HILLMAN & CARSON
[2018] FamCA 477
•26 June 2018
FAMILY COURT OF AUSTRALIA
| HILLMAN & CARSON | [2018] FamCA 477 |
| FAMILY LAW – PROPERTY SETTLEMENT – Where parties were in a de facto relationship for 13 years and have two children – Where parties seek adjustment under s90SM Family Law Act 1975 (Cth) – Where it is just and equitable to make an order – Where contributions are assessed as largely equal – Where the respondent will provide the primary care of the children – Where the applicant is granted a 30 per cent interest in the respondent’s pension – Where the respondent did not press an application for spousal maintenance but such application was considered and dismissed. FAMILY LAW – COSTS – Where orders have previously been made requiring each party to pay costs and no further order in relation to costs is necessary. |
| Family Law Act 1975 (Cth) Family Law (Superannuation) Regulations 2001 (Cth) Superannuation (State Public Sector) Deed 1990 (Qld) |
| Coghlan & Coghlan (2005) FLC 93-220 Gao & Wang (2016) FLC 93-735 Norbis & Norbis (1986) 161 CLR 513 Stanfordv Stanford (2012) 247 CLR 108 Stein v Stein (2000) FLC 93-004 Zaruba v Zaruba (2017) FLC 93-776 |
| APPLICANT: | Mr Hillman |
| RESPONDENT: | Ms Carson |
| FILE NUMBER: | BRC | 7935 | of | 2017 |
| DATE DELIVERED: | 26 June 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 18 - 19 April 2018 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Simpson Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr G. Page QC |
| SOLICITOR FOR THE RESPONDENT: | Michael Dwyer Solicitor |
Orders
The applicant retain free from any and all claims from the respondent, the property situated at Q Street, Suburb L, Queensland provided that he shall indemnify the respondent from any liabilities in respect of the said property.
The respondent retain free from any and all claims from the applicant the land situated at S Street, T Town, Queensland provided that she indemnify the applicant from any liabilities in respect of the said property.
The respondent retain free from any and all claims from the applicant the land situated at J Street, Suburb A, Queensland (“the Suburb A property”) provided that:
(a) she indemnify the applicant from any liabilities in respect of the said property; and
(b) in the event the mortgage encumbrance attaching to the property is in the name of the applicant, obtain a release from the mortgagee confirming he has no obligation or otherwise refinance the debt within 45 days of this Order.
In the event the respondent is required to and does not refinance the debt on the Suburb A property within 45 days of this Order (for whatever reason), the said property be sold forthwith on such terms and conditions as may be agreed and upon the sale, the proceeds be applied and in priority as follows:
(a) To pay the mortgagee what is owed;
(b) To pay the agent any costs of sale; and
(c) The balance proceeds be retained by the respondent.
In accordance with s 90MT(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) whenever a splittable payment within the meaning of s 90ME of the Act becomes payable in respect of the interest of Ms Carson in U Super (U Super):
(a) Mr Hillman is entitled to be paid by the U Super Board (“the trustee”) 30 per cent of the splittable payment; and
(b) There be a corresponding reduction in the entitlement Ms Carson would have had in U Super but for this Order.
The trustee do all such acts and things and sign all such documents as may be necessary to:
(a) Calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 (Cth) the entitlement awarded to the applicant in the preceding paragraph of this Order; and
(b) Pay the entitlement whenever the trustee makes a splittable payment from the respondent’s interest in U Super.
Paragraph 5 of this Order has effect from the operative time and the operative time is 26 June 2018.
Save for as otherwise provided in this Order;
(a) The parties shall retain all assets in their name or in their possession at the time of this Order free from any and all claims of the other party;
(b) The parties shall bear responsibility and indemnify the other for and in respect of any debt in their name or attached to any asset which they are to retain pursuant to this Order; and
(c) The parties do all acts and things as are necessary to give effect to this Order, including signing any documents or deeds and in the event a party fails to do so within seven days of a written request to do so then a Registrar of this Court is hereby empowered pursuant to s 106A of the Act to sign such documents in lieu of the defaulting party.
The respondent’s application for final spousal maintenance be dismissed.
Any extant application be dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hillman & Carson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 7935 of 2017
| Mr Hillman |
Applicant
And
| Ms Carson |
Respondent
REASONS FOR JUDGMENT
Mr Hillman and Ms Carson lived in a de facto relationship from July 2004 until April 2017. They have two children, F aged nine and G aged seven.
