Henty and Henty

[2007] FamCA 15

FAMILY COURT OF AUSTRALIA

HENTY & HENTY [2007] FamCA 15

FAMILY LAW - PROPERTY - Settlement in relation to marriage – Superannuation – Contributions to non-superannuation property – Contributions to superannuation

Family Law Act 1975 (Cth) – s 75(2), s 79, s 90MT(1)(b), s 90MT(4)

Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Gosper and Gosper (1987) FLC 91-818
Kessey and Kessey (1994) FLC 92-495
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414
Levick and Levick (2006) FLC 93-254

APPLICANT: Mrs Henty

RESPONDENT: Mr Henty

FILE NUMBER: SYF 3914 of 2005

DATE DELIVERED: 24 January 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 25 and 26 September 2006

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Snelling

SOLICITOR FOR THE APPLICANT: Milne Berry Berger Freedman, Solicitors

COUNSEL FOR THE RESPONDENT: Mr Campton

SOLICITOR FOR THE RESPONDENT: Matthews Dooley Gibson, Solicitors

Orders

1. That within 42 days the wife pay to the husband the sum of $108 957 and discharge the mortgage on the former matrimonial home at L, New South Wales.

2. That in the event that the wife complies with the above order the husband shall forthwith do all things and sign all documents necessary to transfer his interest in the said home to the wife.

3. That in the event that the wife fails to comply with Order 1:

   (i)The husband and wife do all things and sign all documents necessary to list the former matrimonial home for sale by private treaty with a Real Estate Agent agreed between the parties and at a price agreed between the parties or failing agreement within fourteen (14) days then as determined by the President from time to time of the New South Wales Division of the Property Institute of Australia or his nominee as an expert not as an arbitrator.

   (ii)That if the said property is not sold within three (3) months after the date of listing pursuant to order 1 herein then each party forthwith do all acts and things and sign all documents necessary to list the said property for sale by public auction with an auctioneer agreed between the parties and at a reserve price agreed between the parties or failing agreement as determined by the President from time to time of the New South Wales Division of the Property Institute of Australia or his nominee as an expert not as an arbitrator on the following conditions:-

   a)That each party pay one half of the fees payable to such auctioneers immediately upon request by such auctioneers;

   b)That the parties shall attend the auction sale and in the event that the reserve price is not received negotiate with the highest bidder;

   c)That each party co-operate in every way with the auctioneers in relation to the auction of the said property;

   d)That each party execute all documents necessary to complete the sale.

   (iii)That in the event that the property is not sold by public auction as provided for above then the property is to be relisted on the market for sale by private treaty with a real estate agent agreed between the parties and at a price agreed between the parties or failing agreement within fourteen (14) days after the auction then as determined by the President from time to time of the New South Wales Division of the Property Institute of Australia or his nominee as an expert not as an arbitrator.

   (iv)That the proceeds of sale of the former matrimonial home be disbursed as follows:-

   (a)In payment of the costs of the sale including the real estate agent’s fees, legal fees and auctioneer’s fees, if any;

   (b)In payment of the mortgage to the National Australia Bank;

   (c)In payment of any rate adjustments as at the date of settlement of the sale;

   (d)In payment of 78.086 percent of the balance to the wife;

   (e)In payment of the balance to the husband.

4. That within fourteen (14) days of the date of these orders each party sign all documents and do all acts necessary for the M shares held by the parties individually or jointly to be sold and the net proceeds from the sale of those shares be divided between the parties equally.

5. That the Court allocates pursuant to Section 90MT(4) of the Family Law Act 1975, an amount equal to 25 percent to the wife out of the husband’s interest in the R Super Trust, sub-plan M Superannuation Plan (MT225).

6. That in accordance with Section 90MT(1)(b) of the Family Law Act 1975 whenever a splittable payment becomes payable from the husband’s interest in the R Super Trust, sub-plan M Superannuation Plan the Trustee of the R Super Trust, sub-plan M Superannuation Plan shall pay to the wife an amount equal to 25 percent of the splittable payment and that there be a corresponding reduction in the entitlement that the husband would have in the R Super Trust, sub-plan M Superannuation Plan but for these orders.

7. That the operative time for the above order be 28 business days from the date a sealed copy of these orders is served on the R Super Trust, sub-plan M Superannuation Plan Trustee.

8. That within fourteen (14) days of the date of these orders the wife make available for collection by the husband his photographs at the former matrimonial home.

9. That each party be declared the sole owner in law and equity of all items of personalty, chattels and financial resources in their name possession or control not otherwise dealt with in these orders including but not limited to bank accounts, shares, any choses in action and superannuation benefits.

