Hauff & Hauff

[1986] FamCA 16

In the marriage of HAUFF, H.M. and HAUFF, T.G.

(1986) FLC ¶91-747

Other publishers' citations: (1986) 10 FamLR 1076

Full Court of the Family Court of Australia at Brisbane.

Judgment delivered 18 July 1986.

Before: Fogarty, Murray and Strauss JJ.

Fogarty and Murray JJ.: By notice of appeal dated 13 September 1985, H.M. Hauff has appealed against orders which were made by Bell J. on 15 August 1985. Although the parties were divorced in 1984, it is convenient for the purposes of this judgment to refer to the parties as husband and wife respectively.

The proceedings were constituted by an application by the wife for property settlement under sec. 79 of the Family Law Act, which application was filed on 21 May 1984. The proceeding came on for hearing before Bell J. on 15 August 1985 and after evidence and submissions on that day his Honour delivered judgment. The effect of his Honour's orders was to direct that the husband pay to the wife within 60 days the sum of $33,000 and upon that payment the wife was to transfer to the husband her interest in the jointly-owned matrimonial home at Burkedale, together with the furniture in the husband's possession and a Mazda motor car, the wife to retain the furniture in her possession. The orders went on to provide that the husband was to indemnify the wife against any liabilities in respect of a credit union debit account, and that in the event of the capital sum not being paid to the wife as provided, the home was to be sold for a figure of not less than $64,000 and the wife was to receive therefrom the sum of $33,000 together with interest.

The wife, by her notice of appeal, contends that the proper order was one requiring the husband to pay to her the sum of $47,000.

The background marital facts are these. The parties were married on 17 January 1969 and separated in June 1983 and were divorced in this Court during the following year. There were three children of the marriage aged respectively 12, 10 and 8. They have lived with the wife since separation. In 1983 orders were made granting custody to the wife and access to the husband and the husband was ordered to pay maintenance for the children totalling $70 per week. At the time of the hearing each party was aged 39 years.

[His Honour set out the areas of agreement between the parties in relation to the issues involved. The parties each admitted that they had made equal financial and other contributions during the marriage and that their net assets amounted to $47,100 at the time of the trial. His Honour then discussed the parties' incomes and continued:]

Neither party had any other assets or financial resources aside from the husband's superannuation which attracted the major controversy in this case, both before the trial Judge and on appeal before us.

The facts which were before his Honour relating to this matter were presented in a rather limited way but appear to be as follows. The husband commenced his employment with his present company in December 1967, that is a little over a year before the marriage. His contributions to the fund were 6 per cent of gross salary and he received 2.5 per cent interest on those contributions. It appears that, relevantly here, after a period of ten years the company, under the terms of the trust, added an amount equivalent to that which the husband had contributed to the fund up to that point. The husband would normally have received the benefit on retirement at age 60, but it appears that he was entitled to the receipt of the amounts hereafter referred to if he retired at the relevant dates. It was agreed that the relevant amount as at the time of separation (June 1983) was $32,199, and that at the date of trial $46,800.

Before his Honour the relevance of the superannuation entitlement of the husband centred around two issues of contention:

(a) the date at which this amount should be considered, and
(b) whether the amount added into the fund by the employer should be taken into account and, if so, to what extent.

It needs to be emphasised that the way in which this case was presented before his Honour was such as to treat these as the two decisive issues on this question of superannuation. The wider issue of the relevance of future benefits receded into the background. This was largely because, arising partly out of the agreement of the parties and partly because of the way in which the proceedings were conducted, the emphasis in this case seemed to be largely upon the question of contributions. The relevance of superannuation in most proceedings is twofold. In the majority of cases it represents a form of saving by the parties during the course of their marriage to which each of them is treated as having made either a direct or indirect contribution: see Bailey and Bailey (1978) FLC ¶90-424 at p. 77,145. We doubt whether it is necessary, in the ordinary run of cases, to establish actual ``deprivation'' by the non-contributor as may be suggested in Turner and Turner (1984) FLC ¶91-528 and in Whitehead and Whitehead (1979) FLC ¶90-673.

The second aspect in most cases is that it represents a future financial resource and a future protection against the uncertainties of life and a nest-egg for the retirement of both parties (and not merely the contributor) if their marriage continued to that point: see Bailey's case, supra. In this case the emphasis was largely (if not exclusively) upon the first of those issues and no evidence and little by way of submissions was directed to the latter issue.

However, returning to the two issues which his Honour was asked to determine, he dealt firstly with the question of the relevant date. What his Honour said was:

``I am persuaded in superannuation cases, difficult as they are, that the time for the quantification of the amount which may be looked upon as a financial resource is the date of separation. My reasons for so saying are that I consider the only way the wife can in effect claim she has some entitlement to the fund, which is a contingent fund and which comes about solely as a result of the husband's employment, is that she has by her work in the house enabled him to carry out his employment...''

As a generality we do not consider that his Honour was correct in this approach. Ordinarily in proceedings under sec. 79 the property and financial resources of the parties are considered as at the date of trial: see generally Williams and Williams (1984) FLC ¶91-541 (Full Court) (1985) FLC ¶91-628 (High Court) and Carter and Carter (1981) FLC ¶91-061 and the terms of sec. 79(1) and 75(2). However, in a particular case there may be reasons which justify the selection by the trial Judge of another date, and in many such cases that may be the date of separation of the parties. Nor as a generality do we think that superannuation cases are an exception to this general approach: see generally G. and G. (1984) FLC ¶91-582: Noel and Noel (1981) FLC ¶91-035; Prestwich and Prestwich (1984) FLC ¶91-569; Woolley and Woolley (No. 2) (1981) FLC ¶91-011; Webber and Webber (1985) FLC ¶91-648 and the cases therein referred to. This can be an important matter because of the steep rise in the relevant amounts in the later years of the entitlement.

It appears to us that in this particular case his Honour, in making those observations, was really directing himself to the first of the two aspects of superannuation, namely, contribution. In some cases the indirect contribution of the other spouse may be treated as terminating on separation, and in that sense it may be appropriate in those cases to consider contributions as at that point. Of course, in many cases the indirect contribution will be treated, at least notionally, as continuing: for example in cases (of which this is not one) where the contributor makes no contribution to the support of the other spouse and children of the marriage but continues his superannuation contributions. However, it is unnecessary to consider this aspect as a matter of principle in this case. The approach adopted by his Honour, although, in our view, wrong as a generality, was within his discretion in this case having regard to the evidence and the way in which the case was conducted.

His Honour then turned to the second aspect. He summarised the submissions on behalf of the husband that the contribution made by the employer should be disregarded or discounted. His Honour's conclusion in relation to that was as follows:

``I think, however, there is a little in what [counsel] says, in that her contribution to that part of the superannuation fund should be discounted, but I should not be discounting it to any great extent.''

His Honour then went on to adopt what he said was his practice in relation to these matters, at least in relation to the contribution aspect of superannuation. He made a calculation based upon the number of years of the marriage and the number of years of contribution to the fund, and on that basis treated the relevant amount as at separation as $29,700. One half of that would have been $14,850. His Honour, however, discounted that to an amount of $10,500 because ``perhaps the wife contributed less to that increase than the husband did''; that is, to the employer's contribution.

His Honour's approach after that, and which was in accordance with the way in which the case was conducted before him, was to add that figure of $10,500 to $23,500 (one half of the total assets after allowance for furniture with the wife) to come to the total figure of $33,000.

Before us there was no challenge to the general approach of his Honour. The argument on behalf of the appellant in this respect was that his Honour was in error in discounting the amount of superannuation in the way that we have indicated.

In our view there is substance in that submission. The contribution by the employer was part and parcel of the superannuation scheme to which the husband belonged, and therefore part of his overall employment arrangements: Morris and Morris (1982) FLC ¶91-271 at p. 77,519. A contribution by the employer is a common feature of almost all superannuation funds although the details vary from case to case. This was not a case where the amount paid into the fund by the employer was an ex gratia payment or an exceptional payment which could not be seen as part of the overall employment arrangement. Indeed, as ground 3 of the notice of appeal puts it, ``The employer's contributions were part of the husband's indirect remuneration arising from his personal exertions''. In out view his Honour was in error in making the discount. Although the figure involved, $4,350, is a relatively small amount in ordinary circumstances, it is a substantial sum in the circumstance of this case and, in our view, the orders of his Honour should be varied to take up that additional amount.

In ordinary circumstances a trial Judge, in dealing with a property application under sec. 79 and after dealing with questions of contribution, would then go on to deal with what can be broadly described as the sec. 75(2) factors (see generally Lee Steere and Lee Steere (1985) FLC ¶91-626). That was not done in this case. His Honour, after determining the issues relating to superannuation and making the calculations referred to above, then made his orders.

However, it appears to us that that was largely brought about by the way in which the matter was presented. There were relevant factors under sec. 75(2) which would normally call for consideration. They include the husband's future superannuation benefits (although little evidence was given on that), the more secure and more highly paid employment of the husband and the greater financial responsibilities of the wife.

However, in effect, those matters had been taken into account by the very approach which was adopted by the parties' advisers and the trial Judge. The superannuation benefit of the husband was not an existing asset, but was a financial resource. In the calculations which his Honour adopted that, however, was treated in a relatively direct way and a direct amount was allowed to the wife out of the existing assets of the parties to take that matter into account. The overall result was that the wife receives (after the adjustment referred to above) out of the total existing net assets of $47,100 an amount of $37,350 which is almost 80 per cent and retains some furniture. That appears to us to be a result which, if one looked at this matter in a more traditional way, would be at the top end of the exercise of a proper discretion.

Counsel for the wife submitted that the relevant percentage in favour of the wife was much smaller than that, but his calculations included the amount presently referable to the husband's superannuation. It is, we think, artificial to include that figure at this stage. It is not money to which the husband is presently entitled, and he can only become entitled to it upon retirement from his present employment, which is not only unlikely but may have a significant impact upon his financial circumstances otherwise.

Counsel for the wife further submitted that, in this case, the entitlement of the husband under the fund was ``property'' within the Family Law Act. He submitted that property includes a chose in action and that the husband has a present right of action against the trustees of the fund. The only present right of action which the husband has, since none of the precipitating events entitling him to payment have occurred, is an action to require the trustees to administer the trust in accordance with their obligations, but, as it is not suggested that they are not doing that, that would be quite an empty present right of no relevance in the context of this case.

Subject only to adding in the sum of $4,350, his Honour's discretion ought not to be interfered with.

The Court can only deal with the present property of the parties and in this particular case that was relatively small. The wife receives the substantial proportion of that existing property, although, if looked at as a generality, it is little enough overall given her commitments to the three children. The husband is left with very little by way of net assets, but he does have the future superannuation benefits and his secure and relatively high paid employment. It also needs to be borne in mind that the husband is paying a reasonable amount of maintenance for the three children and, of course, that amount is capable of variation if circumstances dictate it. There is also the circumstances that the wife's own maintenance, if it subsequently becomes relevant, was not the subject of finalisation in these proceedings.

In our view the appeal should be allowed and para. 1 of the orders of 15 August 1985 varied by substituting the sum of $37,350 for the sum of $33,000 therein referred to. The time for payment should be extended to 30 days from this date.

Strauss J.: I agree with the order proposed by Fogarty and Murray JJ. In my view, the trial Judge was under a misapprehension as to the law when he said:

``I am persuaded in superannuation cases, difficult as they are, that the time for the quantification of the amount which may be looked upon as a financial resource is the date of separation.''

A similar view was expressed by the trial Judge when the case was opened by counsel who appeared for the wife. His Honour then said: ``I think the financial resources generally, unless you can convince me to the contrary, should be valued as at the date of separation.''

Some of the difficulties in this case derive from the manner in which the case was presented. Nevertheless, what the Court was required to do by virtue of the provisions of the Act is clear enough. If the Court was satisfied that it was just and equitable to do so, it had to make a determination by which it altered the interests of the parties in their property or the property of either of them so as to bring about the readjustments which the justice of the matter required consequent upon the breakdown or the dissolution of the marriage. (Cf. Lansell and Lansell (1964) 110 C.L.R. 353 per Kitto J. at p. 361.)

What order was just as between the parties had to be determined by taking into account the matters in para. (a), (b), (c), (d), (e) and (f) of sec. 79(4) and this included, by virtue of para. (e) the relevant matters in sec. 75(2). The real question which had to be answered in this case was what alterations in the property interests of the parties or either of them were just and equitable in the light of all the matters which had to be taken into account. Where, as here, amongst other matters respective present and future needs or requirements had to be evaluated and balanced, the Court had to take into consideration the situation of the parties as it was at the time of the hearing, including ``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'' (sec. 75(2)(b)).

A number of the other relevant paragraphs in sec. 75(2) require a consideration and comparison of the circumstances of each of the parties as at the time of the hearing.

The contributions of the kind referred to in sec. 79(4)(a) and (b) of each party to property and the contributions by one party to the income, earning capacity and financial resources of the other party referred to in sec. 75(2)(j) are only some of the matters which may have to be taken into account. The fact that the contributions to property and to a financial resource of the other party ceased upon separation may be one of the material factors in the exercise of the discretion under sec. 79(1), just as other intervening events may bear upon the outcome.

The other matter of complaint was that his Honour drew a distinction between the husband's and the employer's contributions to the husband's superannuation fund in determining what the wife's contribution to this resource belonging to the husband was. I am unable to see the rationale for such a distinction. It is true that the husband's contributions were deducted from his salary and the employer's contributions were something in addition to his salary. Nevertheless, both the husband's and the employer's contributions to the fund were constituent parts of the husband's remuneration derived from his employment.

Whilst there was no claim for maintenance in this case, I infer that his Honour's order was intended to determine, so far as practicable, financial relations between the parties. However, as in all cases where there is no approved deed under sec. 87 dealing with rights to maintenance, the wife's entitlement to make application for leave under sec. 44(3) to institute proceedings for her own maintenance continues.