On the first day of what was to be a three day trial Mr Hillman and Ms Carson resolved issues about their children and an Order was made by consent. Unfortunately, they were not able to resolve their dispute about financial matters.
issues
By the end of the trial it became apparent that the area of dispute was limited to the following:
a)Mr Hillman proposed that the net assets of the parties as set out in the agreed balance sheet[1] (excluding any ‘add backs’) be divided (other than the pension) in the proportions 53 per cent to Ms Carson and 47 per cent to himself;
b)Ms Carson proposed that the net assets of the parties (including the ‘add backs’ referred to in exhibit 3 as legal fees) be divided (other than the pension) in the proportions 55 per cent to herself and 45 per cent to Mr Hillman;
c)Mr Hillman proposed that the pension be split equally;
d)Ms Carson proposed that there be no splitting order.
[1] Exhibit 3.
Ms Carson’s application for spouse maintenance was not pressed.
Relevant legal principles
Section 90SM (1) of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides that:
In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate … altering the interests of parties to the de facto relationship in the property.
Section 90SM (3) relevantly provides that:
The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 90SM (4) prescribes matters that must be taken into account in considering what if any order is made under the section.
The High Court in Stanford v Stanford[2] dealt with a property settlement application involving a married couple but the propositions discussed by the High Court apply with equal measure to a de facto couple.[3]
[2] (2012) 247 CLR 108.
[3] Gao & Wang (2016) FLC 93-735 [19] as to the applicability of the Stanford principles to de facto relationships.
Those propositions are that in considering whether it is just and equitable to make an order it is firstly necessary to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. Secondly, the discretion of whether or not to make a property settlement order, although extraordinarily wide, must nevertheless be exercised in a principled way. Thirdly, there is no presumption that the parties’ rights to or interests in property are or should be different from those that currently exist. The consideration of whether it is just and equitable to make an order should not be considered by reference only to the matters in s 90SM (4). It is necessary to give separate consideration to s 90SM (3) and (4) and not to ‘conflate’ the two subsections.
Section 90MC provides that a superannuation interest is to be treated as property and this enables the Court to make an order that splits a party’s superannuation.
Is it just and equitable to make an order?
The property owned by the parties jointly or by each of them is agreed[4] and set out in the table below.
[4] As set out in exhibit 3 noting that the agreed values appear under the headings ‘wife retain’ and ‘husband retain’.
Asset
Value
Jointly owned
Suburb A home
850,000.00
Suburb A mortgage
(590,000.00)
Net
$260,000.00
Asset
Value
Asset
Value
Owned by Mr Hillman
Owned by Ms Carson
Suburb L home
1,050,000.00
V Bank account
3,900.00
XPL Business
0.00
W Bank account
200.00
Motor Vehicle 1
47,500.00
Furniture and household goods
15,000.00
Truck
20,000.00
T Town land
15,000.00
Jet ski
1,500.00
Motor Vehicle 2
22,000.00
Quad bike
3,000.00
V bank term deposit
20,000.00
Mower
2,000.00
Proceeds of sale of horse float
6,000.00
Jewellery
2,000.00
Furniture and household goods
15,000.00
CBA account
4,018.00
Bank account Y ATF Hillman Investments
204.00
Bank account X Pty Ltd (XPL)
6.00
Proceeds of sale of 4WD
1,800.00
Total owned by Mr Hillman
$1,147,028
Total owned by Ms Carson
$82,100.00
Liabilities in Mr Hillman’s name
Ms Carson’s Liabilities
Suburb L mortgage
(720,000.00)
Car finance – Motor vehicle 2 (PK)
(22,000.00)
Credit card ANZ
(14,000.00)
Rates T Town (PK)
(4,000,00)
Car finance – Motor vehicle 1`
(73,000.00)
Rates debt Suburb L
(8,000.00)
ATO tax debt
(14,000.00)
Total liabilities
$(829,000.00)
Total liabilities
$(26,000.00)
Mr Hillman’s net assets
$318,028.00
Ms Carson’s net assets
$56,100.00
Total combined net assets
$634,128.00
Ms Carson’s superannuation
Intrust Super-Accumulation interest
$19,000.00
U Super (in the payment phase)
$1,985,920.00
The only argument about the ‘asset pool’ is from Ms Carson who argues that there should be a notional ‘add back’ of legal fees paid by each party. Mr Hillman has paid $63,805 in legal fees and Ms Carson has paid $21,288. The only evidence about the source of funds to pay legal fees is that each party borrowed the entirety from family. In such circumstances I do not propose to notionally include any legal fees in the asset pool.