10. That in the event that either party refuses or neglects to execute any deed or instrument the Registrars of this Court are hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument upon being satisfied by affidavit of such neglect or refusal. A party shall be deemed to be in default if that party refuses or neglects to sign any document within seven (7) days of being requested to do so in writing.

11. That the above orders not commence operation until 8 February 2007.

12. That both parties have leave to re-list these proceedings for further submissions in relation to the form of the orders only at any time prior to 8 February 2007.

13. That all exhibits be released.

14. That both parties have leave to re-list these proceedings on 7 days notice in relation to the implementation of these orders.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3914  of 2005

Mrs Henty

Applicant

And

Mr Henty

Respondent

REASONS FOR JUDGMENT

Applications

1. Mrs H, to whom for convenience I shall refer as “the wife” seeks the following orders:

   (1)That the husband shall do all acts and things and sign all documents necessary to cause the whole of his right title and interest in the property that being L in the State of New South Wales, more particularly described as Folio Identifier …, to be transferred to the wife.

   (2)That the wife shall simultaneously with effect being given to Order 1 refinance the mortgage secured over the property, namely L in the State of New South Wales in favour of the National Bank of Australia into her name solely.

   (3)That the Court allocate pursuant to Section 90MT(4) of the Family Law Act 1975, an amount equal to 25 percent to the wife out of the husband’s interest in the R Super Trust, sub-plan M Superannuation Plan.

   (4)That in accordance with Section 90MT(1)(b) of the Family Law Act 1975 whenever a splittable payment becomes payable from the husband’s interest in the R Super Trust, sub-plan M Superannuation Plan the Trustee shall pay to the wife an amount equal to 25 percent of the splittable payment and that there be a corresponding reduction in the entitlement that the husband would have in the R Super Trust, sub-plan M Superannuation Plan but for these orders.

   (5)That the operative time for order 4 be four (4) business days from the date a sealed copy of these orders is served on the R Super Trust, sub-plan M Superannuation Plan Trustee.

   (6)The wife will from the date of these orders indemnify and keep indemnified the husband against all outgoings and future mortgage repayments in respect of the property at L in the State of New South Wales.

   (7)That the wife transfer to the husband her interest in the Marsh shares and A shares and the husband retain his interest in the I shares.

   (8)Otherwise as provided in these orders the wife and the husband are each liable to the exclusion of the other for their respective debts and liabilities and indemnify the other party from such debts and liabilities.

   (9)Otherwise, as provided in these orders, the wife and the husband are each liable to the exclusion of the other, for their respective debts and liabilities and indemnify the other party from such debts and liabilities.

   (10)Otherwise, as provided in these orders, the wife and the husband each retain to the exclusion of the other all real property, monies on account, superannuation entitlements, motor vehicles and personal effects currently in their name, possession, custody or control.

   (11)Each party pay their own costs.

2. Mr H, to whom for convenience I shall refer as “the husband” seeks orders to the following effect:

   (1)That each party immediately do all acts and things and sign all documents necessary to list the former matrimonial home for sale by private treaty with a Real Estate Agent agreed between the parties and at a price agreed between the parties or failing agreement within fourteen (14) days then as determined by the President from time to time of the New South Wales Division of the Property Institute of Australia or his nominee as an expert not as an arbitrator.

   (2)That if the said property is not sold within three (3) months after the date of listing pursuant to order 1 herein then each party forthwith do all acts and things and sign all documents necessary to list the said property for sale by public auction with an auctioneer agreed between the parties and at a reserve price agreed between the parties or failing agreement as determined by the President from time to time of the New South Wales Division of the Property Institute of Australia or his nominee as an expert not as an arbitrator on the following conditions:-

   a)That each party pay one half of the fees payable to such auctioneers immediately upon request by such auctioneers;

   b)That the parties shall attend the auction sale and in the event that the reserve price is not received negotiate with the highest bidder;

   c)That each party co-operate in every way with the auctioneers in relation to the auction of the said property;

   d)That each party execute all documents necessary to complete the sale.

   (3)In the event that the property is not sold by public auction as provided for above then the property is to be relisted on the market for sale by private treaty with a real estate agent agreed between the parties and at a price agreed between the parties or failing agreement within fourteen (14) days after the auction then as determined by the President from time to time of the New South Wales Division of the Property Institute of Australia or his nominee as an expert not as an arbitrator.

