Hampton and Hampton
[2007] FamCA 1308
•26 October 2007
FAMILY COURT OF AUSTRALIA
| HAMPTON & HAMPTON | [2007] FamCA 1308 |
| FAMILY LAW - PROPERTY SETTLEMENT – Contribution – just and equitable |
| Family Law Act 1975 (Cth) |
D & D (2006) FLC 93-256; [2006] FamCA 199
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Omacini (2005) 33 Fam LR 134
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
Mallett & Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage Pierce (1998) 24 Fam LR 377
| APPLICANT: | Mrs Hampton |
| RESPONDENT: | Mr Hampton |
| FILE NUMBER: | NCC | 98 | of | 2007 |
| DATE DELIVERED: | 26 October 2007 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | JR Loughnan |
| HEARING DATE: | 23 & 24 August 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr I. Duane |
SOLICITOR FOR THE APPLICANT: | Rankin Nathan Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms S. Christie |
SOLICITOR FOR THE RESPONDENT: | Armstrong Legal |
Orders
The parties do all acts and things and sign all documents necessary to cause the proceeds of sale of the property situate at and known as the Q property, held on trust by Dianna Burns Solicitors, to be divided as follows:
a. In payment of 68.8% to the wife; and
b. In payment of the balance then remaining to the husband.
Within 14 days of the date of these Orders the husband and wife do all acts and sign all documents necessary to appoint an agent on their behalf to cause the sale in such manner as agreed between them of the FJ Holden motor vehicle, registration number …, owned in the name of the husband and located at the C company in M, with the proceeds of that sale to be paid in the following manner and priority:
a. Payment of the reasonable costs and disbursement incurred with respect to the sale;
b. Payment of the reasonable fees owing to the C company;
c. 60% of the balance remaining thereafter to the wife.
d. The balance remaining thereafter to the husband.
In the event that the husband and wife cannot reach agreement with respect to the agent to be appointed and/or the method of sale pursuant to Order 2 within 14 days of the date of these Orders, the wife is to appoint the agent and will act as Attorney on behalf of the husband with respect to the sale.
The Court allocates, pursuant to s90MT(4) of the Family Law Act 1975, a base amount of $88,000 to the wife out of the husband’s interest in the Military Superannuation Fund (hereinafter referred to as “the fund”).
Pursuant to paragraph s90MT(1)(a) of the Act, whenever the trustee of the fund makes a splittable payment out of the husband’s interest in the fund, the Trustee shall:
(a) 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
(b) make a corresponding reduction in the entitlement the husband would have had in the fund but for this order.
Orders 4 and 5 herein have effect from the operative time which is seven (7) days after service of the final sealed orders upon the Trustee.
The Trustee of the fund shall do all such acts and things and sign all such documents as may be necessary so that, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, the Trustee can calculate the entitlement of, and make payment to, the wife in accordance with Order 4 and 5 herein.
The wife shall do all things necessary, including but not limited to, exercising her request pursuant to r7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the husband’s interest in the fund to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
Pursuant to r14F of the Family Law (Superannuation) Regulations2001, any payments from the husband’s superannuation interest made after the Trustee has rolled over or transferred the transferable benefits to a fund of the wife’s choosing are not splittable payments.
Subject to the above orders, the wife and husband are each otherwise entitled to retain sole legal and beneficial ownership to the exclusion of the other of all other items of property and personalty including motor vehicles, bank accounts, money, shares, jewellery, superannuation and any other personal effects presently in the possession of each of them respectively.
Subject to the above orders the wife and husband shall be and remain liable for any debts in her or his own name as at the date of these orders including their obligations to pay Capital Gains Tax and in this respect shall indemnify and hold harmless the other from any liability in relation thereto.
In the event that either party refuses or neglects to execute any document or documents whatsoever pursuant to these orders the Registrar of the Court will be appointed pursuant to Section 106A to execute such documents in the name of such party and do all acts and things necessary to give validity to the operation of the said document.
The operation of these orders is stayed for a period of 14 days and leave is granted to the parties to restore the proceedings to the list before Judicial Registrar Loughnan by arrangement with his associate in relation to the form of the orders.
IT IS NOTED that publication of this judgment under the pseudonym Hampton & Hampton is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: NCC 98 of 2007
| MRS HAMPTON |
Applicant
And
| MR HAMPTON |
Respondent
REASONS FOR JUDGMENT
After a marriage that involved the parties living together over a period spanning about 6 years, the parties cannot agree on a settlement of their property.
Applications
By her Amended Application for Final Orders filed 19 July 2007 the wife seeks the following orders:
…..
16. Within 14 days of the date of Orders being made the proceeds of sale of the former matrimonial home located at [Q] in the State of New South Wales, currently held on trust by Dianna Burns Solicitors be paid in the following manner and priority:
a.Three hundred and fifty thousand dollars ($350,000.00) to the Wife;
b.The balance remaining thereafter to the Husband.
17. Within 14 days of the date of these Orders the husband and wife must do all acts and sign all documents necessary to appoint an agent on their behalf to cause the sale in such manner as agreed between them of the FJ Holden motor vehicle owned in the name of the husband and located at [C Company in M], with the proceeds of that sale to be paid in the following manner and priority:
a.Payment of the reasonable costs and disbursement incurred with respect to the sale;
b.Payment of the reasonable fees owing to [the C Company];
c.75% of the balance remaining thereafter to the wife.
d.The balance remaining thereafter to the husband.
18. In the event that the husband and wife cannot reach agreement with respect to the agent to be appointed and/or the method of sale pursuant to Order 17 within 14 days of the date of these Orders, the wife is to appoint the agent and will act as Attorney on behalf of the husband with respect to the sale.
19. In accordance with section 90MT(1)(a) of the Family Law Act 1975 (“the Act”), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of [THE HUSBAND] from his interest in the Military Superannuation and Benefits Scheme (the MSB) the wife is entitled to be paid (by the Trustee of the MSB) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of one hundred thousand and fifty thousand dollars ($150,000.00) and there is a corresponding reduction in the amount [THE HUSBAND] would have had but for these Orders.
20. The operative time Order 24 is four (4) business days after service of these Orders on the Trustee.
21. Following compliance by the husband with the obligations imposed on him by these Orders, the wife indemnifies the husband against all debts, actions, suits, claims or demands in the name of the wife or in relation to any real or personal property held in the name of the wife or in relation to any business or company operated by or in the name of the wife.