In most cases, determining whether or not it is just and equitable to make an order is ‘readily satisfied’ by the fact that the marriage or de facto relationship has come to an end and the common use of property can no longer occur. Additionally, the assumptions the parties’ had during the marriage or relationship about the use and/or division of the property has ceased by reason of the ending of the marriage or relationship.[5]
[5] Stanford v Stanford supra
Mr Hillman and Ms Carson’s de facto relationship has ended and the common use of property has now ceased. The pension received by Ms Carson was relied upon by the parties to pay expenses relating to the family. That common use or expectation ceased upon the relationship ending.
In this case, the parties agree that a property settlement order ought be made in relation to the assets listed in the above table (other than Ms Carson’s pension).
In all of the circumstances I am satisfied that it is just and equitable to make an order.
Global approach or asset by asset approach[6]
[6]Norbis & Norbis (1986) 161 CLR 513.
Ms Carson argues that her pension should be assessed separately from the other assets because only she made contributions to it and her entitlement to receive it arose as a result of her having already been in employment for a significant period before cohabitation commenced. It is on that basis that Ms Carson argues there should be no splitting order. Mr Hillman argues that he made indirect contributions to the superannuation by supporting Ms Carson’s career and by the family forgoing some of her income during the relationship which was used to make contributions to the superannuation. In addition, the entitlement to receive the pension arose well into the relationship and after each party had made contributions to the welfare of the family. Ms Carson’s reliance on the authority of Zaruba& Zaruba[7] was distinguishable on its facts. In that case the property in question was purchased after the parties had commenced living separate financial lives and the husband made no contributions to the property.
[7]Zaruba & Zaruba (2017) FLC 93-776.
While the Full Court in Coghlan & Coghlan[8] said that the preferred approach is to consider relevant factors about property and superannuation separately there is no requirement to do so. It is nevertheless necessary to consider the ‘real nature’ of the superannuation i.e. while it has a capitalised value, it will never be paid in that form.[9]
[8]Coghlan & Coghlan (2005) FLC 93-220.
[9] Ibid [68].
In this case, I will consider contributions to all property including superannuation collectively but I will give separate consideration to the pension when considering what order is just and equitable in the particular circumstances of this case.
application of legal principles
Contributions
Ultimately there was little factual dispute between the parties in relation to contributions to the acquisition, conservation or improvement of property (other than the superannuation) and to contributions made to the welfare of the family.
When the parties commenced cohabitation Mr Hillman was working in the building industry and Ms Carson was a public servant.
Ms Carson was first started as a public servant in February 2001 and her contract was renewed in February 2004 shortly before cohabitation commenced. Her entitlement to receive a pension for life was dependent upon her being a employed minimum of eight years and further conditional upon her ceasing to be an employee. If she remained an employee for eleven years or more there was no condition on entitlement other than ceasing to be an employee.[10] Ms Carson was ultimately retrenched in early 2012 after eleven years and eight years into the relationship.
[10]Superannuation (State Public Sector) Deed 1990 (Qld) s 340.
Initially, in 2004, the parties lived in a rented unit but after about six months they moved into a home owned by Ms Carson at Suburb Z. Mr Hillman carried out renovations to that property. He built fencing and timber decks around the pool, installed an electric gate and new front entry door, laid new carpets, painted inside and out and landscaped the property.
In September 2005 Mr Hillman bought a property at Suburb L for $644,500 (included in the table above) using $628,000 he had received from the sale of another property he owned prior to commencement of cohabitation.
The parties’ two children were born in 2008 and 2010 respectively.
After the children were born Ms Carson’s Suburb Z property was sold and the $270,000 received from the sale was used to reduce the mortgage on the then recently purchased Suburb A property (also included in the table above).
Mr Hillman personally carried out extensive renovations to the Suburb L property and the Suburb A property using funds from a joint loan facility. The parties moved into the Suburb A property and it became their matrimonial home.
While Ms Carson was still a public servant Mr Hillman employed a full time nanny to assist with the care of the children for the years 2008 to 2010. Ms Carson was required to be absent from the home for days at a time and even when not absent from home she had commitments which required her attention. Mr Hillman cared for the children when the nanny was not available. From 2010 to March 2012 Ms Carson and Mr Hillman shared the care of the children.
Mr Hillman was very supportive of Ms Carson’s career and provided practical assistance particularly.
Upon her retrenchment in 2012, Ms Carson became a full time parent while Mr Hillman continued the operation of his construction business.
Mr Hillman paid the mortgage repayments for the Suburb L and Suburb A properties throughout the relationship from income generated by his business.
In 2013 the parties and children moved from Suburb A to Suburb L.
During the relationship Ms Carson’s income significantly exceeded Mr Hillman’s as shown in the table below:
Financial year Mr Hillman’s taxable income Ms Carson’s taxable income Ending 30 June 2004 E$56,399 E$150,000 Ending 30 June 2005 E$30,393 E$150,000 Ending 30 June 2006 E$98,170 E$150,000 Ending 30 June 2007 E$69,426 E$150,000 Ending 30 June 2008 E$68,821 E$150,000 Ending 30 June 2009 E$71,490 E$150,000 Ending 30 June 2010 E$74,028 E$150,000 Ending 30 June 2011 E$51,071 E$150,000 Ending 30 June 2012 E$37,385 E$150,000 Ending 30 June 2013 E$40,118 E$98,102 Ending 30 June 2014 E$30,578 E$98,102 Ending 30 June 2015 E$38,512 E$98,102 Ending 30 June 2016 E$46,795 E$98,102 Ending 30 June 2017 E$47,501 E$98,102
However, up to 2012 Ms Carson spent $30,000 per annum of her salary on expenses and further sums at other times. She also made contributions from her income to her superannuation.
Ms Carson’s income continued to exceed Mr Hillman’s even after her retrenchment because she was then entitled to a pension.
Mr Hillman ceased the operation of his business when he lost a significant contract in about 2014. He then worked for a couple of companies.
Since separation in 2017 the children have lived primarily with Ms Carson although they have spent time with Mr Hillman. Mr Hillman continued to live in the former matrimonial home at Suburb L while Ms Carson and the children rented a property to which Mr Hillman made a contribution of $200 per week. Mr Hillman paid a modest sum by way of child support.
Conclusion in relation to contributions
Mr Hillman’s initial contributions greatly exceeded Ms Carson’s. He had equity of $680,000 in a home which he contributed early in the relationship. Ms Carson had equity of $270,000 in a home which she contributed much later and after Mr Hillman had carried out renovations to her home. Additionally Mr Hillman personally carried out extensive renovations to their other properties. On the other hand Ms Carson’s income exceeded Mr Hillman’s throughout the relationship, at times significantly. Each party made other contributions including to the welfare of the family.
Ms Carson’s entitlement to her superannuation crystallised upon her retrenchment in 2012. At that time she and Mr Hillman had been in a relationship for eight years. Ms Carson made contributions from her income to her superannuation. The use of income earned during the relationship can be seen as an indirect contribution by Mr Hillman as it was money foregone to the relationship. Mr Hillman was very supportive of Ms Carson’s career.
Having considered all of the above matters I assess contributions to be largely equal.
Other factors required to be considered[11]
[11] See ss 90SF(3) of the Act.
Mr Hillman is forty-four years of age and about to start a new job in his father’s business where he will be paid a salary of $60,000. He also plans to rebuild his own business.
Ms Carson is forty-five years of age and currently engaged full time in caring for the couple’s two children. The children spend each alternate weekend from Friday to Monday with Mr Hillman and in addition a number of hours after school each alternate Wednesday. School holidays are shared equally.
The current child support assessment is a very modest $249 per month. There is a child support debt (disputed by Mr Hillman) of $5,209. The parties are currently involved in a process with the Child Support Agency relating to this dispute.
Ms Carson holds an Arts degree and further qualifications but she has not been employed since March 2012.
Ms Carson has the primary care of the children and would prefer to remain a full time parent for the foreseeable future even though the children are now at school. Ms Carson contends that the separation has hit the children particularly hard and she wishes to provide as much support as possible for them. It is not apparent on the evidence how Ms Carson’s wish to maintain her role as a parent would be impeded by working in the areas for which she has qualifications and particularly during school hours.
Conclusion upon consideration of other factors
The factors which favour Ms Carson being awarded significantly more that Mr Hillman include her primary care of the children, the history of minimal child support, her capacity for full time employment being impeded by her primary care of the children and her wish to maintain her role as a parent.
What order is appropriate?
The parties agree that they will each retain certain assets as set out in the table below. Mr Hillman’s net assets represent 48.69 percent of the net total and Ms Carson’s net assets represent 51.31 percent of the net total.