   (4)That the proceeds of sale of the former matrimonial home be disbursed as follows:-

   a)In payment of the costs of the sale including the real estate agent’s fees, legal fees and auctioneer’s fees, if any;

   b)In payment of the mortgage to the National Australia Bank;

   c)In payment of any rate adjustments as at the date of settlement of the sale;

   d)In payment of 55 percent of the balance to the wife;

   e)In payment of the balance to the husband.

   (5)That within fourteen (14) days of the date of these orders each party sign all documents and do all acts necessary for the shares held by the parties individually or jointly to be sold and the net proceeds from the sale of those shares be divided between the parties equally.

   (6)That the Court allocate pursuant to Section 90MT(4) of the Family Law Act 1975, an amount equal to 50 percent to the wife out of the husband’s interest in the R Super Trust, sub-plan M Superannuation Plan.

   (7)That in accordance with Section 90MT(1)(b) of the Family Law Act 1975 whenever a splittable payment becomes payable from the husband’s interest in the R Super Trust, sub-plan M Superannuation Plan the Trustee of the R Super Trust, sub-plan M Superannuation Plan shall pay to the wife an amount equal to 50 percent of the splittable payment and that there be a corresponding reduction in the entitlement that the husband would have in the R Super Trust, sub-plan M Superannuation Plan but for these orders.

   (8)That the operative time for order 7 be four (4) business days from the date a sealed copy of these orders is served on the R Super Trust, sub-plan M Superannuation Plan Trustee.

   (9)That within fourteen (14) days of the date of these orders the wife make available for collection by the husband his photographs at the former matrimonial home.

   (10)That each party be declared the sole owner in law and equity of all items of personalty, chattels and financial resources in their name possession or control not otherwise dealt with in these orders including but not limited to bank accounts, shares, any choses in action and superannuation benefits.

   (11)That in the event that either party refuses or neglects to execute any deed or instrument the Registrar or Deputy Registrar of the Parramatta Registry of the Family Court of Australia be and is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument upon being satisfied by affidavit of such neglect or refusal. A party shall be deemed to be in default if that party refuses or neglects to sign any document within seven (7) days of being requested to do so in writing.

   (12)That the wife pay the husband’s costs of and incidental to these proceedings.

Background

1. The husband was born in November 1962.  The wife was born in January 1964.  The parties married in July 1984 and they separated in November 2004.

2. There are three children of the marriage, B born in April 1987 who is therefore 19 years of age, S born in April 1989 who is therefore 17 years of age and T born in October 1991 who is therefore 15 years of age.

3. In early 1984 in anticipation of their marriage, the parties purchased a home in the United Kingdom (“the UK”) for £26 000.  They used their savings of £3000 and borrowed the balance.

4. At the commencement of the marriage the husband’s property consisted of his interest in the home and in the parties’ joint account, a Ford Capri motor vehicle and a stereo system.  The husband was working as a re-insurance clerk with his current employer.

5. At the commencement of the marriage the wife’s property consisted of her interest in the home, some savings and her interest in the parties’ joint account.

6. The wife was working as a Pensions Administrator.  She continued to work in this capacity until shortly before the birth of the parties’ eldest child B.

7. The husband was able to transfer to a position in Australia with his employer.

8. The parties migrated to Australia in July 1989.  They sold their home in the UK and received net proceeds of sale equivalent to $58 000.

9. They then purchased a home at W for $136 000.  They used the funds available from selling their home in the UK, some savings and they borrowed $70 000 to $80 000 from the ANZ Bank secured by mortgage.

10. They took occupancy of this home in late 1990.

11. Then they undertook some improvements to the property including installation of a semi in-ground swimming pool.  They also had a new kitchen installed and extended the home.  The husband retiled the bathroom and the husband and wife did some painting.  The wife’s father and brother assisted with some of the work.  They also did some other work.  Some of these improvements were funded by a draw down on the home loan.

12. Sadly the wife’s father was diagnosed with cancer in February 1997.  The wife’s mother was working as a bank teller and the wife cared for her father during times when her mother was working until he passed away.

13. Just before he died in September 1997, the wife’s father gave the husband and wife $10 000 in appreciation for their assistance in his time of need.

14. In February 1998 the parties purchased a block of land at L for $153 000.  Of this amount, it is clear that the wife’s mother paid $98 800.  There is an issue about how the Court should regard this advance and I shall refer again to this below.

15. The parties desired to build a home on the land.  Accordingly, they sold their W home for $180 000 the net proceeds being $105 000.  The parties then arranged for a building company to build a project home on the land for $158 722.  The total cost of this property came to $384 000.  The parties used the net proceeds of sale of W and borrowed $150 000 in addition to funding the purchase of the land as referred to above.