22. Following compliance by the wife with any and all obligations imposed on her by these Orders, the husband indemnifies the wife against all debts, actions, suits, claims or demands in the name of the husband or in relation to any real or personal property held in the name of the husband or in relation to any business or company operated by or in the name of the husband.
23. Subject to these Orders, the husband and wife each retain sole ownership of any real or personal property, motor vehicles, shares, liquid funds in bank accounts, Superannuation or other items held in that parties’ respective possession, entitlement or control as at the date of these Orders.
24. If either party refuses or neglects to sign, within 14 days of a written request to do so any document necessary effect the terms of these Orders, the Registrar of the Newcastle Registry of the Family Court of Australia is hereby appointed pursuant to Section 106A of the Family Law Act to execute such documents on behalf of such party.
By a Minute of Orders relied on at the commencement of the hearing the husband seeks:
Minute of Orders
….
14.The proceeds of the sale of the property situate at and known as [the Q property] be divided as follows:
a. In payment of $220,000 to the wife
b. In payment of the balance then remaining to the husband.
15.That the husband and wife do all acts and things and sign all documents necessary to sell the VY Holden Commodore.
16.That from the proceeds of sale of the VY Holden Commodore the husband and wife pay all sums outstanding to [the C Company] and then divide the balance 57.5% to the wife, 42.5% to the husband.
17.That the Court allocate, as required by s90MT(4) of the Family Law Act 1975, a base amount of $50,000.00 to the Mother out of the Father’s interest in the Military Superannuation Fund (hereinafter referred to as “the fund”).
18.That, pursuant to paragraph s90MT(1)(a) of the Family Law Act 1975 whenever the trustee of the fund makes a splittable payment out of the Father’s interest in the fund, the Trustee shall:
(a) pay to the Mother, or her administrators, executors, beneficiaries, heirs or assigns, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b) make a corresponding reduction in the entitlement the Father would have had in the fund but for this order.
19.That Orders 4 and 5 herein have effect from the operative time as defined in Order7 herein.
20.That the operative time for Order 4 and 5 herein is seven (7) days after service of the final sealed orders upon the Trustee.
21.That the Trustee of the fund shall do all such acts and things and sign all such documents as may be necessary so that, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, the Trustee can calculate the entitlement of, and make payment to, the Father in accordance with Order 4 and 5 herein.
22.That the Mother shall do all things necessary, including but not limited to, exercising his request pursuant to r7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the Father’s interest in the fund to a fund of the Mother’s choosing [Fund unknown at this time] in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
23.That the Husband shall do all things necessary including but not limited to exercising her request pursuant to r7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the Father’s interest in the fund to a fund of the Mother’s choosing in accordance with r7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
24.That pursuant to r14F of the Family Law (Superannuation) Regulations 2001, any payments from the Father’s superannuation interest made after the Trustee has rolled over or transferred the transferable benefits to a fund of the Mother’s choosing are not splittable payments.
25.Subject to the above orders, the Father and the Mother are each otherwise entitled to retain sole legal and beneficial ownership to the exclusion of the other of all other items of property and personalty including motor vehicles, bank accounts, money, shares, jewellery, superannuation and any other personal effects presently in the possession of each of them respectively.
26.Subject to the above orders the Father and the Mother shall be and remain liable for any debts in his or her own name as at the date of these orders and in this respect shall indemnify and hold harmless the other from any liability in relation thereto.
27.In the event that either party refuses or neglects to execute any document or documents whatsoever pursuant to these orders the Registrar of the Court will be appointed pursuant to Section 106A to execute such documents in the name of such party and do all acts and things necessary to give validity to the operation of the said document.
Issues for determination
The issues for determination are:
Whether the amount of superannuation the husband had at the commencement of the relationship makes it appropriate to adopt a 2 pools approach;
Whether the husband’s deployment allowances and retention bonuses were a significant contribution to the equity in both pieces of real estate;
Whether the husband’s non economic contributions to the Q property were significant, increased the value of the property and saved the parties money;
Whether the husband has a need for accommodation appropriate to the children’s time with him;
What are the housing needs of the husband;
The extent of the wife’s capacity to service a mortgage;
The extent of the wife’s capacity to borrow;
What is the cost of purchasing a house for the wife and children;
What are the husband’s liabilities and assets;
What has the husband spent his income on since separation.
Short History
The wife and husband are 36 and 42 years of age respectively. They started to live together in November 1999, were married in August 2002 and separated either on 2 September 2005 or in February 2006.
Children
The parties have two children:
Nwho was born in November 2000 and as at the date of the hearing was 6 years of age; and
Kwho was born in May 2004 and as at the date of the hearing was 3 years of age.
Background Facts
The wife was previously married and that marriage was ended by divorce in 1999. The husband was married twice previously. From his first marriage he has a daughter who was born in March 1987. The wife encouraged the husband to spend time with his daughter but she spent very little time with the husband’s daughter.
The parties started dating in about March 1998. The wife lived in Canberra and the husband spent much of the year deployed with the Defence Force.
On 27 March 1999 the husband purchased a FJ Holden motor vehicle.
On 2 August 1999 the husband says the parties’ de facto relationship was recognised by his employer.
In September 1999 the parties purchased the B property in Queensland for $189,000. They borrowed $161,890 from Aussie Home Loans. The deposit of $25,000 came from the husband’s 15 year retention bonus.
The parties started living together in November 1999. At that time the wife was a Corporal employed within the Defence Force. She had joined the Defence Force in March 1993 and was discharged from permanent service in January 2002.
At the commencement of cohabitation the wife owned a house full of furniture, a 1995 Hyundai motor vehicle and about $10,000 in savings. As at June 1999 her interest with the Military Super and Benefits Scheme stood at $54,864.41.
At the commencement of cohabitation the husband’s interest with the Military Super and Benefits Scheme stood at about $150,000. ($147,737 as at June 1999) He had commenced with the Department of Defence in May 1984.
He also owned a Toyota Hilux motor vehicle that was sold in 1999 for $18,500.
The wife was posted to Malaysia and in December 1999 the parties travelled there to live. The husband was on paid leave until 7 February 2000 when he commenced leave without pay. He had paid employment in Malaysia from 25 March 2000 to 19 April 2000. He had a further period of leave without pay from 20 April 2000. The parties returned to Australia on 19 May 2000.
From 20 June to 10 July 2000 the husband was employed at a Military facility in Canberra. The parties returned to Malaysia from July to August 2000 to arrange their return to Australia.
The wife says that she was subject to harassment in the workplace in Malaysia, was repatriated to Australia and suffered post traumatic stress and depression.