Mr Hillman
Net value
Ms Carson
Net value
Suburb L home
$322,000
Suburb A home
$260,000
Motor vehicle 1
$0
V Bank account
$3,900
Truck
$20,000
W Bank account
$200
Jet ski
$1,500
Furniture and household goods
$15,000
Quad bike
$3,000
T Town land
$11,000
Mower
$2,000
Motor vehicle 2
$0
Jewellery
$2,000
V Bank term deposit
$20,000
Furniture and household goods
$15,000
Proceeds of sale of horse float
$6,000
CBA account
$4,018
Intrust Superannuation
$19,000
XPL Business
$0
Bank account Y ATF Hillman Investments
$204
Bank account X Pty Ltd
$6
Proceeds of sale of 4 WD
$1,800
Total assets
$371,528
Total assets
$335,100
Additional Liabilities
Motor vehicle 1
(25,500)
ANZ Credit Card
(14,000)
ATO debt
(14,000)
Total liabilities
($53,500.00)
Total net assets
$318,028
Total net assets
$335,100
Percentage of total net assets
48.69 per cent
Percentage of total net assets
51.31 per cent
As noted above I consider that a significant adjustment should be made in Ms Carson’s favour but if I were to order Mr Hillman to pay a cash component to Ms Carson it may necessitate him selling his home given his existing mortgage and lack of cash assets. Selling his home would likely result in at least some delay in Ms Carson receiving a payment and I am conscious of the requirement created by s90ST of the Act to, as far as practicable, “finally determine the financial relationship between the parties … and avoid further proceedings between them.” Importantly, the sale of Mr Hillman’s home would have an impact on the children who spend each alternate weekend with him. I am disinclined to make such an order if there is an alternative means of achieving a just and equitable result.
That brings me to the pension received by Ms Carson. As noted above, superannuation is to be treated as property, and Mr Hillman has sought a splitting order that he receive one half of the y pension. The weekly pension is $1,888. As I have determined that contributions should be assessed as largely equal but that Ms Carson should receive more than Mr Hillman overall for the reasons identified, such an outcome can be achieved by Ms Carson retaining a much greater proportion of the pension and each party retaining their other property as identified in the above table.
If Mr Hillman receives 30 percent of the pension he would be entitled to receive about $566 per week and Ms Carson would retain the balance of about $1,322 per week. Ms Carson has an earning capacity although limited by reason of her primary care of the children. Her particular qualifications are likely to suit part time work.
A 70/30 split of the pension in Ms Carson’s favour appropriately recognises the need for a significant adjustment in her favour while acknowledging the contributions made by each party during the relationship and achieves a just and equitable result overall.
Spousal maintenance
The payment of spousal maintenance was not pressed by Ms Carson, it being conceded that she was unable to establish an inability to support herself adequately. If that concession was made solely on the basis of a continuation of her full pension then I consider it necessary to consider the application for spousal maintenance given my determination to split the pension.
Ms Carson’s weekly expenses are $978 not including income tax. Her personal weekly expenses are $437. Ms Carson’s claimed expenses relating to the children cannot be considered when determining a claim for spouse maintenance.[12] Doing the best I can, I expect income tax on her share of the pension to be about $237.[13] Her total weekly expenses are therefore about $1,652 and her adjusted pension is about $1,322. The shortfall of $330 per week can, in my view, be met from part time employment in one of the three areas in which Ms Carson has qualifications. Despite being out of the workforce since 2012, Ms Carson’s qualifications are likely to enable her to gain employment should she wish to do so, in order to supplement the income she will continue to receive by way of her pension.
[12] Stein v Stein (2000) FLC 93-004.
[13]Using the same percentage claimed by her in her Financial Statement.
I therefore dismiss the application for spousal maintenance.
Costs orders
There are existing orders for costs against each party. By an Order of 11 October 2017 Ms Carson was ordered to pay $966.96 from her entitlement on property settlement within 28 days of the date of the final Order. By Order dated 1 December 2017 Mr Hillman was ordered to pay Ms Carson’s costs of and incidental to his Application in a Case filed 10 November 2017 on a party and party basis, from his entitlement on property settlement. There is no current agreement on the costs Mr Hillman is to pay Ms Carson but it would seem sensible for there to be a set off. That is of course a matter for the parties to agree about but as there are existing Orders it is not necessary for me to make any further order.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 26 June 2018.
Associate:
Date: 26 June 2018
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