16. While their home was being constructed the parties lived with the wife’s mother in her home which she had purchased near the parties’ matrimonial home after the death of her husband.

17. From approximately mid-2003 the parties’ marriage was in serious difficulty.

18. In July 2004 the wife commenced working in casual full time employment as a receptionist / clerk earning approximately $35 000 per annum.  The wife established her own bank account.  The wife did not inform the husband of her employment.  They had been occupying separate bedrooms for approximately a year and the wife said that they were not communicating.

19. The husband’s motor vehicle was stolen.  On 19 November 2004 the husband received $17 930 from CGU Insurance in respect of the loss of his motor vehicle.  The husband withdrew $9000 from his account and provided this to the wife as her share of the insurance funds.

20. As indicated above, a few days later namely, on 22 November 2004 the parties separated although they continued to reside in the former matrimonial home.  From this time the husband paid the wife $400 per week and $1400 per month for the home loan repayment.  From February 2005 the husband reduced the $400 per week to $267 per week.

21. In February 2005 the husband purchased the property at N for $387 000.  He borrowed $9990 from his parents and $376 000 from the ANZ Bank.  The husband funded the $1000 shortfall, legal costs of the conveyance and the more than $12 000 stamp duty from savings.

22. In June 2005 the husband vacated the former matrimonial home and commenced residing in the granny flat at the rear of his property at N.  He has been renovating the property.

The Applicable Law

1. The Court must be satisfied that in all the circumstances it is just and equitable to make an order. This is provided by s 79(2) of the Family Law Act 1975.

2. The Full Court of this Court in its decision in the case of Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 said as follows:

   “The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79.  That approach involves four inter-related steps.  Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.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.  Thirdly, the Court should identify and assess the relevant matters referred to ss.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.  Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case:  Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335 (and various other well known authorities).”

Property available for division

1. There was a large degree of common ground about the property including value of specific items of property and the liabilities.

2. But there were some areas of disagreement.  The husband asserted that there was a loan from his employer, the outstanding balance of which was $1520.  The wife did not concede this but I prefer the husband’s case in respect of this.

3. The wife asserted after both parties had closed their cases that the husband had owned household contents with a value of $10 000.  This came as a surprise to me because during a response to the opening of the wife’s case I was taken to an initial statement of assets and liabilities which included furniture in respect of which the husband had estimated its value at $10 000 and the wife had estimated its value at $5000.  I was informed that the parties agreed that the entry should be $7500 on the basis that such was the mid-point between those estimates.  In these circumstances, throughout the hearing until final address by leaned counsel for the wife I thought this matter had been resolved.  But I was informed at that time that the wife had been mistaken and thought the only furniture being considered was that furniture in the former matrimonial home and that she thought the husband had $10 000 of furniture in his own home.

4. It was submitted on behalf of the wife that I should regard the entry in the husband’s financial statement as an admission against interest to the effect that he owns household contents quite independently from the contents of the former matrimonial home with a value of $10 000.  I am afraid that the wife has failed to persuade me to any such finding.

5. It was submitted on behalf of the husband that money paid by the wife to her legal representatives on account of costs in these proceedings should be added back to the list of available property.  It was submitted that the sum which should be added back is $27 860.  Initially this submission was opposed by the wife.  But the wife accepted that if the Court’s general approach was to identify all the property of the parties as at the date of hearing, rather than the date of separation, then legal costs paid by the wife should be added back into the pool of available property.  Accordingly, I propose to add back legal costs paid by the wife.  But the wife’s evidence was to the effect that she had paid from her funds $18 860.75 and that her mother had paid $9000 on the wife’s behalf.  This is a total of approximately $27 860.  In these circumstances I propose to adopt the submission by learned counsel for the husband to add back $27 860 but also to include in the liabilities $9000 owing by the wife to her mother in respect of payment of this part of the legal costs.

6. There was also a submission on behalf of the wife to the effect that monies spent by the husband for the purpose of renovating his property at N in an amount of approximately $5000 be added back.  I do not propose to do this however for the reason that, in my view, this expenditure by the husband is reflected in the value of this property.

7. The property available for division between the parties consists of the following:-

$
1.        Former matrimonial home at L	600,000
2.        Husband’s property at N	390,000
3.        Husband’s Suzuki motor vehicle	5,000
4.        Husband’s MIL shares	78
5.        Wife’s Toyota motor vehicle	14,000
6.        Wife’s furniture	7,500
7.        Wife’s jewellery	2,000
8.        Wife’s A shares	3,683
9.        Wife’s legal costs paid (add back)	27,860
10.      M shares	21,560
_____________
$1,071,681

1. The liabilities are as follows:-

$
1.        Mortgage on L	102,797
2.        Mortgage on N	371,010
3.        Husband’s loan from his parents	10,000
4.        Husband’s loan for M shares	1,520
5.        Wife’s mother’s loan	3,000
6.        Wife’s mother’s loan for legal costs	9,000
__________
$497,327
Surplus	$574,354

1. The superannuation is as follows: -

$
1.        Husbands’ M superannuation plan	214,327
2.        Wife’s V superannuation	5,172
__________
$219,499
Total surplus property and superannuation	$793,853

1. I note that the husband has a financial resource in the UK in that he has superannuation with U with a current value of $38 800.

The advancement of funds by the wife’s mother

1. There was a major issue about how the Court should regard the payment in early 1998 by the wife’s mother of the $98 800 towards the purchase of the L land.

2. The details of alleged conversations between the wife’s mother and each of the parties around the time when the wife’s mother advanced these funds differ to some extent.  But it is clear that the wife’s mother wanted to assist the parties to purchase the land for the purpose of building a large new home thereon.  The husband said that he informed the wife’s mother that the parties could not afford the project and that the wife’s mother said words to the effect that they need not worry because she was going to give them $100 000.  He said that upon him suggesting that she should not do that the wife’s mother replied that she wanted to do this and that she was going to give it to them.

3. The evidence of the wife and her mother was slightly different.  Each of them asserted that the wife’s mother had provided the money for the purposes of the family including the children.  In my view this was an unsatisfactory slant on the relevant evidence.  It appeared to me to be the product of a meeting of their minds in an endeavour to present this part of the evidence in a manner perceived by them to best serve the wife’s case.  Apart from this I thought the evidence of the wife and her mother was truthful and reasonably balanced.

4. Accordingly, in relation to this issue I prefer the evidence of the husband.  I have the view that the money was advanced by the wife’s mother to both the husband and the wife with the clear intention of assisting them to purchase the land for the purpose of their project to acquire a new home.

5. Each counsel urged me to consider the effect of this advancement in a different manner.

6. It was submitted on behalf of the husband that the money was a gift to both the husband and the wife and as such, it should be regarded by the Court as a contribution by the wife’s mother on behalf of each of the husband and the wife.

7. On the other hand, it was submitted by the wife that it was a gift to the family rather than to the husband and the wife and, in any event, the Court should consider the money to have been a contribution by the wife’s mother on behalf of the wife.

8. Both learned counsel referred to the well-known authorities of Gosper and Gosper (1987) FLC 91-818 and Kessey and Kessey (1994) FLC 92-495. In Gosper Fogarty J. said as follows at pages 76,167 and 76,168:

   “Where there has been a gift or advance by a relative to one or both of the parties to the marriage the first step is to determine the ownership of that benefaction …  Confusion often arises at this point because, particularly with gifts of money or in kind, the evidence about it is confused and imprecise and the actual intention of the donor (the critical issue) may have been ill-defined.  However, where the evidence enables the Court to determine that it is a gift to one or other or both of the parties, that is an important finding. 

   …

   Normally where title to a property is transferred to one or both of the parties that would be the strongest indicator of the intention of the donor. 

   …

   The next step is to consider the application of sec. 79 to all of the property of the parties, including property received by one or both of them by way of benefaction from a third party.

   …

   Where a gift is made solely to the donor's relative (for example a gift by parents to their married daughter) and that spouse applies that property to the marriage, that is a direct financial contribution solely by that party and will be assessed in the ordinary way alongside other contributions by each party to the marriage.

   …

   The critical case is where a relative of one of the parties gifts property to both of the parties to that marriage.  Dependent upon the circumstances of the case it is, in my view, open to Court in such a case to look at the actuality and treat that as a ''financial contribution made directly ... on behalf of''  the spouse relative …

   In many such cases that gift was made only because of that relationship and in reality as a means of benefiting that relative in that marriage. It was made ''because she was a daughter of that family'' …

   It is clearly a ''financial contribution'' and one ''made directly'' to the acquisition, conservation and improvement of property.  In such cases it is open to the Court to conclude, if the facts justify it, that it was made ''on behalf of'' one spouse. 

   In other cases the evidence, including evidence that the donor intended to benefit both spouses, may not justify that conclusion.  If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.”.

9. In the present case, I am satisfied that the advancement was made to the husband and the wife.  Clearly it was for their joint purpose of acquiring the land to enable them to have their new home constructed.  This was not the sole project of the wife.  But I am unable to accept that the “actuality”, to use the expression of Fogarty J. in Gosper, was that this involved something other than a financial contribution made directly by the wife’s mother on behalf of the wife.  In my view, this gift was made only because of the relationship between mother and daughter as was submitted by learned counsel for the wife.  Clearly the wife’s mother had a fine regard for the husband at that time.  But in my view the evidence is not such that I am persuaded that this was a contribution also on his behalf.  In my view, to make such a finding would ignore the reality of these relationships.

10. I have a different view in relation to the $10 000 gift by the wife’s father to the husband and the wife shortly prior to his death.  I am satisfied that the wife’s father intended this for the benefit of both parties and to reflect his gratitude for what each of them had done for him.  In my view, this is quite a different situation from that involving the advancement of the $98 800.

Contributions

1. It was submitted that I should follow the approach enunciated by the Full Court of this Court in the case of Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and assess contributions in respect of two broad groups of assets, namely the non-superannuation property and the superannuation. I accept this.

Contributions to non-superannuation property

1. Both parties have made direct financial contributions.  I have referred to their property at the time of their marriage and to the history of acquisition of assets.

2. I note that the husband renovated the kitchen and bathroom at the parties’ home in the UK, built wardrobes and installed a new fence.  The wife assisted with painting and wallpapering.

3. At L, the husband laid the turf, built retaining walls and undertook paving and landscaping.  The wife made curtains for the four bedrooms. 

4. The husband has also renovated his N property. 

5. I note also that the parties lived with the wife’s parents for three months when they first moved to Australia.  They also lived with the wife’s mother for approximately 9 months when their L home was being constructed. The wife’s parents also largely funded a holiday to Australia by the parties early in the marriage.

6. The husband has had continuity of employment throughout the marriage.  He has been the major breadwinner for the family.  He continues to be employed by the same employer.  The wife worked in paid employment initially but ceased this just before the birth of the parties’ eldest child B.  The wife undertook some paid employment supervising school examinations between 1999 and 2002.  The wife also did some paid work assisting with elections.  Then, as indicated above, the wife commenced working in casual full-time employment as a receptionist / clerk in July 2004, a few months prior to the parties’ separation.

7. Both parties have made contributions to the welfare of their family constituted by themselves and the children.  But the major contribution in this regard has been made by the wife.  This is not to say that the husband has not made important contributions in this area because clearly he has.  But the parties arranged their responsibilities in this way.  This is that the husband would be the major breadwinner and the wife would be the primary homemaker and parent.  Each has been impressive in their respective roles.

8. Looking at their contributions overall, if it was not for one very significant matter one would have the clear view that the parties’ contributions have been approximately equal.  But in my view these have not been equal because of the view that I take about the advancement by the wife’s mother of the sum of $98 800 towards the purchase of the land at L.  This was a very significant contribution.

9. Learned counsel for the husband submitted that in the event that I did not accept the submission on behalf of the husband that I should not treat this as a contribution on behalf of the wife, I should be careful not to simply undertake some sort of mathematical exercise in arriving at an overall assessment of contributions.  I accept this submission for the reason stated by learned counsel namely, that the Court must be careful not to lose sight of all the other contributions when considering how to factor in this advancement.

10. In my view, the advancement has had the effect of causing an imbalance of contributions overall in favour of the wife.  In my view the contributions overall have been 60 percent by the wife and 40 percent by the husband. 

Contributions to the superannuation

1. As indicated above the husband’s interest in the M Superannuation Plan has a value of $214 327.  The wife’s interest in the V Superannuation has a value of $5172.  This is a total of $219 499.

2. There was a strong submission on behalf of the husband to the effect that the Court should find that the husband’s contributions to the superannuation have been greater than those of the wife.  It was submitted that this is because of two matters.  The first is the fact that the husband joined the fund on 16 July 1979 so that he had five years of eligible service in the Plan before the parties married.  The second is the fact that part of the value of the benefit is attributable to the period from separation to 19 April 2006, the date of valuation.  It is submitted on behalf of the husband that the value of the benefit has increased by more than 20 percent since separation.  It is submitted on behalf of the husband that there should be an assessment of the contributions to superannuation 20 percent in his favour.

3. In my view, such a finding would be most unfair to the wife.  Although the husband’s interest in the Plan increased by in excess of 20 percent after separation, the increase is in the value of an asset which is properly an asset of the parties the major part of which has been built up during their marriage.  Accordingly, it cannot be suggested properly that because the husband was the member, then the increase in value following the parties’ separation should be attributed solely to him.  To do this would be to ignore the fact that this is an asset of the marriage as distinct from something which is entirely the asset of the husband.

4. In my view, there is more substance in the other matter to which learned counsel for the husband refers.  This is the fact that the husband contributed approximately five years eligible service in respect of the Plan prior to the marriage of the parties.  It is not clear what the value of his interest in the Plan attributable to this period of service is.  But we know that it is in excess of $32 566 because this is the value of the husband’s pre-July 1983 component of his benefit as set out in the affidavit of the single expert Mr G.

5. I accept that there should be an assessment of contributions to superannuation in favour of the husband.  But in my view the suggestion of 5 percent in the husband’s favour by learned counsel for the wife is an adjustment which would properly reflect the parties’ contributions to these assets.  I do not consider it appropriate to apply a mathematical calculation to this.

6. The superannuation of both parties has a value of $219 499 as I have found.  The husband is to have 55 percent of this amount which is $120 724 and the wife is to have 45 percent of this amount which is $98 775.

s 75(2) matters

1. The husband is 44 years of age and he is in good health.  As indicated, the husband continues to work for the same firm which has employed him throughout the marriage and before.  His income is $2624 per week including car allowance and other benefits.  His personal expenditure is set out in his financial statement.  On present indications, the husband will be able to earn income at this rate for the foreseeable future.

2. On the other hand the wife is 43 years of age and she is also in good health.  As indicated, she is working as a receptionist / clerk.  Her income is $697 per week and she receives approximately $2 per week from dividends paid on her A shares.  Her personal expenditure is set out in her financial statement.  The wife has been out of the full time paid workforce until fairly recently.  As such, her present employment and income probably reflect what she is able to achieve, at least for the foreseeable future and in the absence of some further training or education.

3. The wife has the major care of the children and on present indications this is likely to continue.  The wife said that S would like to attend university.  If this was to occur then presumably the parties would continue to support her.  B will be undertaking third year at university this year.  In any event, the wife can be expected also to continue to have the major care of T for several years yet.

4. The husband is assessed to pay child support at the monthly rate of $2108.

5. The husband has a financial resource which should be payable to him upon reaching retirement.  As indicated above, this is a superannuation benefit with U with a current value of $38 800.  It is not anticipated that this benefit will be payable until the expiration of something like 20 years.

6. In my view, the most significant s 75(2) matters are the husband’s considerably stronger income earning capacity compared with that of the wife and the fact that the wife will almost certainly have the major responsibility for caring for the children for quite some years yet.  The other matters referred to above are also relevant as is the fact that on a contributions basis the wife will receive a greater portion of the available property than the husband.

7. In all the circumstances, in my view, there should be a set-off of 10 percent of the non superannuation property in favour of the wife to take account of the relevant s 75(2) matters.

The fourth step

1. On the above basis the wife would be entitled to receive the following:

$
1.        non-superannuation	402,048
2.        superannuation	98,775
_____________
$500,823

1. The wife has the following non-superannuation property:

$
1.        Toyota motor vehicle	14,000
2.        Furniture	7,500
3.        Jewellery	2,000
4.        A shares	3,683
5.        Legal costs paid (add back)	27,860
6.        One half of M shares	10,780
_________
$65,823

1. But the wife also has the following liabilities:

$
1.        Mother’s loan	3,000
2.        Mother’s loan for legal costs	9,000
_________
$12,000

1. Accordingly, the wife has non-superannuation property with a net value of $53 823 ($65 823 - $12 000 = $53 823).

2. But she is to have 70 percent of this property which is property with a value of $402 048.  To achieve $402 048 the wife requires further property worth $348 225 ($402 048 - $53 823 = $348 225).  The additional property can only come from the equity in the former matrimonial home.  This is $497 203 ($600 000 - $102 797 = $497 203).

3. If this was adjusted from the equity this would leave $148 978 ($497 203 - $348 225 = $148 978).  If it was not for the superannuation, this is what the wife would have to pay the husband for his interest in the home.

4. How should the Court deal with the superannuation?

5. The wife wishes to be able to retain the home for accommodation of herself and the children.  This is one of the reasons for the wife seeking a superannuation split of 25 percent of the husband’s benefit.  The wife’s prospects of being able to retain the home will be enhanced if she can achieve in effect part of her superannuation contribution in the form of the non-superannuation property.

6. On the other hand, the husband is also desirous of being in receipt of as much of the non-superannuation property as possible rather than having to retain as superannuation a high proportion of his superannuation benefit.  This is why he asks the Court to split his superannuation benefit equally between the parties.

7. As I have said, the parties’ contributions to their superannuation overall have been assessed as 55 percent by the husband and 45 percent by the wife.  The relevant amounts are $120 724 and $98 775 respectively.

8. In support of the husband’s application in this regard, learned counsel for the husband drew my attention to the decision of Moore J. in the case of Levick and Levick (2006) FLC 93-254. In that case her Honour in effect split the husband’s superannuation benefit 20 percent in favour of the wife. But her Honour also allocated approximately 23 percent of the husband’s superannuation benefit to the wife by way of non-superannuation property. In effect a negative adjustment of approximately 6 percent of the superannuation based on contributions was made against the wife to take account of the facts that the husband would have to wait many years to receive his superannuation and that he would also be liable to pay tax thereon.

9. In my view, the facts of the present case are quite different from that case.  In any event, the Government recently announced significant changes to the tax treatment of superannuation.  These included the intention to permit superannuation in taxed funds to be taken free of tax if taken after the age of 60 years, apart from the 15 percent tax payable on depositing the funds to the relevant superannuation fund.

10. I note that the Explanatory Memorandum which accompanied the Bill for the superannuation amendments which enabled courts to make superannuation splitting orders pointed out (at pages 9 and 10) that the treatment of superannuation on marriage breakdown should be consistent with the broader goals of retirement incomes policy.  The Explanatory Memorandum went on to point out that such goals included:

11. ensuring that superannuation savings, which have benefited from concessional tax treatment, are used to maintain and improve living standards in retirement rather than being diverted to other uses and

    -effectively targeting Government assistance, in the form of age pensions and other benefits to those who have limited resources with which to fund their retirement.

12. Making an order splitting a significant component of the husband’s superannuation benefit would be consistent with those expressed goals in my view.

13. If I was to make a splitting order like that sought by the husband this would make it difficult for the wife to be able to retain the former matrimonial home.

14. On the other hand, if I was to make a splitting order similar to that sought by the wife this would make it easier for her to retain the home. 

15. The wife is to have 45 percent of the superannuation ($219 499) which is $98 775.  If the husband’s superannuation ($214 327) was split 25 percent to the wife this would be $53 582.  The wife also has her Clearview superannuation ($5172) so on this basis she would have superannuation with a value of $58 754 ($53 582 + $5172 = $58 754).  To achieve $98 775 the wife would require an additional $40 021 ($98 775 - $58 754 = $40 021).  This could be paid or adjusted from the equity in the home.

16. This would reduce the $148 978 which, if it were not for the superannuation, the wife would have to pay the husband.  What the wife would have to pay the husband after taking account of superannuation would be $108 957 ($148 978 - $40 021 = $108 957).

17. But she would also have to assume responsibility for the outstanding mortgage balance of $102 797.  This would be a total of $211 754.

18. It is difficult to see how the wife could do this although it was suggested that her mother might be able to assist to some extent.

19. On the other hand, would such an outcome be fair to the husband?  On this basis the husband would have the following:

$
1.        Property at 38 Newhaven Avenue, Blacktown	390,000
2.        Suzuki motor vehicle	5,000
3.        MIL shares	78
4.        One half of Marsh shares	10,780
5.        Payment from wife	108,957
$514,815

1. But he would also have the following liabilities:

$
1.        Mortgage on Blacktown	371,010
2.        Loan from parents	10,000
3.        Loan for Marsh shares	1,520
__________
$382,530

1. Accordingly, his net non-superannuation property would be $132 285.  In addition, the husband would retain $160 745 in his superannuation fund.  This would be property and superannuation with a total value of $293 030.

2. Is this a just and equitable outcome?  I have taken account of the fact that the wife will not have to wait to receive the balance of the superannuation as assessed on contributions by the set-off of 10 percent of non-superannuation property which I regard as being at the low end of the range.  Whereas the husband will have to wait many years to receive the significant funds in his superannuation.  I have also kept in mind the husband’s financial resource in the Norwich Union superannuation.

3. The husband has been able to purchase another home.  He would be able to reduce his mortgage significantly from the funds paid to him by the wife or purchase another property.  He would have sufficient funds to be able to service the mortgage.  Significantly the husband has his capacity for earning income which is much stronger than that of the wife.

I certify that the preceding ninety-five (95) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar Johnston.

Associate:  _______________________

Date:              24 January 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as Henty & Henty