drive;

    e.        I applied the sum of $2,600 for Festiva parts for [R] after she had a car accident;

    f.         I applied the sum of $2,400 for [Y’s] first car being a Daewoo 1991 model;

    g.        I applied the sum of $700 which were parts for [Y’s] car after an accident;

    h.        The sum of $3,000 being expenses paid for the children to visit their mother in [central Queensland] from Darwin.  These costs included a car hire, excess baggage and spending money;

    i.         The sum of $2,000 was applied to the purchase of a second car for [X] being a Nissan Skyline;

    j.         I applied the sum of $3,000 paid for [the wife] to travel to Darwin from [central Queensland] to see her friend;

    k.        I applied the sum of $2,100 which were costs to uplift [R’s] and [Y’s] cars from Darwin to Sydney when they relocated;

    l.         I applied the sum of $3,000 after moving to Sydney in 2007 when I took the children to see the mother and [K] in [N] in Christmas and stayed in a motel for two weeks.”

14. As can be seen, they all amount to comparatively small amounts of money which he says he has expended on motor cars, motor car parts, travel expenses and the like.

15. This seems extraordinary having regard to the fact that the statement itself shows a withdrawal of $18,322.47 on 19 February 2008 after the proceedings were commenced.  No accounts or other documentary evidence was produced at the trial.

16. Mr Fellows argues that I should treat the withdrawals by the husband as premature distributions and I agree with his submission.

17. Consequently, I find that there should be an add-back of $24,600 to the amount standing to the credit of that account, at the present time, according to the husband, of $55,395.30.  Consequently, I find that that amount should be $79,995.30.  For the purpose of ease of calculations, I propose to find the sum in the amount of $80,000.

18. During the marriage, the husband was employed full time with the Defence Force and I will deal with this more fully under the heading of Contributions, but in about 2002, he took a voluntary early retirement and discharge after 23 years of service and was paid a lump sum.  For present purposes, this is only relevant in the sense that after a period of approximately 18 months, he rejoined the Defence Force and has been back in the Defence Force for a period of six or so years.  Since rejoining the Defence Force, he has joined a new superannuation scheme and his entitlements that have accrued are all post-separation entitlements.  The wife does not seek to make any claim with respect to those entitlements.

CONTRIBUTIONS

1. During the marriage, the husband was employed full time in the Australian Defence Force where he remains employed.  The wife was the primary carer for the children and essentially attended to their needs.

2. The wife, as I have previously indicated, had worked as a receptionist and later trained to become an enrolled nurse.  She ceased full time working when X was born and stayed off work for approximately six years, then went back on a casual basis until K went to school.  Since then she has worked part time because the husband was constantly away with his work.  She did the bulk of the housework and childcare duties during the period of cohabitation.  Although the husband was the principal financial provider, she also provided an income from her work as a nurse.

3. After separation, Y and K resided with the wife and R and X lived with the father.  R then came to live with the wife in June 2005 and Y went back to live with his father in December 2005.  R then went back to live with her father in March 2006.

4. The wife has always had the full time care of K who has high levels of intellectual impairment.  She will continue to have the care of K for the rest of her life.  K will always need supervision and could never be left alone.

5. In March 2009, Y has returned to live with the wife and recommenced his apprenticeship. 

6. I conclude that contributions throughout the marriage were equal, save that with respect to the husband’s superannuation, there was a 5-year period when he was employed by the Defence Force and contributing to his superannuation prior to cohabitation.  A small allowance for that should be made.

7. With respect to post-separation contributions, the children did seem to come and go between both households and the father did submit to me that he raised three children successfully.  The parties separated on 26 October 2007 and so, as at the date of separate, X was 16, Y and R were nearly 14 and K was nearly 12.

8. Although it can be said that the father probably made the greater contribution post separation to looking after X, Y and R until they attained their majority, the wife, on the other hand has had the full care of K who has been diagnosed as epileptic and also suffers from an intellectual impairment and the mother estimates that K’s current mental age is about 7 or 8 years.  The mother deposes that K is unable to live independently and has always been in her care.  She deposes that K is extremely dependent on her and extremely attached to her.  K’s daily routine is extremely important and when she gets up in the morning, the mother has to lay out the entire day for her, including what she will be doing at school, what they are having for tea and the like.  K apparently does not like being away from home.

1. Consequently, I have come to the conclusion that post separation contributions should be weighted in favour of the wife so as to account for the small initial contribution of the husband by way of superannuation.

SECTION 75(2) FACTORS

1. Mr Fellows argues that there are two factors that need to be taken into account in relation to s 75(2) factors.  The first is the significant disproportion in earning capacity between the husband and wife and secondly, the wife’s continuing obligation to support K.  Also, although the husband pays child support for K, that is about to cease.

2. Although K or her mother receive a small pension because of K’s disability, ss 75(2) and (3) require me to disregard these income tested benefits.