The husband was employed in Canberra from 15 August 2000 to 25 February 2002.
The child N was born in November 2000.
The wife had 14 months maternity leave after N’s birth and thereafter worked three and later, four days a week.
In early 2001 the husband travelled to New Zealand for a Military exercise. In February 2001 the husband travelled to the USA & UK for work for 3 weeks.
In October 2001 the parties purchased the Q property in NSW for $189,000. They borrowed $166,500 from Aussie Mortgages. As to the deposit, the balance of the purchase price and the costs of purchase, the wife utilised her entitlement under the Defence Force Home Purchase Scheme of $12,500, her parents gave her $5,000 and she received a gift or inheritance from her grandmother’s estate of $10,000.
In November 2001 the husband commenced renovating the Q property.
In January 2002 the wife was discharged from the Defence Force and she commenced working 3 days per week.
From February 2002 to July 2003 the husband worked in Canberra at a Military facility. His shift cycle included 4-5 days work, 4-5 days home.
In June 2002 the wife commenced working 4 days per week.
On August 2002 the parties were married in Vanuatu.
The husband says that by July 2003 the Q property renovations were mostly completed.
From 28 July to 31 December 2003 the husband was deployed with the Military for 18 of the 22 weeks.
Between 1 January and 22 August 2004 the husband was deployed for 19 weeks. He was at home 24 hours a day for 10 weeks and he worked office hours for 1 week.
The child K was born in May 2004. The wife took maternity leave from March 2004 until August 2005.
From 28 August to 11 October 2004 the husband was with a Military Training Group. He was only deployed for 1 day in this period. He took annual leave from 11 to 25 October 2004. In November 2004 the husband was deployed for 12 days. In December 2004 he was deployed for 5 days. During December 2004 the parties and children commenced residing at R, NSW.
From 17 December 2004 to 10 January 2005 the husband had 24 days annual leave.
The wife concedes that by December 2004 the renovations on the Q property were substantially completed. Some doors had to be rehung and painted and some trim was missing from the skirting boards.
The parties separated on 2 September 2005. Shortly thereafter the wife and children lived in rented accommodation in the Port Stephens area.
The husband had leave from 14 to 24 October 2005 and did not see the children. He thinks he spent the leave in Sydney. It is his case that the wife refused to allow him to see the children.
In February 2006 the wife returned to paid employment.
The husband says that separation occurred on 24 February 2006.
On 14 January 2007 the parties sold the B property for $335,000. The proceeds were applied to discharge the mortgage on the Q property. The balance of $2,000 was divided equally.
On 24 January 2007 the wife and children moved into the home of the wife’s parents in the Port Stephens area.
In March 2007 the Q property was sold. Upon settlement in June 2007 the proceeds in the sum of $422,597.77 were placed in trust.
The wife is employed Monday to Wednesday each week with the Department of Defence. She works 8.30 am to 5.00 pm on Monday, 8.30 to 4.45pm on Tuesday and 8.30 am to 4.30 pm on Wednesday.
The child N is in Year 1 at S Primary School and attends after school care on Mondays, Tuesdays and Wednesdays. The child K attends Day Care on Monday, Tuesday, Wednesday and Thursday of each week.
On the last day of the hearing (24 August 2007) final parenting orders were made in terms of an agreement between the parties and the effect of the resultant living arrangements is that the children will live with the wife and will generally spend time with the husband:
a)Every third weekend during school term from the conclusion of school on Friday to 4.00 pm Sunday;
b)Every second Easter from 11.00 am Good Friday to 5.00 pm Easter Monday;
c)For one week of the March/April and July school holiday; and
d)About two weeks in the Christmas school holidays.
The agreement notes that, if the husband is deployed, the parties will use their best endeavours to provide the children with time with him immediately before and after the deployment.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties.
It transpired over the course of the hearing that there are very few disputed factual issues that will have any significance for the outcome of the proceedings.
The wife was a good witness. She gave clear responses and was not shaken in the thrust of her testimony. She made concessions in favour of the husband when asked but did not volunteer any.
The husband too was a good witness. He made few concessions in favour of the wife, only when they were sought from him and grudgingly.
Submissions
By the conclusion of the oral evidence learned counsel for the parties had settled an agreed list of assets and liabilities. There was no agreement about the value of a FJ Holden but it was agreed that it would be sold, the costs of restoration paid out and the net proceeds divided between the parties. There was no significant demur from a proposal that those proceeds be distributed in the same proportions as will apply to the other non-superannuation assets.
There was no agreement about the inclusion of paid legal fees as notional assets.
It is submitted on behalf of the wife that she should receive 65% overall based on her contributions slightly exceeding those made by the husband and an adjustment to her by reference to the matters set out in section 75(2). The latter adjustment should be “not less than 10% but could be in the range 15% – 20%. The main issue in the case is said to be the extent to which the wife’s settlement is divided between superannuation and non-superannuation interests. The wife seeks an order to the effect that the wife receive $350,000 of the $422,597 that represents the net proceeds of the sale of the former matrimonial home. That would leave the husband with about $72,597 from that source and the personalty already held by him.
It is submitted that there is precedent for one party to take little or no part of his or her settlement in the form of superannuation in D & D (2006) FLC 93-256; [2006] FamCA 199. That was a decision of the Full Court of this Court (sitting as a bench of three judges) dealing with an appeal from a decision of a Federal Magistrate. Although the decision was published, the Full Court noted that it was not an appropriate vehicle for guidelines from the Full Court in relation to the mix of superannuation and non-superannuation assets settled on parties. It also noted that the Federal Magistrate was neither presented with evidence nor submissions on behalf of the appellant husband in support of the mix of superannuation and non-superannuation assets that he sought at first instance. The latter circumstance does not apply in the proceedings before me.
I accept that I am permitted to express the orders in the form sought by the wife. In other words, in giving effect to the settlement of property identified by me by reference to the components of section 79(4), I have the discretion to apportion the superannuation and non-superannuation components in any way, including, by leaving most or all of the superannuation entitlement with one party.
The written submissions made on behalf of the wife are as follows:
CONTRIBUTIONS
This is a marriage involving cohabitation of about 6 years with the parties commencing cohabitation about 8 years ago. There are two children aged 6 and 3 who live with the wife.
The husband was required to pay child support throughout the relationship to his daughter for a previous marriage.
When the parties commenced cohabitation the wife contributed:-
A household full of furniture
1995 Hyundai Excel $13,500.00
Savings DCU $10,000.00
Superannuation $40,000.00
Total: $63,500.00
At that stage the husband contributed:-
Minimal personal items
Toyota Hi Lux $18,000.00
Superannuation $147,737.00
Total: $165,737.00
During the majority of the relationship each of the parties worked in paid employment and contributed their earnings to the marriage.
In November 2001 the wife contributed:-
Wife’s entitlement to Defence Force Home Purchase Scheme $12,500.00
Gift to wife from her parents $5,000.00
Gift to wife for inheritance from wife’s grandmother $10,000.00
Total: $27,500.00
During the relationship the wife was the primary homemaker and parent to the parties two children [N] born […] November 2000 and [K] born […] May 2004.
The wife’s contribution in those capacities is worthy of significant weight having regard to:-
(a)The husband’s significant absences.
(b)Domestic violence.
(c)The difficulties arising from the home in which the wife and children lived being in renovation from 2001 to 2004.
The wife made a non financial contribution both herself and indirectly by her father’s assistance in renovations to [the Q property] from 2001 to 2004.
The husband made a non-financial contribution by way of assisting in renovations which were preparatory work for work which was completed by trade contractors.
The wife was significantly involved in landscaping and gardening work whilst the husband was deployed.
The wife has made a significantly greater contribution post separation by reason of her care of the children for significant periods without assistance from the husband.
Contributions overall arguably favour the wife slightly
Section 79(4)(e)
The proposed orders will allow the husband to continue to earn significantly greater than the wife who has allowed the husband to develop his career. The wife’s career has been limited by her role within the marriage as a primary homemaker and parent. That role continuing in the future.
Section 79(4)(e)
The matters referred to in Section 75(2) so far as they are relevant addressed below.
Section 79(4)(f)
Not relevant.
Section 79(4)(g)
The husband is liable to pay child support. There is some suggestion that the child support is in arrears but the assessment seems to be in the vicinity of $300.00 per week or $150.00 per child per week.
Section 75(2) factors
(a)Both of the parties are young, the husband 43, the wife 36 and both enjoy good health.
(b)The husband has a significantly greater income and capacity for employment.
(c)The wife will have the children continuing to live with her for many years into the future given that [N] is aged 6 and [K] is aged 3.
There seems to be a risk that the husband will not continue his time with the children each third weekend.
(d)The wife has commitments to support herself and the children.
The published research including Lovering & Lee is a guide to the sorts of costs likely to be involved in caring for the children. The wife’s costs of caring for herself at present are as detailed in her financial statement.
The wife wishes to rehouse herself and the children and a particularly important matter is the wife’s limited capacity to borrow in order to purchase satisfactory accommodation for herself and the children.
The husband is living in a de facto relationship with a [Ms L] who also has a substantial income and earning capacity and is also in the Military Forces.
Both the husband and his partner have substantial entitlements over and above their wage and in particular have substantial assistance in their housing needs.
The husband has a substantial excess of his income over his expenses.
(e) The parties are responsible to support the children. They have no other responsibility to support any other person.
(f) Neither of the parties is presently entitled to a pension however both of them and in particular the husband have a growing entitlement to an election to a pension payment by virtue of the Superannuation membership.
(g) The most pressing need for the wife and the children is for a house that will allow a standard of living that is in all the circumstances reasonable for the wife and children given the type of employment that the husband has had in the past and its housing needs.
(h) There is no application for spousal maintenance.
(ha) Not relevant.
(j) Whilst there is no application for maintenance the matters referred to above are relevant.
(k) The same comments apply.
(l) The wife wishes to continue to be the parent with whom the children live and has a need for housing that needs to be catered for in order to protect the wife’s wishes to continue in her role as residence parent. The wife needs access to sufficient liquid funds to purchase a house given her limited borrowing capacity on her current care arrangements.
(m) The husband is cohabiting with his de facto wife who has a substantial income. Other details of her financial circumstances are not known.
(n) (i) The terms of the property order proposed are relevant here.
(ii) There is no bankruptcy issue.
(na) The matters referred to above are repeated.
(o) The wife made a limited contribution to the care of the husband’s child from his earlier marriage.
On behalf of the husband the written submissions were as follows:
Contribution based entitlement
Financial contributions
The husband had been a member of the Defence Force Superannuation Fund for fifteen (15) prior to the relationship.
The husband had approximately $150,000 in superannuation entitlements at the commencement of the relationship.
The husband contributed the entire proceeds of his retention bonus (to which he became entitled in the tax year prior to cohabitation) to the acquisition of the Queensland property. He also contributed his Toyota Hilux (about $18,500) (initial contribution). The wife contributed the proceeds of sale of her motor vehicle (about $10,000).
The husband made a significant financial contribution through his salary and wages and his retention bonuses (payable on the basis of service and retention).
Non-financial contributions
The husband made significant non-financial contributions to the parties’ property by his own labour, both improving the value of the property and saving the parties money.
The husband was (unless it was dangerous) often accompanied by the parties’ son [N] while he completed work on the home.
The husband when at home undertook domestic tasks on behalf of the parties and the children.
The husband when home undertook parenting tasks for the children.
The husband’s records indicate that he was home much more frequently than the wife’s affidavit evidence would allow.
The husband was at times required to organise his work to provide additional support to his wife.
Contributions – conclusions
The Court would assess the contributions to superannuation separately from those to non-superannuation assets following the dicta in Coghlan (2005) 33 Fam LR 414 at 429.
Superannuation assets
The husband would need to make an allowance to the wife from his superannuation acquired during the marriage to recognise her indirect contributions to his superannuation (offset to some degree by his indirect contributions to her superannuation).
Non-superannuation assets
Having regard to the above, but particularly to:
1.Initial contributions;
2.Retention bonuses;
3.Renovations undertaken by husband’s personal exertion.
the contribution based entitlement would be 55-60% in favour of the husband.
Section 75(2) matters
There is not a significant income disparity when the Court considers:
(a)that the wife works part-time (but has the capacity to work full-time);
(b)that the husband pays child support as assessed;
(c)Because after payment of child support the husband has about $1,267 before tax and the wife $1,012.
The husband is sharing only rent expenses with his girlfriend. The wife is sharing expenses with her parents.
The husband is paying child support as assessed.
Husband is about 6 years older than the wife.
The Court would make an adjustment of 10% of the assets in favour of the wife (the superannuation having already been the subject of adjustment).
Authorities
Coghlan (2005) stated at 33 Fam LR 414
Pierce (1998) 24 Fam LR 377
The approach in proceedings under section 79
The case law reveals that a permissible approach to the determination of an application brought pursuant to the provisions of s 79 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
The Court is required to make a finding as to the property of the parties at the date of the hearing. There are circumstances which the Court has found in other cases, to have justified the inclusion of property that no longer exists, in the pool of property for settlement. Similarly the Court has sometimes found that debts that do exist should not be included in the list that goes to make up the net pool of assets. In In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
The issue here relates to legal fees paid by the parties:
Paid legal fees
Each of the parties has paid legal fees. Where the payments came from the parties’ own resources, in accordance with the approach cited in In the Marriage of Omacini I am satisfied that the pool of assets for distribution would be greater but for the fact of those payments.
In the husband’s case, some of the funds applied to the payment of fees came in the form of loans from his partner. The advances from that source and the resultant debt cancel each other out. However, the husband paid $750 towards his costs. That amount will be included as a notional asset.
The wife paid $10,224.19. That amount will be included as a notional asset.
FJ Holden
As is noted above, the parties agree that they own a FJ Holden motor vehicle but do not agree about its value. It is agreed that it will be sold, the costs of restoration paid out and the net proceeds divided between the parties. For that reason the car is omitted from the list of assets. Similarly the parties agreed that the wife’s car and the associated debt and the car driven by the husband and the associated lease commitment would be omitted from the lists of assets and liabilities.
I find that the assets of the parties are:
Non Superannuation Assets Value Proceeds of sale of the former matrimonial home at Q held on trust $422,597.57 Wife’s Australian Defence Credit Union a/c … $414.00 Wife’s Newcastle Permanent a/c … $700.00 Wife’s 1969 Vespa motor scooter $1,750.00 Wife’s … trust account $13,862.00 Wife’s household contents $5,000.00 Wife’s paid legal fees $10,224.19 Husband’s Australian Defence Credit Union a/c $75.00 Husband’s St George Bank $200.00 Household contents $3,000.00 Husband’s paid legal fees $750.00 Total $458,572.76
Superannuation Assets Value Public Sector Superannuation Scheme - Wife $35,804 Military Superannuation and Benefits Scheme – Wife $65,856 MSMS - Husband $404,354 Total $506,014.00
Liabilities:
A debt is owed for the conversion of the FJ Holden to an alternative motor. That stands at $10,200. The parties have agreed that the car be sold and the debt be paid out of the proceeds prior to a division between the parties. I will not include that debt in the list of liabilities.
Certain other debts have been excluded by agreement as referred to above.
In accordance with the parties’ agreement I find that the relevant liabilities of the parties as at the date of the hearing are as follows:
Liabilities Amount CGT husband $12,500 CGT wife $12,500 $25,000.00
Net assets
The net non-superannuation assets have a value of $433,572.76 ($458,572.76 - $25,000). The superannuation assets have a value of $506,014.
Financial Resources
The husband has nearly 6 months of long service leave and 58 days in annual leave entitlements (exhibit 5). There is no evidence as to the husband’s intentions in relation to using those entitlements or cashing them out on the termination of his service. However, he is contemplating leaving the Defence Force in about 2 years. That could mean that the resource or part of it, becomes an asset.
There is no evidence that either of the parties has any other financial resources.
Contributions
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].
An asset by asset or global approach
[2] Mallett & 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
As to whether the Court should assess contributions asset by asset or globally the authorities have it 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.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full 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.”
None of those features apply here. The Full Court goes on at page 429 to say:
[63] However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the regulations if a splitting order is sought in any application before the court, or if no such order is sought, valued either according to the regulations or otherwise)….
I will apply the preferred approach.
In In the Marriage of Coghlan the Full Court said that where the list of assets is divided into superannuation and non-superannuation assets, the assessment of contribution must be undertaken in relation to each list:
[64] Then for the reasons we earlier gave, whether or not a splitting order is sought on either party’s application, the parties’ contributions to both the property (as defined in s 4(1)) and also to the superannuation interests should be assessed. The other factors in s 79(4)(d), (e), (f) and (g) would then need to be considered. Specifically in the context of s 79(4)(e), that is the s 75(2) factors, any division of the property (as defined in s 4(1)) and any “division” of any superannuation interest (in the sense of an allocation of the base amount) based respectively on the assessments of the parties’ contributions to the property and to any superannuation interest, would then be considered. Similarly, the parties’ future superannuation prospects (be they in capital or income form) would also need to be considered. The overall justice and equity of the ultimate award (including any proposed splitting order or the need for such an order) would then be considered
Thus the assessment of contributions and the consideration of the other matters in s 79(4) will be undertaken on the basis of two pools of assets: superannuation and non-superannuation assets.
Contributions to Superannuation Assets
Section 79(4)(a) Contributions
The parties each brought an interest in superannuation into the marriage. The husband’s contributory service commenced in about 1984. There is no evidence about the balance as at the commencement of cohabitation in November 1999 but in June 1999 his superannuation interest stood at about $147,000. The wife’s contributory service started in about 1993 and as at June 1999 her interest was in excess of $54,000. They each made direct contributions to superannuation during the marriage.
Section 79(4)(b) contributions
There is no evidence of non financial contributions to superannuation.
Section 79(4)(c) contributions
The husband conceded that the wife’s care of the children enabled him to continue to serve in the Defence Force, that service involving deployment. That allowed the husband to make continued and unbroken provision for his superannuation.
Conclusion on Contribution to Superannuation Assets
It is argued for the wife that her contribution to the superannuation pool was nearly 50%.
For the husband it is submitted the contributions to superannuation were made in the proportions 75% by the husband and 25% by the wife. As I understand the argument, that results from a 5% adjustment to the wife from the outcome that would arise from a strict reliance on the respective periods of contributory service, said to be 80% for the husband and 20% for the wife.
I am not permitted to take a formulaic approach to the assessment of contributions. I am to weigh the contributions. I take into account that the husband’s contributory service extended prior to the marriage to a greater extent than that of the wife. Although there is no evidence about it, the pre-marriage contributions are likely to have been at lower rates than more recent contributions. The husband’s direct financial contributions were significantly greater than those of the wife. The wife’s contributions as parent continued after separation and to the date of the hearing. The evidence supports the argument that the husband’s contributions to superannuation were greater than those of the wife. I assess the contributions to the pool of superannuation made by the wife to be 40% compared to 60% by the husband.
Contributions to the non-superannuation assets
Section 79(4)(a) Contributions
Financial contributions were made by and on behalf of each of the parties.
The wife brought $10,000 into the marriage in the form of savings with the Defence Credit Union. The husband brought in $25,000 that was sourced in a 15 year retention bonus from the Defence Force and was applied to the purchase of the B property in September 1999. Each of the parties owned a motor vehicle and the evidence is that about $18,500 was generated by the sale of the husband’s vehicle and $10,000 by that of the wife.
In relation to the purchase of the Q property the wife utilised her entitlement under the Defence Force Home Purchase Scheme of $12,500. That entitlement might be simply seen as an incidence of her employment and therefore no different to income, but I understand that the evidence would be that the husband retains a similar entitlement based on his own service.
The wife’s parents gave her $5,000 and she received a gift or inheritance from her grandmother’s estate of $10,000.
The wife also had income from paid employment. It is her evidence that she was paid a total of $269,700 in the financial years ending 30 June 1999 to 2006. Her annual income ranged from a high of $42,000 in 2000 to $27,200 in 2002.
The wife concedes that the husband was paid a total of $413,386 in the financial years ending 30 June 1999 to 2005. She says that in addition he received $32,000 in tax free allowances in 2003/2004 on his deployment overseas. She says that his taxable income ranged from a high of $85,000 in 2005 to $43,000 in 2004.
That the husband’s deployment allowances and retention bonuses were valuable components of his income and therefore, of his contributions.
Section 79(4)(b) contributions
The husband played a significant role in renovations undertaken to the Q property from November 2001 to December 2004. Without repeating the detail contained in 8 pages of his affidavit and several annexures:
In relation to three bedrooms the husband removed carpet, effected necessary repairs, prepared the floor for sanding, assisted the sanding contractor, estapoled the floor and prepared and painted the rooms. The wife assisted as did friends and members of the wife’s family;
With some assistance from his father, a plumber, a plasterer and the wife’s brother, the husband remodelled the main bathroom. He removed walls between a toilet and the bathroom and completely renovated the new, larger room. He made good different level ceilings, installed a shower recess and new prime cost items, poured a new floor, made an architrave, fitted a new door and tiled and painted the room;
In the second bathroom he poured concrete, made a cupboard for a hot water system. The husband painted the interior of the property at least once. He painted ceilings, walls, skirting boards, door and window frames. He prepared the surfaces including sanding, scraping and cleaning;
In the laundry the husband replaced the laundry sink, installed “new pipe work”, retiled and prepared and painted the room;
In the kitchen the husband installed a new dishwasher and with the wife’s assistance he cleaned the kitchen. He removed a cupboard and replaced handles and installed a blackboard;
In the lounge room the husband removed carpet, effected necessary repairs to floor bearers, installed new flooring, prepared the floor for sanding, sanded and estapoled the floor. He prepared and painted the room;
In the family room he removed the carpet and an electrical heater. He prepared the room for new carpet and painting and undertook the painting. He made good and painted a window frame;
In the hallways he removed carpet and paper that had been glued to the floor. With the wife’s parents he scraped the floor. He then assisted a contractor who sanded the floor. The husband then estapoled the floor, punching nails and filling the holes between coats. With his father he redesigned the front doorway and installed a security screen and a new door and prepared and painted the doorway and door. The husband prepared and painted the hallways. The wife assisted by sweeping up.
In the front yard, with some help from his parents, the husband cut down and removed a 30 metre pine tree, two other large trees, ten shrubs and a fence. He also removed a pathway. He ground the stump of the pine tree. The husband laid a sandstone pathway with brick edging and concreted bricks to define large garden beds. The child N assisted with this work. The husband and wife planted out the front yard. The husband rendered the base of the front fence and then, with the assistance of his father built a new fence. He also erected a fence across the side of the house and put a door in it.
On the left hand side of the block he removed trees, shrubs, a shed and an old wire fence. He removed and replaced the storm water pipes. He laid a concrete slab and with the help of the wife, installed a new shed. He laid sandstone pavers with brick edging and concreted bricks to define garden beds. The husband installed a sprinkler system, topsoil and turf and filled in the garden beds. The husband built a deck and screening to hide the shed.
On the right hand side of the block the husband removed and replaced the storm water pipes. He rebuilt and enlarged a timber deck. The wife and the child N assisted with puttying. He cleared weeds and installed paving stones. He repaired the rendering to the side of the house and repainted. With help from the wife and the parties’ parents he painted a new side fence.
The husband removed the back driveway and a fence and installed a new colour bond fence. He prepared and painted the back porch and put a gyprock ceiling in the carport. He helped an electrician install lights in the car port and he and a friend painted the back wall of the house.
The husband cleaned out the roof space and insulated and installed sheeting for storage.
The husband estimates that he spent a total of 1255 hours on the renovations to the Q property. He estimates that the wife worked about 15 hours on the renovations.
The husband made a very significant non-financial contribution. As to whether the renovations increased the value of the property and saved the parties money, I am confident that both propositions are true but there is no probative evidence as to the extent of the increase or savings.
Section 79(4)(c) contributions
There are two children of the marriage. There is no real conflict between the parties on the issue of parent and homemaker contributions. The wife made the greater contribution. That is not to say that the husband did not take every opportunity to spend time with the children. He is an active and involved father.
It is submitted on behalf of the wife that her contributions were made more difficult because the husband was away from home due to his employment and because of the renovations to the Q home. The husband had significant periods away from home. He was away from home for a total of more than 40 weeks in the 12 months from mid 2003. It is likely that life in the Q home was made more difficult over the period of several years during which the husband was engaged in the equivalent of 157, eight hour days of renovations.
Conclusion
The husband contends that his contributions were 55%-60% compared to 40% or 45% by the wife. The wife contends that her contributions slightly exceeded those of the husband.
Although the husband gave oral evidence to the effect that the wife was lazy during the marriage, when I raised that with his counsel I was told that that proposition would not be relied on in the husband’s case. Therefore there is no criticism of the effort made by either party. The husband paid child support for his daughter from his first marriage. There is no evidence as to the rates of that support. There is no other evidence of any significant diversion of matrimonial funds away from the purposes of the marriage.
The injections of funds by way of initial contributions and other payments made by and on behalf of each of the parties were of the same order. The husband’s retention bonus of $25,000 was balanced by the $25,000 that came through the wife in the form of savings, gifts and inheritances. The husband’s car was worth more than that of the wife.
The husband’s income was greater than that of the wife and he made the greater non-financial contribution, in the form of renovations to the Q property.
The wife made the greater contribution as parent and homemaker. The nature of the husband’s career, involving as it did, significant time away from home, placed special demands on the parties. The husband’s working arrangements allowed him to put the equivalent of nearly 6 months, full time into renovations. The fact of the renovations themselves and the fact of the husband’s very significant absences through work, increased the parent homemaker demands on the wife.
Very significant contributions were made by the parties and although they did not share each type of contribution equally, in my view their efforts and those made by friends and family on their behalf should be seen as equal.
The other matters in Section 79
Turning then to the matters identified in clauses (d) to (g) of s 79(4):
Section 79(4) (d)
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 such effect here.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (c), (d), (k), (l) and (m).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The wife is 36 years of age and the husband is 42. There is no relevant recent medical evidence. It is an agreed fact that the wife suffered from depression during the marriage. There is no evidence of a conclusive diagnosis as to the cause or any trigger for that depression. Nothing turns on the issue of the cause of her depression.
(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;
The wife’s income is $1,012.03 per week made up of her salary of $609 per week, $129.80 in Centrelink payments and $273.23 per week in child support. The wife lives with the parties’ children and her parents. Her mother’s weekly income is $158 per week and her father receives $284. The children have no income.
The wife’s expenses are as follows:
Expense Amount Income tax $223.00 Superannuation $52.32 Board $75.00 Storage costs $50.00 Motor vehicle insurance – ALLIANZ $10.58 House contents – ALLIANZ $6.35 Motor vehicle lease – Ford Focus … $103.00 Living expenses $584.00 Food $175.00 Household supplies $18.00 Electricity $22.00 Telephone $10.00 Clothing and shoes $60.00 Children’s activities $40.00 Child minding $103.00 Entertainment and hobbies $65.00 Chemist pharmaceuticals $8.00 Dry cleaning $6.00 Books and magazines $5.00 Gifts $25.00 Hairdressing toiletries $47.00 $584.00 Total $1104.25
Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
As to her earning capacity, the wife had been out of paid employment when she says the parties separated, in October 2005. She returned to full-time work with the Department of Defence in February 2006 and continued to work on that basis until October 2006. Since then the wife has arranged to reduce her hours to the point that as at the date of hearing she performs that work three days each week. She works 8.30 am to 5.00 pm on Monday, 8.30 am to 4.45pm on Tuesday and 8.30 am to 4.30 pm on Wednesday. She says that she found the reduction in hours necessary to best accommodate the needs of the children. However, she conceded in cross-examination that the reason she does not have paid employment on a Thursday is not related to the care of the children. In those circumstances she may have some unexercised earning capacity.
The husband’s income is $1,568 per week made up of his salary of $1,417 and a rental allowance of $151. He lives with Ms L, who he describes as his girlfriend. It is the husband’s evidence that the Defence Force does not classify them as living in a de facto relationship as the husband’s divorce is not yet final (that will occur in September 2007). The Defence Force classification is relevant to the question of the accommodation subsidy received by the husband. The husband does not intend for the relationship to progress to a de facto relationship at this stage. Ms L earns $1,110 per week and has savings of $60,000 or $70,000. The husband and Ms L do not intermingle their finances save that they each contribute to a joint account that meets rent and other outgoings and Ms L has lent him money. The husband’s fixed expenditure is as follows:
Expense Amount Income tax $284.00 Superannuation contributions to Military Superannuation $70.00 Rent to … Real Estate $300.00 Home contents insurance – AAMI $4.00 Lease – Volkswagon Golf … $207.00 Child Support payments $301.00 Total $1166.00
There is no evidence about the husband’s living expenses. Evidence about his assets, liabilities and resources is set out earlier in these reasons.
It is not suggested that the husband is not fully exercising his earning capacity. The husband has had unbroken service with the same employer for 23 years. He is contemplating leaving the Defence Force in about 2 years. If he did leave he would join the Reserve and would receive a tax free allowance in that regard. He understands that if he left he would need to wait until 64 years of age before accessing some of his superannuation. The remainder, he could take or roll-over. He anticipates that he would take the latter option.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
The parties share the care and control of the children. By orders I made with the agreement of the parties, the children will live with the wife most of the time and with the husband for about four weeks of holidays and every third weekend. It is not possible to know the extent to which the husband will be available for that time although the parties have made a commitment to provide the children with time with him before and after any deployment.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the wife’s commitments for herself and the children. Although the arithmetic does not reconcile, the wife apportions her weekly living expenses of $584 as to $185 for her own needs and $388 for those of the children. There is no evidence about the husband’s living expenses. He has a weekly surplus of about $400 to apply to those expenses. In cross-examination the husband asserted that he has no weekly surplus. I take that to mean that he spends at least $400 per week on his living expenses.
An issue in the case is the question of the parties’ need for appropriate accommodation and their capacity to provide it.
The evidence of the wife is that she would like to continue paid employment at the rate of about three days a week. She would like to live in the Port Stephens area because it is close to her parents and her work. Her parents assist with the children and her employer has been very accommodating in relation to flexibility of working arrangements. She would like to buy a three bedroom house with a garage and a flat yard. She understands that suitable houses in that area sell for between $390,000 and $450,000. A cheaper house is likely to need work that she could not afford to have done. She does not believe that suitable houses closer to Newcastle would be any cheaper
As things stand the husband will have the assistance of Ms L to defray the cost of his accommodation, whether that be in the form of rent or mortgage payments. The husband has experience in the renovation of residential accommodation, should that be necessary.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
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;
Each of the parties has superannuation interests that have been identified earlier. The wife receives a Centrelink benefit.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
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;
There is no evidence that either of the parties studied during the marriage.
(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;
(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;
(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;
At times both of the parties took leave to accommodate a posting or postings of the other. The husband took leave when the wife was posted to Malaysia. However, the wife’s career was affected by the marriage to a greater extent than the husband’s career. The wife took maternity leave and had periods out of the paid full-time workforce to allow the husband to commit to his career. The wife has rarely commanded a level of remuneration comparable to that earned by the husband. She has no doubt lost some of the benefits of unbroken full-time paid employment. Benefits such as the opportunity for promotion or progression through pay grades, long service and other leave entitlements and the establishment of significant employer funded superannuation entitlements.
(l) the need to protect a party who wishes to continue that party's role as a parent;
It is part of the wife’s case that her capacity for paid work is reduced because she wishes to continue to be involved in the care and supervision of the children. The children will spend greater periods with the wife and for significant periods she may have no real respite from parental responsibilities.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have referred above to the evidence about the financial circumstances relating to the husband’s cohabitation with Ms L.
(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
I have referred to the fact of child support payments. The current payment is between $273 and $301 per week. The wife originally applied for an assessment in about August 2005.
Much was made in the wife’s case of the fact that the husband has agitated for reductions in his child support liability. Nothing turns on that fact alone. Provided the husband pays the assessed child support then it is beyond the scope of proceedings under the Family Law Act to re-visit the adequacy or otherwise of the outcome of the definition of child support, whether under the administrative scheme or by a Court. The fact of the rate of payment is already taken into account above.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
It is an agreed fact that during the marriage the wife encouraged the husband to spend time with his daughter from his first marriage. It is also agreed that the wife spent some time but not a great deal of time with the husband’s daughter. It is difficult to see that these facts would have any significant bearing on the settlement of property.
Otherwise nothing comes to attention under this provision.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
I have referred to the parenting orders made in the proceedings.
Section 79(4)(g)
This is not relevant.
Conclusion
The parties agree that there should be an adjustment in favour of the wife for the other matters in section 79(4). The husband says it should be 10% of the non-superannuation assets and the wife argues for an adjustment in the range of 15-20% of a combined pool of superannuation and non-superannuation assets.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø The wife is six years younger than the husband;
Ø As is often the case, one of the most valuable ‘assets’ of this marriage is the husband’s unbroken history of well paid, secure employment. The wife too has had periods of full-time employment but she has consistently been paid less than the husband;
Ø The children live more of the time with the wife than the husband. During some periods the wife will have little or no respite from her parenting role because of the husband’s work commitments;
Ø The husband pays the assessed level of child support;
Ø The husband lives in a relationship with Ms L and shares living expenses with her;
Ø Each of the parties will need proper accommodation but the husband is better placed in that regard. His income is greater, his borrowing capacity is greater, there are two incomes and some capital from Ms L which might be applied to those costs and the husband has a proven capacity to renovate residential accommodation;
Ø The calculation based on contributions alone would leave the husband with the greater share of the superannuation assets;
In my view there should be an adjustment by virtue of the other matters in section 79(4). The wife has a lower earning capacity and she will have the children for a greater part of the time. The husband lives with Ms L and she has an income and some capital. The adjustment should be 10% of each pool.
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of superannuation is an equal division. The pool of non-superannuation assets should be divided in the proportions 60% to the wife and 40% to the husband. Finally, 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.
The critical issues here is:
Whether the parties should receive their entitlement to superannuation in the form of superannuation or whether one party should take a disproportionate distribution of superannuation and the other should have a consequential adjustment out of non-superannuation assets.
In amending the Family Law Act 1975 to permit the splitting of superannuation payments the Parliament has indicated a preference for dealing with superannuation by splitting superannuation payments. The policy aims include the priority placed on there being better provision for self-funded retirement. Given that superannuation interests cannot normally be accessed and dealt with as easily as other assets it is often unfair to require one party to retain a disproportionate amount of the superannuation interests and a lesser proportion of the non-superannuation assets.
The Court can take judicial notice of the fact that recent changes to the law including the reduction in tax paid on superannuation income after 60 years of age may have reduced the disadvantages of taking funds in the form of superannuation compared to accessible assets. There is a discretion to be exercised in relation to the proportions in which the parties retain a superannuation interest. With a splitting order the wife will have a base of about $250,000 on which to make provision for a self-funded retirement. With his greater income, the husband will be better placed but nevertheless, at 36 years of age, the wife will have a good start. On the other hand her immediate need is for secure and appropriate accommodation and she is in a worse position than the husband to borrow for that purpose.
The superannuation assets have a value of $506,014. The wife’s entitlement pursuant to section 79 as identified above is 50% or $253,007. If she takes 75% of her entitlement in the form of superannuation her overall entitlement would be reduced to $189,755.25. She already has $101,660 in her own superannuation funds. She should then receive a spit of the husband’s superannuation calculated on a base amount of $88,095.25. I will round that down to $88,000.
As to the non-superannuation assets they are to be divided in the proportions 60% to the wife and 40% to the husband. Based on the reduced component of superannuation taken by the wife, she should receive an adjustment from the non-superannuation assets. It is not a matter of dollar for dollar as there should be some discounting for the fact that the husband will wait many years to access all of his superannuation. The difference between what 50% of the superannuation and the wife taking only 75% of that in the form of superannuation is $63,347 in superannuation. I will allow an adjustment against the non-superannuation assets of $50,000 in the wife’s favour.
The non-superannuation assets have a net value of $433,572.76. 60% is $260,143.66 and together with the adjustment of $50,000 referred to above, the wife’s entitlement would be $310,143.66.
The wife already has or has had the benefit of:
Non Superannuation Assets Value Wife’s Australian Defence Credit Union a/c … $414.00 Wife’s Newcastle Permanent a/c … $700.00 Wife’s 1969 Vespa motor scooter $1,750.00 Wife’s … trust account $13,862.00 Wife’s household contents $5,000.00 Wife’s paid legal fees $10,224.19 CGT wife -$12,500 Total $19,450.19
In order to bring the wife to her entitlement she would receive $290,693.47 from the invested proceeds of the Q property.
The husband has or has had the benefit of:
Non Superannuation Assets Value Husband’s Australian Defence Credit Union a/c $75.00 Husband’s St George Bank $200.00 Household contents $3,000.00 Husband’s paid legal fees $750.00 CGT husband -$12,500 Total ($8,475.00)
On that calculation the husband would receive $131,904.1 from the invested fund.
In order that each of the parties shares in any interest that may have accrued I will express the division in terms of percentages. $290,693.47 is about 68.8% of the agreed balance of the invested fund. The wife will take 68.8% and the husband 31.2% of the invested fund.
The parties have Capital Gains Tax obligations. There is a question as to whether the tax should be paid before the proceeds of the home are divided. The obligation will crystallise with their income tax returns and the timing of those returns will be affected by their individual circumstances. In my view it is best that they each be responsible for their own tax obligation.
Conclusion under Section 79
I will order that there be a split of the husband’s superannuation based on an amount of $88,000, that they divide the proceeds of sale of the Q property in the proportions 68.8% to the wife and 31.2% to the husband and that they otherwise retain what they have and what they owe. In my view that outcome is just and equitable.
The FJ Holden motor vehicle is to be sold and after the costs of restoration are paid out, the net proceeds shall be divided between the parties in the proportions 60% to the wife and 40% to the husband.
I will stay the operation of the orders for a period of 14 days to allow the parties to restore the proceedings before me in relation to the form of the orders.
I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate
Date: 26 October 2007
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Family Law
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Equity & Trusts
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