3. It is significant to refer to the Family Report in relation to the degree of care that the mother needs to provide for K.  I set out hereunder paragraphs 1, 40, 41, 42, 43, 44 and 55 of the Family Report which is Exhibit D to these proceedings:

   “1.This report has been prepared to assist the Court with the parenting arrangements for [K] (born […] August 1991).  [K] is intellectually impaired (functions at the age of a 7/8 year old) and has epilepsy as the result of an “aborted SIDS” (Sudden Infant Death Syndrome according to the mother) at approximately 4 months of age.  [K’s] seizure activity is primarily ‘petit mal’ (aka absence seizures) occurring three to five times weekly on average.  Her last ‘grand mal’ seizure took place approximately seven years ago.  An EEG in December 2006 was suspicious of underlying generalised epilepsy.

   …

   40.[K] (16 years, 11 months) was persuaded to participate in the interview when [the mother] explained that the report writer was “Mummy’s friend”.  [K] announced that school was “boring”, that she was in “grade 7 or 8”, “I love to cook” and named her favourite food, drink and television program.  She identified two social occasions when she would wear lipstick, and described the shoes and socks she was wearing; having previously announced that pink was her favourite colour.  [K] likes cartoons, in particular the ‘Simpson’s’ but volunteered “My Mum doesn’t like it; she thinks it’s awful”.

   41.[K] had difficulty remembering my name, at one point suggesting that it was ‘[…]’ and was uncertain of the names (ie “someone else”) of her friends, and where she lived.  She was also unable to recall the name of her mother’s friend, Mrs [D], who sat with her during the mother’s interview.  [K] could name the month of her birthday (August) but was unable to identify the day.

   42.Although [K] chatted freely and was able to identify ‘happy, sad and angry’ facial expressions on cards she had obvious difficulty in understanding the concept of contrasts.  When asked who is the oldest, [X] or [Y], [K] replied “not me I’m the youngest”.  She responded “I don’t know” when asked whether she or [R] was older.  However, [K] did acknowledge that she had enjoyed a visit with her sister earlier that day, stating “We’re laughing”.  [K] identified that she was “happy” with her mother and Mr [F].  She state “have fun – (he) takes out for dinner and to ice cream shop”.  [K] felt “sad” when her father did not phone and “happy” that he wanted to visit with her.

   43.[K] willingly printed her name on a piece of paper but when asked to draw her family responded “No, you do it”.  [K] identified the game of naughts and crosses, chose to have crosses and upon her turn printed an ‘X’ in a correct spot.  Nonetheless, she experienced great difficulty in continuing the game.  Her repeated response was “Your turn, your turn”.

   44.At times [K] was observed to be laughing to herself, and when she became aware of the various pictures of animals hanging on the wall, she began to imitate them.  It appeared as though she incorrectly identified them as a means of having a joke.  For example, she called the pig a sheep.  When [K] eventually caught sight of herself in the large glass windows she began to talk to her reflection (ie “hello mirror, hello mirror, how are you today?  Good today”).

   …

   55.During the Child Responsive Program ‘Intake and Assessment Interview’ (January 2008) [the mother] indicated that [K] did not understand the concept of time, money, space or distance, or consequences of certain actions.  For example, the mother indicated that at times [K] unknowingly uses touch inappropriately.  Documents (dated from May 1997) furnished to the ICL by [the mother] showed that [K] has a long recorded history of ongoing difficulties due to medical, intellectual and behavioural disabilities as well as vulnerability to ‘bullying’ in games at school.  “Her differences are greater as she gets older” said the mother.  Information gathered during the report interviews was consistent with these findings.  Moreover there was no data presented which suggested that [K] was able to act independent of some level of adult supervision. [K’s] current needs suggest that a realistic view of how to be helpful and protective of this young woman is required.”

4. Were it not for the fact that Mr Fellows advised me that he had been specifically instructed not to seek an uplift pursuant to section 75(2), I would have made an adjustment in the wife’s favour because of the matters set out in the Family Report and the mother’s continuing obligation to K.

ORDERS

1. Consequently, I propose to make the following orders that have been provided to me by Mr Fellows, which I consider to be just and equitable in the circumstances.

   1.That within 28 days of the date of this Order the husband pay to the wife the sum of $40,000.

   2.That, in the event the husband incurs bank fees or charges to comply with Order 1 then:

   (a)       he shall provide to the wife copies of documents evidencing the bank charges or fees incurred and his payment of such bank fees or charge;

   (b)      the wife shall, within 14 days of receipt of such documents pay to the husband that amount which is one-half of the bank fees or charges incurred by the husband.

   3.That, pursuant to paragraph 90 MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interests of THE HUSBAND (Member Spouse) in the Defence Force Retirement and Death Benefits Scheme (DFRDB), THE WIFE (Non-Member Spouse) is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $190,463 and there shall be a corresponding reduction in the entitlement of the member to whom the splittable payment would have been made, but for these orders.

   4.That the operative time from which Order 3 has effect is the beginning of the fourth business day after the day on which sealed copies of these Orders is served on the Trustee.

   5.That having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the Fund.

   6.That the Trustee of the Fund and the member spouse, in accordance with the obligations set out under the Family law Act 1975, the Family Law (Superannuation) Regulations 2001 and the Superannuation Industry (Supervision) Act and Regulations 1994, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of, and make payment to, the non member spouse in accordance with Order 3 of these Orders.

   7.        Liberty to apply.

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Monteith.

Associate: 

Date: